LICENSE AND RESEARCH AGREEMENT

 

LICENSE AND RESEARCH AGREEMENT

 

This License and Research Agreement (this “Agreement”) is made by AMR Technology, Inc., a corporation organized and existing under the laws of Vermont and having a principle place of business at 5429 Main Street, Manchester, Vermont, Albany Molecular Research, Inc., a corporation organized and existing under the laws of the State of Delaware and having a principle place of business at 21 Corporate Circle, Albany, New York 12203 (with “ AMRI ” meaning individually and collectively AMR Technology, Inc. and Albany Molecular Research, Inc.) and Bristol-Myers Squibb Company, a corporation organized and existing under the laws of the State of Delaware and headquartered at 345 Park Avenue, New York, New York 10154 USA (“ BMS ”).

 

Recitals

 

A. Bristol-Myers Squibb Pharma Company (an Affiliate (as defined below) of BMS and formerly called “DuPont Pharmaceuticals Company”) assigned certain patent applications and patents to Albany Molecular Research, Inc. (the “Assigned Patent Rights”) under the Existing License Agreement (as defined below);

 

B. Under the Existing License Agreement, Albany Molecular Research, Inc. retained the rights under the Assigned Patent Rights in the CNS Field (as that term is defined in the Existing License Agreement) and granted BMS an exclusive license under the Assigned Patent Rights so that BMS could make, have made, import, use, offer to sell and sell compounds covered by the Assigned Patent Rights and products containing those compounds in the Non-CNS Field (as that term is defined in the Existing License Agreement).

 

C. Under the Existing License Agreement, Bristol-Myers Squibb Pharma Company licensed certain then unpatented compounds (the “Attachment A Compounds”) to Albany Molecular Research, Inc. in

 

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the CNS Field and retained all rights in the Non-CNS Field (as that term is defined in the Existing License Agreement);

 

D. Albany Molecular Research, Inc. and BMS entered into the Warrant Issue Agreement (as defined below) on the same date as they entered into the Existing License Agreement;

 

E. Albany Molecular Research, Inc. issued warrants to BMS under the Warrant Issue Agreement and, on September 11, 2003, BMS and Albany Molecular Research, Inc. entered into an amendment to amend the Warrant Issue Agreement so that the period for BMS to exercise the warrants under the Warrant Issue Agreement was extended, and they entered into the First Amendment (as defined below)  in which the Existing License Agreement was amended to be consistent with the amendment to the Warrant Issue Agreement;

 

F. BMS is willing to have the warrants cancelled as part of this Agreement;

 

G. On January 7, 2004, BMS, Bristol-Myers Squibb Pharma Company and Albany Molecular Research, Inc. entered into the Second Amendment (as defined below) under which the Existing License Agreement was amended so that Albany Molecular Research, Inc. was given the right to file patent applications and to obtain patents on the Attachment A Compounds as well as on certain other compounds, including but not limited to derivatives of the Attachment A Compounds and derivatives of compounds claimed in the Assigned Patent Rights;

 

H. Albany Molecular Research, Inc. has generated Amine Neurotransmitter Reuptake-Inhibitors (as defined below) after it entered into the Existing License Agreement, some of which are analogs and derivatives of the compounds covered by the Assigned Patent Rights or of the Attachment A Compounds, and Albany Molecular Research, Inc. has filed patent applications on some of these Amine Neurotransmitter Reuptake-Inhibitors it has generated;

 

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I. Albany Molecular Research, Inc. would like to obtain ownership rights in all Attachment A Compounds, to have Bristol-Myers Squibb Pharma Company assign to AMR Technology, Inc. its entire right, title and interest in and to those Attachment A Patent Rights (as defined in the Existing License Agreement) in which Bristol-Myers Squibb Pharma Company has any ownership interest, and to terminate certain other intellectual property rights which it conveyed to BMS in the Existing License Agreement, while BMS would like to obtain an exclusive license from AMRI under those rights and the Assigned Patent Rights and the Attachment A Patent Rights to Develop (as defined below) and Commercialize (as defined below) in the Field (as defined below) Licensed Compounds (as defined below) and Licensed Products (as defined below);

 

J. BMS, Bristol-Myers Squibb Pharma Company and Albany Molecular Research, Inc. will enter into an agreement to terminate the Existing License Agreement (the “License Termination Agreement”) on the same date as BMS, AMRI Technology, Inc. and Albany Molecular Research, Inc. enter into this Agreement. In the License Termination Agreement, Bristol-Myers Squibb Pharma Company will assign to Albany Molecular Research, Inc. its entire right, title and interest in and to the Attachment A Compounds and will agree to assign to AMR Technology, Inc. its entire right, title and interest in and to the BMS Attachment A Patent Rights (as defined in the Existing License Agreement). As part of the upfront payment under this Agreement, BMS and Albany Molecular Research, Inc. will cancel all existing warrants issued by Albany Molecular Research, Inc. under the Warrant Issue Agreement by entering into an agreement to terminate the Warrant Issue Agreement (the “Warrant Termination Agreement”) on the same date as they enter into this

Agreement.   This Agreement, the License Termination Agreement and the Warrant Termination Agreement will not be effective unless all of them are entered into on the same date.

 

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K. The Parties would like to undertake a Research Program (as defined below) for the research, discovery and identification of Amine Neurotransmitter Reuptake-Inhibitors for BMS to Develop and Commercialize;

 

L. AMRI and BMS desire to manage such Research Program through a Joint Research Committee (as defined below); and

 

M. This Agreement sets forth the particular terms and conditions governing the Research Program to be undertaken by AMRI and BMS concerning Amine Neurotransmitter Reuptake-Inhibitors and the Development (as defined below) and Commercialization (as defined below) of Licensed Compounds and Licensed Products by BMS under this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

 

1.                           DEFINITIONS.

 

1.1                                  Definitions . Capitalized terms used, shall have the meaning ascribed to them in this Agreement. Words defined importing the singular also include the plural and vice versa, unless the text requires otherwise. As used in this Agreement, the following terms have the following meanings:

 

“ Acceptance ” or “ Accepted ”, as it applies to a Drug Approval Application, means that the filing has been accepted by the applicable Regulatory Authority for consideration of the filing on its merits.

 

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“Action” means individually or collectively (a) any lawsuit(s) or request(s) for preliminary discovery initiated by BMS or AMRI or a Third Party on behalf of AMRI or BMS under Section 3.2(h) in the United States or in a foreign country or jurisdiction against a Third Party or Third Parties for infringement of AMRI Patent Rights, AMRI Third Party Rights, BMS Licensed Patent Rights or BMS Third Party Rights and/or (b) any counterclaim(s) or lawsuit(s) instituted by a Third Party against BMS or AMRI or a Third Party that initiates a lawsuit on behalf of BMS or AMRI in the United States or in a foreign country or jurisdiction, in relation to AMRI Patent Rights, AMRI Third Party Rights, BMS Licensed Patent Rights or BMS Third Party Rights.

 

“Advanced Lead Candidate Compound” means a compound identified in Exhibit 1.1C , which shall be a written list agreed upon and signed by the Parties within thirty (30) days of the Effective Date identifying up to ten (10) compounds that are AMRI Compounds as of the Effective Date. Such list shall be attached to this Agreement and be part of this Agreement.

 

“ Affiliate ” means any company or organization that, either directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a Party. For the purpose of this Agreement “control” means the power to, directly or indirectly, appoint a majority of the managing directors, or otherwise direct or cause the direction of the management or policies of such person, whether through share ownership of at least fifty per cent (50%) of the stock entitled to vote for the election of directors or, in case of non-stock company, by contract or otherwise.

 

“ Agreement ” means this Agreement and all Exhibits attached hereto and incorporated herein by reference, as the same may be amended or supplemented from time to time hereafter.

 

“Amine Neurotransmitter Reuptake-Inhibitor” and/or “Amine Neurotransmitter Reuptake-Inhibitor Compound” means a compound that exhibits an inhibitory equilibrium binding

 

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constant (K i ) of less than one (1) micromolar in a competition binding assay for at least two of the three biogenic amine transporters (norepinephrine, dopamine and serotonin).

 

“AMRI Compounds ” means (i) the Attachment A Compounds,

 

(ii) the Amine Neurotransmitter Reuptake-Inhibitor Compounds that are listed in Part II of Exhibit 1.1E ,

 

(iii) all compounds first synthesized pursuant to the Research Program and owned solely or jointly by AMRI or any of its Affiliates (including but not limited to any such compound that is jointly owned by AMRI and BMS),

 

(iv) all compounds Covered at the time of filing and/or at the time of grant by a compound claim of Patent Rights that are filed on any of the compounds included in items (i)-(iii), (whether or not such compounds in such claim are those of items (i) – (iii)) and such Patent Rights are owned solely or jointly by AMRI or any of its Affiliates, and in each case such compounds are owned solely or jointly by AMRI or any of its Affiliates (including but not limited to any such compound that is jointly owned by AMRI and BMS),

 

(v) all isomers, enantiomers, hydrates, conjugates, esters, racemates, polymorphs, and metabolites of any of the foregoing compounds,

 

(vi) all salt forms of any of the foregoing compounds; and

 

(vii) all prodrugs of any of the foregoing compounds.

 

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For the avoidance of doubt, a compound claim of item (iv) excludes any formulation, process, method of use, or combination claim and is limited to a claim that claims a compound per se .

 

“ AMRI Know-How ” means (a) AMRI Compounds; (b) any Know-How directly related to (i) AMRI Compounds and/or BMS Compounds and/or (ii) compositions that contain any AMRI Compound and/or any BMS Compound, and (c) Know-How reasonably required and/or useful for the research, discovery, identification, Development, manufacture and/or use of any Licensed Compound and/or compositions containing any Licensed Compound, in each case, which Know-How is owned solely or jointly by AMRI or any of its Affiliates as of the Effective Date and/or during the Combined Period. For the avoidance of doubt, AMRI Know-How may include research tools and targets.

 

“ AMRI Patent Rights ” means all of the Patent Rights that are owned solely or jointly by AMRI or any of its Affiliates which (i) claim an invention conceived or reduced to practice prior to the Effective Date or during the Combined Period relating to any Amine Neurotransmitter Reuptake-Inhibitor Compound and/or a composition containing such a compound and/or the research, discovery, identification, Development, manufacture, Commercialization and/or use of such a compound and/or composition, or (ii) to the extent not included in (i) claim an invention conceived or reduced to practice pursuant to work performed under the Research Program relating to a compound, a composition and/or the research, discovery, identification, Development, manufacture, Commercialization and/or use of a compound and/or composition, or (iii) to the extent not included in (i) and (ii), are directed to an AMRI Compound and/or BMS Compound and/or a composition containing such a compound and/or the research, discovery, identification, Development, manufacture, Commercialization and/or use of such a compound and/or composition. For the avoidance of doubt AMRI Patent Rights include the Attachment A Patent Rights and the Assigned Patent Rights. All of the Assigned Patent Rights as of the Effective Date are listed in Part I of Exhibit 1.1A, all of the Attachment A Patent Rights as of the Effective Date are listed in Part II of Exhibit 1.1A, and all other AMRI Patent Rights as of the Effective Date are listed in Part III of Exhibit 1.1A .

 

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For the further avoidance of doubt, all Patent Rights that are owned solely or jointly by AMRI or any of its Affiliates and that are reasonably required and/or useful to use the AMRI Know-How licensed to BMS under this Agreement for the research, discovery, identification, Development, manufacture and/or use of any AMRI Compound and/or any BMS Compound and/or compositions containing any AMRI Compound and/or any BMS Compound are included in the AMRI Patent Rights, a Patent Right is an AMRI Patent Right even if such Patent Right includes or claims an invention in addition to those of items (i) – (iii) above, and AMRI Patent Rights may include Patent Rights covering targets and/or research tools.

 

“ AMRI Technology ” means AMRI Patent Rights and AMRI Know-How.

 

“ API ” means an active pharmaceutical ingredient.

 

“ Approvals ” means and includes all licenses, permits, authorizations, and approvals, including, but not limited to reimbursement decisions and price approvals, of, and all registrations, filings, and other notifications to, any governmental agency or department within the Territory, including, without limitation, the FDA, the EMEA in Europe and the Koseisho in Japan and equivalent foreign agencies, necessary or appropriate for the manufacture, production, distribution, marketing, sale, and/or use of a Licensed Product for commercial purposes anywhere within the Territory.

 

“Assigned Patent Rights” has the meaning assigned in the Recitals.

 

“Attachment A Patent Rights” has the meaning assigned in the Second Amendment to the Existing License Agreement.

 

“BMS Compounds” means (i) the Amine Neurotransmitter Reuptake-Inhibitor Compounds that are listed in Exhibit 1.1G and those compounds that exist as of the Effective Date that (a) are

 

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owned solely or jointly by BMS or any of its Affiliates, (b) are known by BMS or any of its Affiliates to be Amine Neurotransmitter Reuptake-Inhibitor Compounds as of the Effective Date, and (c) BMS elects in writing to include them as BMS Compounds under this Agreement,

 

(ii) all compounds first synthesized pursuant to the Research Program and owned solely or jointly by BMS or any of its Affiliates,

 

(iii) all compounds Covered at the time of filing and/or at the time of grant by a compound claim of Patent Rights that are filed on any of the compounds included in item (ii), (whether or not such compounds in such claim are those of item (ii)) and such Patent Rights are owned solely or jointly by BMS or any of its Affiliates, and in each case such compounds are owned solely or jointly by BMS or any of its Affiliates,

 

(iv) those compounds that (a) are Covered at the time of filing and/or at the time of grant by a compound claim of Patent Rights that are filed on any of the compounds included in item (i), (whether or not such compounds in such claim are those of item (i)), and in each case such Patent Rights are owned solely by BMS or any of its Affiliates, and (b)  BMS elects to include as BMS Compounds under this Agreement,

 

(v) all isomers, enantiomers, hydrates, conjugates, esters, racemates, polymorphs, and metabolites of any of the foregoing compounds,

 

(vi) all salt forms of any of the foregoing compounds; and

 

(vii) all prodrugs of any of the foregoing compounds.

 

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BMS Compounds do not include compounds that are AMRI Compounds. For the avoidance of doubt, a compound claim of item (iii) or (iv) excludes any formulation, process, method of use, or combination claim and is limited to a claim that claims a compound per se .

 

“ BMS Know-How ” means (a) BMS Compounds-, (b) Know-How directly related to (i) BMS Compounds and/or AMRI Compounds and/or (ii) compositions that include any BMS Compound and/or any AMRI Compound, and (c) Know-How reasonably required for the manufacture or use of any Licensed Compound and/or compositions that include any Licensed Compound, in each of the foregoing cases which Know-How is owned by BMS or any of its Affiliates as of the Effective Date and/or during the Combined Period. For the avoidance of doubt, BMS Know-How excludes research tools and targets.

 

“BMS Licensed Patent Rights” means all of the Patent Rights that are owned solely or jointly by BMS or its Affiliates which (i) claim an invention conceived or reduced to practice pursuant to work performed under the Research Program with respect to a compound, a composition and/or the manufacture and/or use of a compound and/or composition, or (ii) to the extent not included in (i), claim an Amine Neurotransmitter Reuptake Inhibitor Compound included in item (i) of the definition of BMS Compounds and/or a composition containing such a compound and/or the manufacture and/or use of such a compound or composition, or (iii) to the extent not included in (i) or (ii) is directed to an AMRI Compound and/or BMS Compound or a composition containing such a compound and/or the manufacture and/or use of such a compound and/or composition or (iv) to the extent not included in (i) or (ii) claims an invention conceived or reduced to practice during the Combined Period pursuant to activities directed to researching, Developing and/or improving Licensed Compounds as Amine Neurotransmitter Reuptake-Inhibitors.  For the avoidance of doubt, BMS Licensed Patent Rights do not include Patent Rights Covering targets and/or research tools. For the further avoidance of doubt, a Patent Right is a BMS Licensed Patent Right even if such Patent Right includes or claims an invention in addition to those of items (i) – (iii) above.

 

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“ BMS Patent Rights ” means Patent Rights that are Controlled by BMS or its Affiliates prior to or during the term of this Agreement and that BMS or its Affiliates have the right to enforce.

 

“ BMS Technology ” means BMS Licensed Patent Rights and BMS Know-How.

 

“Business Day” or “business day” means a day other than Saturday, Sunday or any day on which commercial banks located in New York, New York are authorized or obligated by law to close.

 

“ Calendar Quarter ” means a three-month period ending on the last day of March, June, September or December in any year.

 

“Calendar Year ” means the period from January 1 through December 31.

 

“Combination Product” means a Licensed Product that includes at least one API other than a Licensed Compound. Drug delivery vehicles, adjuvants, and excipients shall not be deemed to be “APIs”, except in the case where such delivery vehicle, adjuvant, or excipient is recognized by the FDA as an API in accordance with 21 CFR 210.3(b)(7).

 

“ Combined Period ” means the period beginning on the Effective Date and ending at the end of the Extended Period.

 

“ Commercialize ” means to promote, market, distribute, sell and provide product support (including manufacturing) for a product, and “ Commercializing ” and “ Commercialization ” shall be interpreted accordingly.

 

“ Commercially Reasonable Efforts ” means, with respect to the efforts to be expended by a Party with respect to an activity, such reasonable, diligent, good faith efforts to accomplish such

 

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activity as such Party would normally use to accomplish a similar activity.  With respect to the Development of at least one Licensed Product in the United States and Major Market Countries, Commercially Reasonable Efforts means the reasonable, diligent good-faith effort (and funding thereof) that BMS would use for a product at a similar stage of development as to which the Licensed Product is being Developed, taking into account the safety and efficacy profile of the Licensed Product and the regulatory requirements for Approval thereof in the applicable country. With respect to Commercialization of at least one Licensed Product in the United States and Major Market Countries, Commercially Reasonable Efforts means the reasonable, diligent good-faith efforts (and funding thereof) that would be used by BMS for a product of similar commercial potential that BMS would continue to Commercialize in the United States and/or the applicable Major Market Countries.

 

Such efforts also require that the applicable Party shall (i) on a timely basis assign responsibility for such activities to specifically identified and sufficiently qualified and experienced employees who are held accountable for progress and monitor such progress on an ongoing basis, (ii) set and consistently seek to achieve specific and meaningful objectives for carrying out such activities, and (iii) consistently implement decisions and allocate human, financial, and organizational resources designed to advance progress toward each of these objectives. The Parties shall regularly, clearly, and in reasonable detail record evidence of compliance with each of items (i) through (iii) above in research and development plans, laboratory and other logbooks, reports, and other normally used documentation in the pharmaceutical business all in accordance with standard scientific procedures.

 

“Confidential Information” has the meaning assigned in Section 9.1.

 

“ Control ” or “ Controlled ” means, with respect to any intellectual property right or other intangible property, the possession (whether by license or ownership, or by control over an Affiliate having possession by license or ownership) by a Party, of the ability to grant to the other Party access

 

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and/or a license or sublicense as provided herein without violating the terms of any agreement with any Third Party.

 

“ Cover ,” “ Covered ” or “ Covering ” means, with respect to Patent Rights, that the making, using, importation, offer for sale or sale of an invention claimed in such Patent Rights or the conducting of an activity, in the absence of a license under such Patent Rights, would infringe at least one claim of such Patent Rights whether present in an issued patent or in a patent application if it issued as a patent containing such claim.

 

“Development ” means non-clinical and clinical drug development activities reasonably related to the development and submission of information to a Regulatory Authority, including, without limitation, toxicology, pharmacology and other discovery and pre-clinical efforts, test method development and stability testing, process development, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical studies (including, without limitation, pre- and post-approval studies and specifically excluding regulatory activities directed to obtaining pricing and reimbursement approvals) and manufacturing of clinical materials. When used as a verb, “Develop” means to engage in Development. “Developing”  means engaging in Development.

 

“ Dollars ” or “ $ ” means the legal tender of the United States of America.

 

“ Drug Approval Application ” means an application for Approval required for commercial sale or marketing of a Licensed Product in a regulatory jurisdiction, including without limitation an NDA, an MAA or a JNDA.

 

“ECN Approval” means the approval, by BMS, of a Licensed Compound to proceed to studies leading to an IND filing and clinical Development.

 

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“ ECN Compound ” means a Licensed Compound that has achieved ECN Approval prior to the end of the Combined Period.

 

“Effective Date ” means the date on which this Agreement shall have been executed by all Parties.

 

“EMEA” means the European Agency for the Evaluation of Medicinal Products, or any successor agency thereto.

 

“Excluded Compounds” means the compounds included in items (i) and (iv), of the definition of BMS Compounds and the corresponding compounds included in items (v) through (vii) of the definition of BMS Compounds that are not ECN Compounds or Released Compounds at the time any right or this Agreement is terminated under Section 13.2.1, 13.2.2 or 13.3.1, and (b) Licensed Compounds, the Development or Commercialization of which was terminated by BMS or an Affiliate or sublicensee of BMS for Safety Reasons.

 

“ Excluded Products” means (a) compositions, including products, containing any Excluded Compound, and (b) Licensed Products, the Development or Commercialization of which was terminated by BMS for Safety Reasons.

 

“Existing License Agreement ” means the License Agreement entered into by Albany Molecular Research Inc., BMS and Bristol-Myers Squibb Pharma Company (formerly called “DuPont Pharmaceuticals Company”) on March 15, 2002, as amended by the First Amendment to License Agreement, dated September 11, 2003, and by the Second Amendment to License Agreement, dated January 7, 2004.

 

“ Extended Period ” means the period beginning at the end of the Research Term and ending four (4) years after the end of the Research Term.

 

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“ FDA ” means the United States Food and Drug Administration or any successor agency having comparable jurisdiction.

 

“ Field ” means all uses for the treatment, palliation, prevention or control of any human or animal diseases, disorders or conditions.

 

“ Finished Product ” means a Licensed Product that is labeled, packaged and released in a form suitable for use by the end user.

 

“ First Commercial Sale ” means, in any particular country of the Territory, the first sale of a Royalty Bearing Product in that country for use by the general public after Approval has been granted by the Regulatory Authority of that country for such Royalty Bearing Product.

 

“ FTE ” means the equivalent of the work of one (1) employee full time for one (1) year of work directly related to the research, discovery, identification, Development or manufacture of Licensed Compounds and Licensed Products, or any other activities contemplated under this Agreement.

 

“ FTE Rate ” means the FTE rate applicable to AMRI’s FTEs, which rate, as of the Effective Date, is set forth in Exhibit 1.1D . Beginning in the third year of the Research Program, the FTE Rate will be increased by three (3) percent per year.

 

“GAAP ” means United States generally accepted accounting principles.

 

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“Good Manufacturing Practices” or “cGMPs” means current good manufacturing practices for pharmaceuticals as described in regulations promulgated by the FDA, or an equivalent regulatory agency.

 

“Included Compounds” means (a) all isomers, enantiomers, hydrates, conjugates, esters, racemates, polymorphs, and metabolites of a particular compound, (b) all salt forms of such particular compound and of the compounds included in (a), and (c) all prodrugs of such particular compound and of the compounds included in (a) and (b).

 

“ IND ” means an Investigational New Drug Application filed with the FDA in the United States with respect to a Licensed Product.

 

“IND Equivalent” means any similar application filed with the Regulatory Authority in any other country in the Territory with respect to a Licensed Product.

 

“ Indication ” means a disease entity, disorder, condition, symptom or syndrome, for which a product may be approved for treatment, palliation, prevention or control by the FDA or equivalent Regulatory Authority, or for which such Approval may be sought from the FDA or equivalent Regulatory Authority. Examples of Indications are listed in the major bullet points of Exhibit 1.1F , and each such Indication is further exemplified by sub-indications listed below the Indication. For the purposes of this Agreement, an Indication includes the Indication and all of its respective sub-indications as exemplified in Exhibit 1.1F .

 

“ Joint Research Committee ” or “ JRC ” means the committee comprised of representatives of both Parties established pursuant to Section 2.3.1, having the responsibilities set forth in Sections 2.3 2 and 2.3.3, and having the membership set forth in Section 2.4.1.

 

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“JNDA” means a Drug Approval Application filed with the Koseisho required for marketing approval for the applicable Licensed Product in Japan.

 

“JNDA Approval” means Approval of a JNDA by the Koseisho for the applicable Licensed Product in Japan.

 

“ Know-How ” means any information and/or invention and/or material, whether or not proprietary or patentable and whether stored or transmitted in oral, documentary, electronic or other form. Know-How includes, without limitation, ideas, concepts, formulas, methods, procedures, designs, compounds, compositions, plans, documents, data, discoveries, developments, works of authorship, biological materials, and any information relating to research and development plans, experiments, results, compounds, therapeutic leads, candidates and products, clinical and preclinical data, trade secrets and manufacturing, marketing, financial, regulatory, personnel and other business information and plans, and any scientific, clinical, regulatory, marketing, financial and commercial information or data. Notwithstanding anything herein to the contrary, Know-How shall exclude Patent Rights.

 

“Koseisho” means the Japanese Ministry of Health and Welfare, or any successor agency thereto.

 

“Lead Party” refers to that Party having pursuant to Section 3.2(e) or Section 3.2(f) the patent enforcement and extension rights set forth in Article 14 of this Agreement.

 

“Lead Party Patent Rights” means those Patent Rights for which a Party is the Lead Party.

 

“Lead Product” means a Licensed Product under Development for which there is at least one back-up Licensed Product under Development.

 

“License” means a grant and/or transfer of rights, other than ownership, with respect to the Development and/or Commercialization of any Licensed Compound and/or Licensed Product.

 

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“License” also refers to the corresponding grant and/or transfer by AMRI of rights back to BMS with respect to one or more Licensed Compound(s) and/or Licensed Product(s) pursuant to Article 5.

 

“Licensed Compound(s)” means (i) BMS Compounds, (ii) AMRI Compounds, (iii) compounds which at the time of filing and/or at the time of grant are Covered by a compound claim of an AMRI Patent Right and/or a BMS Licensed Patent Right, (iv) Retained Compounds, (v) Released Compounds, and (vi) compounds that (a) are conceived or reduced to practice during the Combined Period or * thereafter, (b) are Amine Neurotransmitter Reuptake Inhibitors, and (c) are based on and/or derived from a compound of any of items (i) – (v) above. For the avoidance of doubt, a compound claim of item (iii) excludes any formulation, process, method of use, or combination claim and is limited to a claim that claims a compound per se .

 

“Licensed Product” means any pharmaceutical product containing a Licensed Compound (alone or with other APIs), in all forms, presentations, formulations and dosage forms. For the avoidance of doubt, a Retained Product is a Licensed Product, and a Released Product is a Licensed Product.

 

“MAA Approval” means Approval by the EMEA of a marketing authorization application (“ MAA ”) filed with the EMEA for the applicable Licensed Product under the centralized European procedure and the subsequent obtainment of any reimbursement decisions and price approvals necessary and/or appropriate for the manufacture, production, distribution, marketing, sale, and/or use of the Licensed Product for commercial purposes in any one of the following countries:  France, Germany, Italy, Spain and the United Kingdom. If the centralized EMEA filing procedure is not used, MAA Approval shall be achieved upon the first Approval for the applicable Licensed Product in one of the following countries:  France, Germany, Italy, Spain and the United Kingdom.

 

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“ Major Market Countries ” means the United States, Japan, United Kingdom, France, Germany, Italy and Spain, and “Major Market Country” means one of these countries.

 

“NDA ” means a New Drug Application filed with the FDA in the United States with respect to a Licensed Product in conformance with applicable laws and regulations, and includes any supplemental NDA, and supporting documents for Approval in the United States.

 

“ Net Sales ” shall mean the amount invoiced in a given country by BMS or any Affiliate of BMS or any (sub)licensee of BMS or any Affiliate of a sub(licensee) for sales of a Royalty Bearing Product to a Third Party, and less the following to the extent accrued or credited and not paid or reimbursed by the Third Party:

 

(a)           discounts (including cash discounts and quantity discounts), retroactive price reductions, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers;

 

(b)          credits or allowances accrued upon claims, damaged goods, rejections or returns of such Royalty Bearing Product, including Royalty Bearing Product returned in connection with recalls or withdrawals;

 

(c)           shipping and insurance charges relating to the delivery of a Royalty Bearing Product;

 

(d)          taxes or duties levied on, absorbed or otherwise imposed on the sale of such Royalty Bearing Product, including without limitation value-added taxes, or other governmental charges otherwise imposed upon the invoiced amount, as adjusted for rebates and refunds; and

 

(e)           amounts repaid, credited or written off by reason of uncollectible debt and amounts written off on account of factoring of receivables, to the extent consistent with BMS’

 

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business practices for the majority of its pharmaceutical products, as determined on a country-by-country basis.

 

If a Royalty Bearing Product is sold in the form of a Combination Product (which may be either combined in a single formulation or packaged with separate formulations but sold as one product), Net Sales for such Combination Product will be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B) where A is the invoice price of the Licensed Product containing the Licensed Compound if sold separately (for the same dosage strength), and B is the total invoice price of the other active ingredient or ingredients in the Combination Product, if sold separately. If, on a country-by-country basis, the other active ingredient or ingredients in the Combination Product are not sold separately in said country, Net Sales for the purpose of determining royalties of the Combination Product shall be determined in good faith by the Parties and in a manner consistent with the intent of this Agreement.

 

Net Sales shall be determined by BMS in a manner consistent with GAAP and consistently applied to all products of BMS. For clarity, sales to a distributor (other than a distributor in a country where BMS and its Affiliates do not normally sell through a distributor), wholesaler, group purchasing organization, PBM, or retail chain customer (none of which shall be considered a (sub)licensee or an Affiliate of a (sub)licensee for the purposes of calculating Net Sales) are considered sales to a Third Party; provided, that Net Sales by BMS or an Affiliate of BMS to a Third Party consignee or to a distributor in a country where BMS and its Affiliates do not normally sell through a distributor are not recognized as Net Sales by BMS until the Third Party consignee or such distributor sells the Royalty Bearing Product.

 

In the case of any sale or other disposal of a Royalty Bearing Product between or among BMS and its Affiliates or their (sub)licensees and their Affiliates or distributors in countries where BMS and its Affiliates do not normally sell through a distributor for resale, Net Sales shall be calculated as above on the resale to an independent Third Party. Subject to the preceding paragraph, for the purposes of Net Sales, a (sub)licensee is a person or entity that obtains a (sub)license from BMS or its

 

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Affiliates or a person or entity that obtains such rights through a person or entity that has been granted such a (sub)license.

 

Only one royalty shall be paid on the sale of each unit of a Royalty Bearing Product.

 

“Non-Advanced Lead Candidate Compound” means a Licensed Compound that is not identified in Exhibit 1.1C .

 

“Patent Rights” means (a) patents and patent applications Covering the research, discovery, identification, Development, manufacture, use, exportation, importation, offer for sale and/or Commercialization of any compound and/or product, (b) all foreign counterparts thereof, (c) all divisionals, continuations, continuations-in-part thereof or any other patent application claiming priority directly or indirectly to (i) any of the patents or patent applications in (a)  or (b) or (ii) any patent or patent application from which the patents or patent applications in (a) or (b) claim direct or indirect priority, and (d) all patents issuing on any of the foregoing, and any foreign counterparts thereof, together with all registrations, reissues, re-examinations, supplemental protection certificates, or extensions thereof, and any foreign counterparts thereof.

 

“ Patented Royalty Bearing Product ” means a Licensed Compound or Licensed Product that is Covered by a Valid Claim of an AMRI Patent Right and/or BMS Licensed Patent Right.

 

“ Party ” means AMRI or BMS; “ Parties ” means BMS and AMRI.

 

“Phase I Clinical Trial” means a human clinical trial of a Licensed Product, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients.

 

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“ Phase IIa Clinical Trial ” means a human clinical trial in patients with the disease or indication under study of a Licensed Product, the principal purpose of which is to provide an indication of the efficacy of the Licensed Product for its intended use. A Phase IIa Clinical Trial shall be deemed to have commenced when the first patient in such trial has been dosed.

 

“Phase IIb Clinical Trial” means a controlled clinical trial which utilizes the pharmacokinetic and pharmacodynamic information obtained from one or more previous Phase I Clinical Trial(s) and/or Phase IIa Clinical Trial(s) to confirm the optimal manner of use of the Licensed Product (dose and dose regimen) prior to initiation of the pivotal Phase III Clinical Trials. The period of dosing in Phase IIb Clinical Trials will typically be more than two (2) weeks (the duration of dosing in Phase IIa Clinical Trials) and less than twenty-six (26) weeks (the minimum duration of dosing typically expected in the Phase III Clinical Trials). A Phase IIb Clinical Trial shall be deemed to have commenced when the first patient in such trial has been dosed.

 

“ Phase III Clinical Trial ” means a pivotal human clinical trial of a Licensed Product on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use, and to define warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, and to support approval by a Regulatory Authority of such pharmaceutical product or label expansion of such pharmaceutical product. A Phase III Clinical Trial shall be deemed to have commenced when the first patient in such trial has been dosed.

 

“Primary Screening Program” has the meaning assigned in Section 3.8.

 

“ Registration Dossier ” means (i) any Drug Approval Application or (ii) any registration or other filing made with a Regulatory Authority to initiate or receive approval to initiate clinical testing in a country (e.g., an IND).

 

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“ Regulatory Authority ” means, any governmental authority, including without limitation FDA, EMEA or Koseisho, with responsibility (i) for granting any licenses or approvals or granting pricing and/or reimbursement approvals necessary for the marketing and sale of a Licensed Product in any country or (ii) for allowing the conduct of clinical trials in a given country.

 

“ Related Compounds” has the meaning assigned in Section 3.2(b).

 

“Released Compound” means a compound that becomes a Released Compound pursuant to Section 3.2(b), 3.2(c) or 3.2(d).

 

“Released Product(s)” means any pharmaceutical product containing a Released Compound (alone or with other APIs), in all forms, presentations, formulations and dosage forms.

 

“Research Plan” means the research activities and timelines set forth in Exhibit 1.1B , and as may be amended from time to time by the JRC.

 

“ Research Program ” means a research program directed to researching, discovering and identifying Amine Neurotransmitter Reuptake-Inhibitors for human therapeutic uses to be performed by the Parties pursuant to this Agreement. For the avoidance of doubt, the Research Program does not include any activities with respect to any Licensed Compound after such Licensed Compound achieves ECN Approval or becomes a Released Compound. A description of the Research Program and the responsibilities of the Parties under the Research Program is contained in the Research Plan, which is attached hereto as Exhibit 1.1B .

 

“ Research Term ” has the meaning assigned in Section 2.9.

 

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“ Reserved Indications ” has the meaning assigned in Section 4.2.1.

 

“ Retained Compound ” means (i) an ECN Compound and/or (ii) a compound that becomes a Retained Compound pursuant to Section 3.2(b), 3.2(c) or 3.2(d).

 

“Retained Product” means any pharmaceutical product containing a Retained Compound (alone or with other APIs), in all forms, presentations, formulations and dosage forms.

 

“ Royalty Bearing Product ” means individually and collectively Unpatented Royalty Bearing Product and Patented Royalty Bearing Product.

 

“Safety Reasons” means it is BMS’ or one of its Affiliates’ or sublicensee’s reasonable belief that there is an unacceptable risk for harm in humans based upon pre-clinical data, including but not limited to data from toxicology studies, or based upon the observation of adverse effects in humans after a Licensed Compound or Licensed Product has been administered to or taken by humans, such as during a clinical trial or after the launch of a Licensed Product.

 

“ Synthesized Compound ” means a Licensed Compound that has been synthesized by or on behalf of BMS and/or AMRI or any of their Affiliates prior to the end of the Combined Period.

 

 “ Territory ” means the world.

 

 “ Third Party ” means any person other than a Party or an Affiliate of a Party.

 

“ Unpatented Royalty Bearing Product ” means a Licensed Compound or Licensed Product that is not a Patented Royalty Bearing Product.

 

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“Unrestricted Indications” has the meaning assigned in Section 4.2.1.

 

 “ U.S .” or “ United States ” means the fifty states of the United States, the District of Columbia, Puerto Rico, and all territories and possessions of the United States.

 

“ Valid Claim ” means a claim of any issued, unexpired patent that has not been revoked or held unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction from which no appeal can be taken, or with respect to which an appeal is not taken within the time allowed for appeal, and that has not been disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.

 

“Warrant Issue Agreement” means the Warrant Issue Agreement entered into by AMRI and BMS on March 15, 2002, as amended by the First Amendment to the Warrant Issue Agreement, dated September 11, 2003, and by the Second Amendment to the Warrant Issue Agreement, dated April 30, 2004.

 

1.2           Additional Defined Terms . The following additional defined terms shall have the meanings set forth below or in the sections of this Agreement listed below:

 

“Additional Compound” has the meaning assigned in Section 3.2(c).

 

“AMRI Third Party Rights” has the meaning assigned in Section 3.7.

 

“Attachment A Patent Rights” has the meaning assigned in the Second Amendment.

 

“BMS Third Party Rights” has the meaning assigned in Section 4.3.

 

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“First Amendment” means the First Amendment to the Existing License Agreement entered into by AMRI and BMS on September 11, 2003.

 

“Second Amendment” means the Second Amendment to the Existing License Agreement entered into by AMRI and BMS on January 7, 2004.

 

2.              OBJECTIVE OF RESEARCH PROGRAM; MANAGEMENT OF RESEARCH PROGRAM

 

2.1           Objective of Research Program . The objective of the Research Program is: (i) to discover Amine Neurotransmitter Reuptake-Inhibitors for human therapeutic uses, and (ii) to conduct IND-enabling testing on Licensed Compounds to the point where BMS may identify those Licensed Compounds that BMS wants to take into clinical development.

 

2.1.1         BMS will be solely responsible for the following activities that are necessary for the Research Program:  performing primary and advanced biological testing, including, but not limited to screening compounds for biological and therapeutic activities, performing secondary pharmacodynamic testing, performing testing related to pre-clinical optimization of compounds (including but not limited to safety studies), performing pharmacokinetic and ADME studies, studying pharmaceutical formulations, and performing toxicology testing. BMS, and any Third Parties employed by BMS in its sole discretion to carry out any such activities, shall perform such activities in accordance with the Research Plan, and in the case of any such Third Parties, BMS shall be responsible for their compliance with the Research Plan. AMRI shall have no right or option to supply or perform such activities for BMS.

 

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2.1.2         AMRI will be responsible for performing all necessary medicinal chemistry and analytical chemistry research included in the Research Program related to the discovery of Amine Neurotransmitter Reuptake-Inhibitors for human therapeutic uses, including but not limited to designing new molecules, synthesizing compounds for biological testing, and providing bulk samples of compounds, if appropriate, in such quantities as may be required for preliminary compound optimization studies. BMS agrees to pay AMRI for all such costs pursuant to Sections 2.7 and 2.8 and Exhibit 1.1D. AMRI may not outsource to any Third Party any chemistry research included in the Research Program for which it is responsible without the prior written consent of BMS, which shall not be unreasonably withheld. AMRI, and any Third Parties employed by AMRI with the written consent of BMS, shall perform the activities for which AMRI is responsible under the Research Program, in accordance with the Research Plan, and in the case of any such Third Parties, AMRI shall be responsible for their compliance with the Research Plan and the applicable provisions of this Agreement, including but not limited to Article 9 and Section 14.1.

 

2.1.3         AMRI and BMS recognize that each Party will have knowledge and experience in the other Party’s areas of responsibility. With this in mind, and for the purpose of maximizing the productivity and probability of success of the Research Program, AMRI and BMS will each be receptive to the advice and suggestions of the other, in the conduct of the Research Program.

 

2.1.4        The Research Program and the responsibilities of the Parties under the Research Program are described in more detail in the Research Plan attached hereto as Exhibit 1.1B .

 

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2.2            Additional Agreements. The Parties may implement certain matters of this Agreement through a number of separate agreements, as and when required, concluded between them or at the level of their Affiliates as the case may be. The provisions of such agreements will be determined in reasonable and fair negotiations along the lines of, and respecting the principles set forth in this Agreement. AMRI and BMS guarantee that their respective Affiliates will in all respects adhere to the terms and provisions of this Agreement and all agreements concluded pursuant thereto.

 

2.3   Joint Research Committee.

 

2.3.1         Formation and Purpose . Within thirty (30) days after the Effective Date, AMRI and BMS shall establish the Joint Research Committee, which shall oversee and coordinate the activities of the Parties under the Research Program and expedite the synthesis of new compounds, and the selection, testing and Development to pre-ECN Approval of Licensed Compounds. The JRC shall have the membership and shall operate by the procedures set forth in Section 2.4. The JRC shall be dissolved at the end of the Combined Period unless otherwise agreed to by the Parties.

 

2.3.2         Specific Responsibilities of the JRC During the Term of the Research Program . In addition to its overall responsibility for the Research Program, the JRC shall, in particular, during the Research Term:

 

(i)             resolve any disputes or disagreements relating to the Research Program that are submitted to it;

 

(ii)            monitor the progress of pre-ECN Approval studies of each Licensed Compound in the Territory;

 

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(iii)           facilitate the exchange of data relating to all tests and studies performed as part of the Research Program for each Licensed Compound;

 

(iv)           modify the Research Plan as necessary, but in no event shall such modification increase the chemistry resource requirements for AMRI to greater than * FTEs without the consent of AMRI or be contrary to the intent and purpose of this Agreement, including but not limited to the requirements of Section 2.7;

 

(v)            control all chemical process development and manufacturing of Licensed Products for GLP toxicity studies and clinical trials (including, without limitation, manufacture of API (other than API that is manufactured by the commercial process for such API), but not formulation, packaging and finishing of supplies); and

 

(vi)           facilitate exchange of information with respect to work being performed by BMS on ECN Compounds.

 

2.3.3         Specific Responsibilities of the JRC Following the Term of the Research Program . Following the expiration of the Research Term, the JRC shall continue to have the responsibilities enumerated in Sections 2.3.2(ii) and (vi) during the Extended Period. During the Extended Period, the JRC shall meet once per Calendar Quarter, or less frequently, as the Parties may decide, and at each such meeting, BMS will update the JRC on what Licensed Compounds are being Developed by BMS at that time, and provide AMRI with any information it might reasonably request in order for it to assess progress of any Licensed Compound. The JRC will also be responsible for

 

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determining the disposition of the Synthesized Compounds, as described in Section 3.2(b).

 

2.3.4         Decisions of the JRC . The JRC shall make its decision on matters within its purview only after the JRC discusses such matters and only after reasonably considering each Party’s comments (through its JRC members) on such matters. All decisions by the JRC must be consistent with the terms of this Agreement, and may not modify the terms and conditions of this Agreement or the rights and obligations of a Party under this Agreement.

 

2.4            JRC Membership and Procedures .

 

2.4.1         Membership . For the JRC, each of AMRI and BMS shall designate four (4) representatives with appropriate expertise to serve as members of such Committee. Each Party may replace any of its JRC representatives at any time upon written notice to the other Party. The JRC shall have co-chairpersons. BMS and AMRI shall each select from their representatives a co-chairperson for the JRC. The co-chairpersons of the JRC shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of the JRC, and preparing and issuing minutes of each meeting within thirty (30) days thereafter; provided that a JRC co-chairperson shall call a meeting of the JRC promptly upon the written request of the other co-chairperson to convene such a meeting. Such minutes will not be finalized until both chairpersons review and confirm the accuracy of such minutes in writing.

 

2.4.2         Meetings . Except as provided in Section 2.3.3, the JRC shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every Calendar Quarter. The JRC shall meet alternately at AMRI’s

 

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facilities in New York and BMS’ facilities in Connecticut or at such locations as the Parties may otherwise agree. Other employees of each Party involved in the Development and/or Commercialization of a Licensed Compound and/or Licensed Product may attend meetings of the JRC as nonvoting participants, and, with the consent of each Party, consultants, representatives, or advisors involved in the Development of a Licensed Compound and/or Licensed Product may attend meetings of the JRC as nonvoting observers; provided that each such Third Party representative is under obligations of confidentiality and non-use applicable to the Confidential Information of each Party that are at least as stringent as those set forth in Article 9 and each such Third Party representative is obligated under a written agreement to assign to a Party its entire right, title and interest in any invention conceived by it in the course of its activities related to this Agreement, including during its attendance at a meeting of the JRC. Each Party shall be responsible for all of its own expenses of participating in the JRC (including without limitation in the Working Group and any sub-committee of the JRC). Meetings of the JRC may be held by audio or video teleconference with the consent of each Party; provided that at least one (1) meeting of the JRC per Calendar Year shall be held in person. A quorum for a meeting of the JRC requires the presence of at least one designee of each Party.

 

2.4.3         Decision-Making . Each Party’s designees on the JRC shall, collectively, have one vote (the “ Party Vote ”) on all matters brought before the JRC, which Party Vote shall be determined by majority vote (the “ Designee Vote ”) of such designees present at the meeting. Except as otherwise expressly provided in this Agreement, the JRC shall operate as to matters within its jurisdiction by unanimous Party Vote (although the votes of the designees underlying such Party Votes need not be unanimous); provided , that the JRC shall not have the authority to amend or modify, or waive compliance with, this Agreement other than to modify the Research Plan, but only as

 

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permitted by this Agreement. Notwithstanding any other provision of this Agreement, BMS shall have final decision-making authority and tie-breaking vote on the JRC with respect to all matters delegated to the JRC that are set forth in Section 2.3, which shall be made in good faith including a consideration of the interests of both Parties to this Agreement; provided , that no such decision shall violate or breach any provision of this Agreement, and no such authority or tie-breaking vote shall extend to disputes concerning the validity, interpretation or construction of, or the compliance with or breach of, this Agreement. No such decision by BMS in the exercise of its final decision-making authority shall be subject to any dispute resolution mechanism or procedure, including without limitation any dispute resolution mechanism provided for in Article 17.

 

2.4.4         Meeting Agendas . Each Party will disclose to the other proposed agenda items along with appropriate information at least five (5) Business Days in advance of each meeting of the JRC; provided that under exigent circumstances requiring JRC input, a Party may provide its agenda items to the other Party within a lesser period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such JRC meeting.

 

2.4.5         Working Groups . A working group will be established immediately after the formation of the JRC (the “Working Group” ). The Working Group will have three chairpersons:  a chemistry chairperson from AMRI, a chemistry chairperson from BMS and a biology chairperson from BMS. The key responsibility of the Working Group will be the day-to-day execution of the Research Plan. The Working Group will report directly to the JRC and will present its progress against the Research Plan to the JRC once per Calendar Quarter during the term of the Research Program. The

 

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chairpersons of the Working Group will designate employees from BMS and AMRI to be members of the Working Group as needed to get proper representation on the Working Group for all expertise needed to execute the Research Plan. In addition, from time to time, the JRC may establish and delegate duties to sub-committees on an “as-needed” basis to oversee particular projects or activities. Each such sub-committee shall be constituted and shall operate as the JRC determines. Sub-committees may be established on an ad hoc basis for purposes of a specific project or on such other basis as the JRC may determine. The Working Group and each sub-committee and their activities shall be subject to the oversight, review and approval of, and shall report to, the JRC. Decisions of the Working Group and each sub-committee shall be reached by consensus between the Parties, and in no case shall either Party have a casting vote in decisions of the Working Group, or any sub-committee of the JRC. In the case of a non-concurrence in the Working Group, or in a sub-committee, the issue shall be referred for a decision to the JRC. In no event shall the authority of the Working Group exceed that specified for the JRC in this Article 2.

 

2.4.6         Interactions Between the JRC and the Working Group, and Internal Teams . The Parties recognize that while they will establish the JRC, the Working Group, and sub-committees of the JRC for the purpose of the Research Program, each Party possesses an internal structure (including without limitation various committees, teams and review boards) that will be involved in administering such Party’s activities under this Agreement. The JRC and the chairpersons of the Working Group shall establish procedures to facilitate communications between the JRC and the Working Group and any relevant internal committee, team or board in order to maximize the efficiency of the Research Program, including without limitation by requiring appropriate members of the JRC, the Working Group, or any sub-committee

 

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of the JRC to be available at reasonable times and places and upon reasonable prior notice for making appropriate oral reports to, and responding to reasonable inquiries from, the relevant internal committee, team or board. Furthermore, the JRC and the Working Group will establish the necessary working level contacts between the two Parties to ensure that necessary day-to-day interactions will occur in implementing the Research Plan.

 

2.5            Research Program Guidelines. It is the intent of the Parties, in working together in the Research Program to assign responsibilities for the various operational aspects of the Research Program to those portions of their respective organizations which have the appropriate resources, expertise and responsibility for such functions. In all matters related to the Research Program, the Parties shall strive to balance as best they can the legitimate interests and concerns of the Parties and to realize the economic potential of the Licensed Compounds and Licensed Products (taking into account the risks and costs of further Development and Commercialization).

 

2.6            Compliance with Law . Each Party hereby covenants and agrees to comply with all laws and regulations applicable to its activities connected with the Development, manufacture and Commercialization (as applicable) of Licensed Compounds and Licensed Products, including without limitation all applicable laws in carrying out such research and development activities, including, where applicable, Good Laboratory Practice Rules, Good Clinical Practice Rules, Good Manufacturing Practice Rules, and Good Information Practice Rules that are generally accepted in the pharmaceutical industry.

 

2.7            FTEs. BMS will fund * (*) FTE’s per year for each year of the Research Term at the FTE Rate. All of such FTEs shall be deployed on the Research Program to perform medicinal chemistry and analytical chemistry related to the Research Program. If at any time after the

 

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second anniversary of the Effective Date of the Agreement any of the * (*) FTEs are not required to work on the Research Program, BMS shall have the right to have such funded FTEs redeployed to work on other medicinal chemistry research for BMS.

 

2.8            In addition to the FTE Rate, BMS shall reimburse AMRI for all of its Research Program-specific out-of-pocket costs, including but not limited to, chemicals, reagents, materials, supplies, chromatography columns, and equipment purchased directly for use in the Research Program. At the end of each month, AMRI shall invoice BMS for such out-of-pocket costs incurred during such month; provided, however, the Parties agree that any such out-of-pocket costs in excess of $1,000.00 require the written approval of BMS, prior to being incurred, and that BMS shall not be liable for items purchased for the Research Program in excess of $1,000.00 per item without BMS’ prior written consent. BMS shall pay any such invoices within fifty (50) days after receipt thereof. BMS retains ownership of any such Research Program-specific items, including but not limited to, chemicals, reagents, materials, supplies, chromatography columns, and equipment, and at BMS’ option, AMRI agrees to deliver, at BMS’ expense, or to dispose of such Research Program-specific items following completion of the Research Term or earlier termination of this Agreement. The Parties agree that if AMRI wishes to retain any such Research Program-specific items, BMS will consider reasonable offers from AMRI to purchase such Research Program-specific items from BMS. AMRI shall afford BMS a reasonable opportunity, from time to time, to verify the direct costs paid by AMRI for any such Research Program-specific items.

 

2.9            Research Term . The Research Program shall commence on the Effective Date and have an initial term of three (3) years (such initial term together with any extensions thereof is referred to as the “Research Term.” ). BMS shall have the option of extending the term of the Research Program on a year-by-year basis thereafter. To extend the initial term of the Research Program by a year, BMS must provide AMRI with at least ninety (90) days written

 

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notice prior to the end of the initial term of the Research Program that BMS wants to extend the term of the Research Program by a year, whereupon the term of the Research Program will be extended for a year. Thereafter, BMS must provide AMRI with at least ninety (90) days written notice prior to the end of the extended term of the Research Program that BMS wants to extend the term of the Research Program by another year, whereupon the term of the Research Program will be extended for another year. Should BMS fail to provide such written notice, as described above, and ask to extend the term of the Research Program less than ninety (90) days prior to the end of the initial term of the Research Program or the extended term of the Research Program, as the case may be, then AMRI shall have no obligation to extend the term of the Research Program. At that time the Parties may agree to extend the Research Program upon financial terms to be negotiated, but in no case shall the FTE Rate be less than the then prevailing FTE Rate.

 

2.10          Records. Each Party shall maintain complete and accurate records of all work conducted in furtherance of the Research Program and all results, data and developments made in furtherance thereof. Such records shall be in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes.

 

2.11          Reports. During the Combined Period, the Parties shall provide each other with quarterly written reports during the Research Term of the work performed under the Research Program and the results they achieve and with quarterly written reports during the Extended Period of any work performed in connection with the Development and Commercialization of Licensed Compounds and Licensed Products. Each Parties’ quarterly written report shall be provided to the other Party within approximately thirty (30) days of the end of a Calendar Quarter and describe the work performed and the results achieved during the just ended Calendar Quarter. After the Combined Period, and until BMS has satisfied its diligence obligations under Section 8.2 with regard to obtaining Approval of at least one Retained Product for at least one

 

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Reserved Indication in each Major Market Country, unless Commercialization of such Product in any such Major Market Country is not warranted because of Approval and/or Commercialization issues in such country that are not caused by BMS or a product being marketed or to be marketed by BMS in such country, BMS shall provide AMRI with written reports with respect to each Retained Product under Development within sixty (60) days after June 30 and December 31 of each calendar year, which shall describe the work performed and results achieved during the applicable one-half year period and key steps to be taken in the next calendar half-year. BMS shall cooperate with AMRI to answer questions of AMRI with respect to any such report provided after the Combined Period.

 

3.              AMRI LICENSE GRANTS TO BMS ; EXCLUSIVITY; TRANSFER OF AMRI KNOW-HOW

 

3.1            (a)            Subject to the terms, conditions and limitations of this Agreement, including Sections 3.1(f) and 3.6, and the rights retained under Section 3.1(b), AMRI hereby grants to BMS an exclusive license under the AMRI Technology, with the right to sublicense as permitted by and consistent with this Agreement, to research, discover, identify, Develop, make, have made, use, export, import, offer to sell, sell, and Commercialize Licensed Compounds, and Licensed Products in the Field in the Territory, which license after the Combined Period shall exclude Released Compounds and Released Products and which license after the Combined Period shall be co-exclusive with AMRI with respect to Licensed Compounds and Licensed Products that are not Released Compounds and/or Released Products and/or Retained Compounds and/or Retained Products. Any sublicense shall be subject to the terms and conditions of Article 9, Sections 3.1(d) and 3.2(b)-(h), the first sentence of Section 3.6, and Sections 4.3, 4.4, 6.1-6.4 and 11.7 of this Agreement and BMS shall be liable for any breach of Article 9, or the first sentence of Section 3.6, or Section 11.7  of this Agreement by a sublicensee.

 

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(b)            During the Research Term, AMRI retains a license under the AMRI Technology, to perform its obligations under Section 2.1.2 of this Agreement.

 

(c)            After the Combined Period, BMS covenants and agrees that it will not grant any sub-licenses with respect to Licensed Products and/or Licensed Compounds that are not Retained Products and/or Retained Compounds, and AMRI covenants and agrees that it will not grant any sub-licenses with respect to Licensed Compounds and/or Licensed Products that are not Released Compounds and/or Released Products.

 

(d)            After the Combined Period, BMS agrees that BMS will use the co-exclusive license of Section 3.1(a) only for the purpose of synthesizing and testing Licensed Compounds for the purpose of designating such Licensed Compounds as Retained Compounds and AMRI agrees that AMRI will use the co-exclusive license of Section 3.1(a) only for the purpose of synthesizing and testing Licensed Compounds for the purpose of designating such Licensed Compounds as Released Compounds.

 

(e)            For the avoidance of doubt nothing in this Section 3.1 shall be construed as a right or license to any compound that is not a Licensed Compound, including but not limited to any such compound that is not a Licensed Compound that now is or in the future is under Development or being Commercialized by AMRI or any of its Affiliates or any of their licensees or that is contained in a product that now or in the future is under Development or being Commercialized by AMRI or any of its Affiliates or any of their licensees.

 

(f)             Notwithstanding any provision of this Agreement to the contrary, after the Combined Period (or in the event this Agreement is terminated prior to the end of the Combined Period), BMS and its Affiliates shall have the right and license under the AMRI Technology and the

 

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BMS Technology to make, have made, import and use all Licensed Compounds for internal research purposes, and such internal research purposes shall include the generation of derivatives and analogs of Licensed Compounds.

 

3.2            (a)            During the Combined Period, BMS shall have exclusive rights to all Licensed Compounds and all Licensed Products in the Field in the Territory so long as BMS is Developing (pre-clinically or clinically) or Commercializing at least one Licensed Compound or Licensed Product. For the avoidance of doubt, during the Research Term, where BMS is paying for at least * (*) FTE’s of AMRI that are working on the Research Program and/or Licensed Compounds, BMS shall be deemed to be Developing or Commercializing at least one Licensed Compound or Licensed Product.

 

(b)            At least six (6) months prior to the end of the Extended Period, the JRC shall initiate the selection and distribution of Synthesized Compounds as Retained Compounds and Released Compounds in accordance with this Section 3.2(b), which selection and distribution shall be completed by the end of the Extended Period. It is the intention of the Parties that with respect to the selection and distribution of Synthesized Compounds as Released Compounds and Retained Compounds, a Party that selects a Synthesized Compound (e.g., under Section 3.2(b)(v) below) or has a Synthesized Compound distributed to it (e.g., under Section 3.2(b)(i) or Section 3.2(b)(iii) below) that the Party is then currently Developing or that the Party states in writing to the other Party that it intends to Develop will have additional compounds that are closely related structurally to such Synthesized Compound and that may have the desirable properties of such Synthesized Compound (“Related Compounds”) designated as Retained Compounds (where such Synthesized Compound is selected or distributed to BMS as a Retained Compound) or Released Compounds (where such Synthesized Compound is selected or distributed to AMRI as a Released Compound), and such Related Compounds shall in any event at least include the Included Compounds for such

 

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Synthesized Compound. Where the Party selecting or being distributed a Synthesized Compound as a Retained Compound or a Released Compound is not then Developing or does not state in writing to the other Party that it intends to Develop such Synthesized Compound, no Related Compounds for such Synthesized Compound, including but not limited to Included Compounds for such Synthesized Compound, shall be designated as Retained Compounds or Released Compounds as a result of such Synthesized Compound being selected or distributed as a Retained Compound or a Released Compound, as the case may be. In the event the Parties are unable to agree on the Related Compounds that will be designated as Retained Compounds or Released Compounds for a Synthesized Compound that is eligible to have Related Compounds designated as Retained Compounds or Released Compounds, then such dispute shall be subject to the dispute resolution procedure of Article 17. In the case of such a dispute, the Included Compounds for that particular Synthesized Compound shall nevertheless be designated as Retained Compounds or Released Compounds, as the case may be, prior to the initiation of the dispute resolution procedure of Article 17. The procedure for selecting and distributing Synthesized Compounds as Retained Compounds and Released Compounds shall proceed in the following order:

 

(i)  All ECN Compounds shall be distributed to BMS as Retained Compounds, and all Included Compounds for each ECN Compound shall be Retained Compounds.

 

(ii)  The Related Compounds other than the Included Compounds for each ECN Compound shall be determined by the Parties and shall be Retained Compounds.

 

(iii)  All Synthesized Compounds that are not included in (i) and (ii) and that are not Amine Neurotransmitter Reuptake Inhibitor Compounds shall be distributed to AMRI as Released Compounds.

 

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(iv)  Only with respect to each Synthesized Compound that is distributed to AMRI as a Released Compound pursuant to (iii) above and that AMRI has stated in writing to BMS that AMRI intends to Develop such Synthesized Compound shall the Parties determine the Related Compounds, and the Related Compounds determined by the Parties for each such Synthesized Compound shall be Released Compounds. The Related Compounds for each such Synthesized Compound shall at a minimum include the Included Compounds for such Synthesized Compound. For the avoidance of doubt, the Related Compounds for each such Synthesized Compound may not include any ECN Compound or any Related Compound of an ECN Compound. With respect to each Synthesized Compound that is distributed to AMRI as a Released Compound pursuant to (iii) above and that AMRI does not state in writing to BMS that it intends to Develop such Synthesized Compound, there shall be no Related Compounds for each such Synthesized Compound that will become Released Compounds.

 

(v)  With respect to Synthesized Compounds that are not Retained Compounds or Released Compounds pursuant to (i) through (iv) above, BMS shall have the first right to select one such Synthesized Compound as a Retained Compound. If BMS is then currently Developing or states in writing to AMRI that it intends to Develop such selected Synthesized Compound, the Parties shall determine the Related Compounds for such selected Synthesized Compound, and such selected Synthesized Compound and its Related Compounds that are not Released Compounds shall be Retained Compounds. If BMS is not then currently Developing or does not state in writing to AMRI that it intends to Develop such selected Synthesized Compound, there shall be no Related Compounds for such selected Synthesized Compound that will become Retained Compounds. AMRI shall have the second right to select one such Synthesized Compound that is not a Retained Compound as a Released Compound. If AMRI states in writing to BMS that it intends to Develop such selected Synthesized Compound, the Parties shall determine the Related Compounds for such selected Synthesized Compound, and such selected Synthesized Compound and each of its Related Compounds that is not a

 

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Retained Compound shall be Released Compounds. If AMRI does not state in writing to BMS that it intends to Develop such selected Synthesized Compound, there shall be no Related Compounds for such selected Synthesized Compound that will become Released Compounds. Such procedure shall continue until all the Synthesized Compounds have become a Retained Compound or a Released Compound.

 

(vi) For the avoidance of doubt, the Related Compounds of Synthesized Compounds do not have to be Synthesized Compounds, and if there is any overlap between the Related Compounds of a Retained Compound that is a Synthesized Compound and the Related Compounds of a Released Compound that is a Synthesized Compound, the Party that is distributed or selects such Retained Compound or such Released Compound first under the procedure set forth in this Section 3.2(b) shall have the right to have the overlapping Related Compounds included as Retained Compounds or Released Compounds, as the case may be.

 

(c)            After the Combined Period, if a Party or an Affiliate of such Party first synthesizes a Licensed Compound that is not a Retained Compound or a Released Compound ( “Additional Compound” ) and demonstrates, in the case of BMS, that such Additional Compound has activity potentially usable for a Reserved Indication or Unrestricted Indication or, in the case of AMRI, such Additional Compound has activity potentially usable for an Unrestricted Indication, then such Additional Compound shall be a Retained Compound or a Released Compound, as the case may be. If the relevant Party states in writing to the other Party that it intends to Develop such Additional Compound, the Parties shall determine the Related Compounds for such Additional Compound, and the Related Compounds that are not Released Compounds if such Additional Compound is first synthesized and demonstrated to have activity potentially usable for a Reserved Indication or Unrestricted Indication by BMS or one of its Affiliates and that are not Retained Compounds if such Additional Compound is first synthesized by AMRI or one of its Affiliates and demonstrated to have activity

 

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potentially usable for an Unrestricted Indication shall become Retained Compounds if BMS is such Party and Released Compounds if AMRI is such Party, subject to the overlap rules of Section 3.2(b)(vi). If the relevant Party does not state in writing to the other Party that it intends to Develop such Additional Compound, there shall be no Related Compounds for such Additional Compound that will become Retained Compounds or Released Compounds, as the case may be. If a Party disputes that the other Party has met the criteria of this Section 3.2(c), then such dispute shall be subject to the dispute resolution procedure of Article 17.

 

(d)            After the Combined Period, in the event a Party selected or was distributed a Synthesized Compound as a Retained Compound or a Released Compound under Section 3.2(b)(iii), (iv) or (v) above, as the case may be, and no Related Compounds for such Synthesized Compound were determined at the time such Synthesized Compound was selected or distributed as a Retained Compound or a Released Compound, as the case may be, and such Party notifies the other Party in writing that it intends to Develop such Synthesized Compound or has begun Developing such Synthesized Compound, the Parties shall determine the Related Compounds for such Synthesized Compound, and such Related Compounds shall be Retained or Released Compounds, as the case may be, subject to the overlap rules of Section 3.2(b)(vi).

 

(e)            Once the selection process under Section 3.2(b) is completed, as of the end of the Extended Period, (i) BMS shall be the Lead Party for all AMRI Patent Rights and all BMS Licensed Patent Rights that Cover a compound that is an ECN Compound as of the end of the Extended Period or is a Retained Compound that is a Related Compound of any such ECN Compound, or a composition containing any such compound, or a method of use or manufacture of any such compound or any such composition, regardless of whether any such Patent Right also Covers any compound that is a Released Compound as of the end of the Extended Period, or a composition containing any such compound, or a method of use or

 

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manufacture of any such compound or any such composition, (ii) BMS shall be the Lead Party for all AMRI Patent Rights and all BMS Licensed Patent Rights not included in (i) above that Cover a compound that is a Retained Compound as of the end of the Extended Period, or a composition containing any such compound, or a method of use or manufacture of any such compound or any such composition and do not Cover any compound that is a Released Compound as of the end of the Extended Period, or a composition containing any such compound, or a method of use or manufacture of any such compound or any such composition, and (iii)  AMRI shall be the Lead Party for (a) all AMRI Patent Rights that are not included in (i) above and that Cover a compound that is a Released Compound as of the end of the Extended Period, or a composition containing any such compound, or a method of use or manufacture of any such compound or any such composition and do not Cover any compound that is a Retained Compound as of the end of the Extended Period, or a composition containing any such compound, or a method of use or manufacture of any such compound or any such composition, and (b) all BMS Licensed Patent Rights that are not included in (i) above, that are licensed to AMRI under Section 4.2.2 of this Agreement, and that do not Cover any compound that is a Retained Compound as of the end of the Extended Period, or a composition containing any such compound, or a method of use or manufacture of any such compound or any such composition.

 

(f)             With respect to any AMRI Patent Right or BMS Licensed Patent Right for which there is no Lead Party pursuant to Section 3.2(e), the first Party to initiate dosing of a patient in a Phase IIb Clinical Trial of a Released Product (in the case of AMRI) or a Retained Product (in the case of BMS) that is Covered, or the manufacture or use of which is Covered, by such Patent Right or that contains a Released Compound (in the case of AMRI) or a Retained Compound (in the case of BMS) that is Covered, or the manufacture or use of which is Covered, by such Patent Right, shall be the Lead Party for such Patent Right as of such dosing date.

 

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(g)            With respect to any AMRI Patent Right or BMS Licensed Patent Right for which there is no Lead Party pursuant to Section 3.2(e) or Section 3.2(f) at the time a Party becomes aware of a suspected infringement of such Patent Right, such Party shall notify the other Party of such suspected infringement and the Parties will consult and confer with one another and decide whether an infringement Action should be brought under such Patent Right and which Party should control any such Action that is brought. Neither Party shall have the right to prevent the other Party from initiating an infringement Action if the Parties do not reach agreement pursuant to this Section 3.2(g).

 

(h)            With respect to any Patent Right of a Third Party licensed to AMRI or BMS and sublicensed to the other Party pursuant to Section 3.7 or 4.3, if either Party becomes aware of a suspected infringement of such Patent Right, such Party shall notify the other Party of such suspected infringement and the Parties will consult and confer with one another and decide whether an infringement Action should be brought under such Patent Right. If the Parties decide that an infringement Action should be brought under such Patent Right, to the extent that only one of the Parties is permitted by such Third Party to bring such Action, such Party shall bring and control such Action, to the extent that either Party is permitted by such Third Party to bring such Action, the Parties will decide which Party will bring and control such Action, and to the extent that neither Party is permitted by such Third Party to bring such Action, such Third Party will be requested to bring such Action pursuant to the terms of the license agreement between such Third Party and the Party licensed by such Third Party. The right to bring and pursue such an Action shall be controlled by the applicable license agreement with such Third Party.

 

3.3            AMRI Covenants Regarding Licensed Compounds. During the Combined Period, AMRI and its Affiliates will not Develop and/or Commercialize themselves, or license any AMRI

 

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Technology to a Third Party to Develop and/or Commercialize, or collaborate with a Third Party to Develop and/or Commercialize, any Licensed Compound and/or any Licensed Product in the Territory, for any use in the Field. During the Combined Period, AMRI and its Affiliates will not outside of this Agreement (i) research, discover, identify, Develop, make, have made, use, export, import, offer to sell, sell and/or Commercialize themselves, or for or on behalf of or in collaboration with a Third Party any Amine Neurotransmitter Reuptake-Inhibitor that is or has been identified as an Amine Neurotransmitter Reuptake-Inhibitor through a Primary Screening Program and/or (ii) license any AMRI Technology to any Third Party to research, discover, identify, Develop, make, have made, use, export, import, offer to sell, sell and/or Commercialize any Amine Neurotransmitter Reuptake-Inhibitor that is or has been identified as an Amine Neurotransmitter Reuptake-Inhibitor through a Primary Screening Program. Nothing in this Section 3.3 shall be construed to limit AMRI’s fee for services business, provided that AMRI does not knowingly employ itself, or share with a Third Party, AMRI Technology, for the purpose of, researching, discovering, identifying, making, using, exporting, importing, Developing, offering to sell, selling and/or Commercializing any Amine Neurotransmitter Reuptake Inhibitor.

 

3.4            Documentation . During the ninety (90) day period following the Effective Date, AMRI shall provide BMS as soon as reasonably possible with one (1) electronic or paper copy of all material documents, data or other information Controlled by AMRI or any of its Affiliates as of the Effective Date to the extent that such documents, data and information contain or comprise AMRI Know-How licensed under Article 3. AMRI shall be responsible for the cost of providing to BMS one (1) set of copies only.

 

3.5            Technical Assistance . Without charge to BMS, during the three (3) month period following the Effective Date, AMRI shall reasonably cooperate with BMS to assist BMS with understanding and using the AMRI Know-How provided to BMS under Section 3.4. Such cooperation shall include, without limitation, providing BMS with reasonable access by

 

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teleconference or in-person at AMRI’s facilities (subject to AMRI’s customary rules and restrictions with respect to site visits by non-AMRI personnel) to AMRI personnel directly involved in the research, discovery, identification and Development of Licensed Compounds and Licensed Products to provide technical assistance and consultation in connection with the AMRI Know-How transferred under Section 3.4.

 

3.6            BMS agrees that BMS will not use AMRI Technology, except with respect to Licensed Compounds and Licensed Products during the Combined Period and thereafter only with respect to Retained Compounds and Retained Products as to which BMS is licensed under this Agreement and with respect to the synthesis and testing of Licensed Compounds that are not Retained Compounds in order to identify Licensed Compounds that BMS may want to select as Retained Compounds under Section 3.2(c). Except as provided in Article 13, AMRI agrees that AMRI will only use BMS Technology during the Research Term as permitted under Section 4.1, will not use BMS Technology during the Extended Period except as expressly permitted in a separate agreement, such as an agreement to provide clinical supplies of a Licensed Product, and will only use BMS Technology after the Extended Period as permitted under Section 4.2.2 with respect to Released Compounds and Released Products and with respect to the synthesis and testing of Licensed Compounds that are not Released Compounds in order to identify Licensed Compounds that AMRI may want to select as Released Compounds under Section 3.2(c).

 

3.7            In the event that prior to the end of the Combined Period, AMRI is licensed under AMRI Third Party Rights that are useful for the research, discovery, identification, Development, manufacture, use, exportation, importation, offer for sale and/or Commercialization of any Licensed Compound and/or Licensed Product and AMRI has the right to grant a sublicense to BMS, AMRI shall promptly notify BMS after obtaining any such AMRI Third Party Rights, and then at the request of BMS during or after the Combined Period, AMRI shall grant to BMS such a sublicense to the fullest extent permitted under the license under which the

 

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sublicense is granted and subject to the terms, conditions and requirements thereof to research, discover, identify, Develop, manufacture, use, export, import, offer for sale and/or Commercialize Licensed Compounds and Licensed Products to the same extent and subject to the same restrictions as set forth in Section 3.1(a) to (e). Such sublicense shall be granted by an amendment to this Agreement, and without additional consideration to AMRI and provided that BMS agrees to pay any and all amounts due to such Third Party as a direct result of the granting of the sublicense and any other payments (royalties, milestones, etc.) due thereunder as a direct result of BMS being a sublicensee and/or its activities as a sublicensee, which payments shall not be creditable against any royalties and/or payments due to AMRI under this Agreement.

 

3.8            During the Combined Period, AMRI and its Affiliates will not conduct any screening program specifically directed to identifying compounds as Amine Neurotransmitter Reuptake-Inhibitor Compounds that are not Licensed Compounds (and for the avoidance of doubt, such excluded screening program is limited to a screening program that uses equilibrium binding assays for at least two of the three biogenic amine transporters, norepinephrine, serotonin and dopamine, as primary screens to identify compounds as Amine Neurotransmitter Reuptake Inhibitor Compounds (i.e., the purpose of the screens is to identify compounds whose intended activity is that of an Amine Neurotransmitter Reuptake Inhibitor Compound)) (a “ Primary Screening Program ”) themselves, or for or on behalf of or in collaboration with a Third Party.

 

4.              GRANT OF LICENSES BY BMS TO AMRI

 

4.1            Grant to AMRI During the Research Program. Subject to the terms and conditions of this Agreement, BMS hereby grants to AMRI a limited, non-exclusive license in the Territory, without the right to sublicense, under BMS Technology solely to the extent necessary for AMRI to perform AMRI’s obligations under the Research Program.

 

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4.2            Grant to AMRI for Released Compounds.

 

4.2.1         The Unrestricted Indications . At the end of the Extended Period, if there is only one ECN Compound that is still under Development or being Commercialized by BMS as of such date, BMS may notify AMRI of * Indications for which BMS may want to Develop or Commercialize such ECN Compound, and if there is more than one such ECN Compound as of such date, BMS may notify AMRI for each such ECN Compound of * Indications for which BMS may want to Develop or Commercialize each such ECN Compound, and if there is no such ECN Compound as of such date but BMS has an active discovery program for at least one Licensed Compound as of such date, BMS may notify AMRI of * Indications for which BMS may want to Develop such Licensed Compound. For the avoidance of doubt, an ECN Compound that is a back-up for a Lead Product and for which milestones are not to be paid under Section 10.4, shall not be counted as an ECN Compound for determining the number of Reserved Indications to which BMS is entitled. For example, if there are * ECN Compounds at the end of the Extended Period that are still under Development or being Commercialized by BMS as of such date, BMS may notify AMRI of * Indications (i.e., * Indications per ECN Compound). All such Indications for which AMRI receives such written notification shall collectively be called the “Reserved Indications.”   The “Unrestricted Indications” shall be all Indications other than the Reserved Indications. After the end of the Combined Period, BMS, by written notice to AMRI, may, with respect to an ECN Compound, change an existing Reserved Indication(s) therefor to an existing Reserved Indication(s) for another ECN Compound as long as an ECN Compound does not have more than * Reserved Indications when there is only one ECN Compound and each ECN Compound does not have more than * Reserved Indications when there is more than one ECN Compound.

 

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4.2.2                         License Grant in the Unrestricted Field . After the end of the Extended Period, subject to the terms, conditions and limitations of this Agreement, BMS agrees to grant and hereby grants to AMRI (i) a royalty-free, exclusive license (with the right to sublicense as permitted by and consistent with this Agreement,) in the Territory under that BMS Technology that is reasonably required by AMRI to research, make, have made, use, sell, Develop and/or Commercialize one or more Released Compounds and/or Released Products for one or more Unrestricted Indications, to research, Develop, make, have made, use, sell, offer to sell, export, import and Commercialize the Released Compounds and Released Products for the Unrestricted Indications and (ii) a non-exclusive, royalty-free license (with no right to sublicense) in the Territory to synthesize and test Licensed Compounds that are not Retained Compounds in order to identify Licensed Compounds that AMRI may want to select as Released Compounds under Section 3.2(c) under that BMS Technology that is reasonably required by AMRI to so synthesize and test such Licensed Compounds. Any sublicense shall be subject to the terms and conditions of Article 9,  Sections 3.1(d) and 3.2(c)-(h), the second sentence of Section 3.6, and Section 3.8 of this Agreement and AMRI shall be liable for any breach of Article 9, the second sentence of Section 3.6, or Section 3.8 of this Agreement by a sublicensee. For the avoidance of doubt, AMRI shall have no right to Develop or Commercialize any Released Compound or Released Product outside the Unrestricted Indications, and BMS shall have no right to Develop or Commercialize any Released Compounds or Released Products for any Indication, and BMS shall have the right to Develop and Commercialize any Retained Compound and any Retained Product for any Indication. For the further avoidance of doubt, nothing in this Section 4.2.2 or this Agreement shall be construed as a right or license to (a) any Know-How or Patent Right that is Controlled by BMS or any Affiliate of BMS that may be useful but is not reasonably required by AMRI to

 

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research, make, have made, use, sell, offer to sell, export, import, Develop and/or Commercialize Released Compounds and/or Released Products for the Unrestricted Indications or reasonably required by AMRI to synthesize and test Licensed Compounds that are not Retained Compounds in order to identify Licensed Compounds that AMRI may want to select as Released Compounds under Section 3.2(c), (b) any compound that is not a Licensed Compound, including but not limited to any such compound that is not a Licensed Compound that now is or in the future is under Development or being Commercialized by BMS or any of its Affiliates or any of their licensees or that is contained in a product that now is or in the future is under Development or being Commercialized by BMS or any of its Affiliates or any of their licensees, or (c) any Know-How or Patent Right Controlled by BMS or any Affiliate of BMS relating to any such compound covered by (b) that is not a Licensed Compound or any product containing any such compound covered by (b) that is not a Licensed Compound. In the event that AMRI wants to license the Development and/or Commercialization of any Released Compound and/or a Released Product for the Unrestricted Indications to a Third Party, BMS shall have a right of first refusal for such Released Compound and/or Released Product as set forth in Article 5.

 

4.3                                  In the event that prior to the end of the Combined Period, BMS is licensed under Patent Rights and/or Know How of a Third Party that are reasonably required by AMRI for the research,  Development, manufacture, use, exportation, importation, offer for sale and/or Commercialization of any Released Compound, and/or Released Product ( “BMS Third Party Rights”) and BMS has the right to grant a sublicense thereunder to AMRI, BMS shall promptly notify AMRI after obtaining any such BMS Third Party Rights, and then at the request of AMRI during or after the Combined Period, BMS shall grant to AMRI such a sublicense to the fullest extent permitted under the license under which the sublicense is granted and subject to the terms, conditions and requirements thereof to research, Develop, manufacture, have manufactured, use, export, import, offer for sale, sell and/or

 

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Commercialize Released Compounds, and Released Products for the Unrestricted Indications to the same extent and subject to the same restrictions as set forth in Section 4.2.2. Such sublicense shall be granted by an amendment to this Agreement, and without additional consideration to BMS and provided that AMRI agrees to pay any and all amounts due to such Third Party as a direct result of the granting of the sublicense and any other payments (royalties, milestones, etc.) due thereunder as a direct result of AMRI being a sublicensee and/or its activities as a sublicensee.

 

4.4                               During the Combined Period, BMS and its Affiliates will not conduct any Primary Screening Program with respect to any compound that is not a Licensed Compound themselves or on behalf of or in collaboration with a Third Party. During the Combined Period, BMS and its Affiliates will also not conduct any Development and/or Commercialization activities themselves, or for or on behalf of or in collaboration with a Third Party, relating to any Amine Neurotransmitter Reuptake-Inhibitor Compounds that are or have been identified as Amine Neurotransmitter Reuptake-Inhibitor Compounds through a Primary Screening Program and that are not Licensed Compounds.

 

4.5                                  Notwithstanding any provision of this Agreement to the contrary, after the Combined Period, AMRI and its Affiliates shall have the right and license under the AMRI Technology and the BMS Technology to make, have made, import and use all Licensed Compounds for internal research purposes, and such internal research purposes shall include the generation of derivatives and analogs of Licensed Compounds.

 

5.                                       BMS RIGHT OF FIRST REFUSAL

 

5.1                                  BMS Right of First Refusal . BMS shall have a right of first refusal with respect to Released Compounds and Released Products as follows.

 

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5.1.1                         In the event that AMRI desires at any time to enter into a License arrangement with respect to a Released Compound and/or a Released Product, before entering into an agreement with any Third Party with respect to such License, AMRI will notify BMS in writing of its desire, including information as to the scope and type of License and the Released Compounds and Released Products that are to be part of such License and a comprehensive, confidential package of information with respect thereto that is in the possession of AMRI (a “License Notice” ). During the thirty (30) day period after AMRI so notifies BMS, AMRI shall promptly provide BMS with any additional information in the possession of AMRI that BMS reasonably requests from AMRI relating to the Released Compounds and Released Products that will be the subject of such License.  If BMS notifies AMRI in writing of its election to pursue a License for such Released Compound(s) and/or Released Product(s) within * (*) days after BMS’ receipt of such License Notice, AMRI and BMS shall enter into good faith negotiations with respect to such License for a period of * (*) days following AMRI’s receipt of such election from BMS (the “Negotiation Period” ). During the Negotiation Period, AMRI will provide BMS with an opportunity to make a proposal of terms and conditions with respect to such License and AMRI will either accept the proposal, refuse the proposal or provide a counter offer to BMS. During the Negotiation Period, each Party may revise the terms and conditions of its proposal to the other Party and the last such term sheet that BMS delivers to AMRI shall be deemed the term sheet that BMS delivers to AMRI for purposes of Section 5.2 below. Such * day Negotiation Period shall be extended by an additional * (*) days if AMRI and BMS reach agreement in principle with respect to a term sheet with respect to such License during such * day Negotiation Period.

 

5.1.2                         If AMRI and BMS do not conclude an agreement or an agreement in principle with respect to such License during the * day Negotiation Period or an agreement in the * (*) day extended period, AMRI will then be free to enter into an agreement

 

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with any Third Party regarding such a License for such Released Compound(s) and/or Released Product(s)  that were the subject of the License Notice delivered to BMS under Section 5.1.1, and free to enter into any such License, subject to the provisions set forth in Section 5.2 and provided that such License has the same territory, the same scope of Released Compound(s) and/or Released Product(s), the same scope of Indications, and the same field of use as offered to BMS in the License Notice delivered to BMS under Section 5.1.1.

 

5.2                                  To the extent that BMS’ rights under this Article 5 have not terminated or expired, AMRI shall not enter into any agreement with any Third Party with respect to a License under terms and conditions which are Less Favorable to AMRI than the terms and conditions set forth in the term sheet last offered by BMS to AMRI, unless BMS is unwilling to enter into a license agreement for the Less Favorable to AMRI terms. AMRI shall have the option, exercisable in its sole discretion, of having an Independent Evaluator render a decision binding upon AMRI and BMS as to whether a Third Party Term Sheet is Less Favorable to AMRI than the terms and conditions set forth in the term sheet last offered by BMS to AMRI.

 

5.2.1                         If AMRI intends to enter into a License agreement with a Third Party and wants to exercise its option to have an Independent Evaluator determine whether the Third Party Term Sheet with such Third Party is Less Favorable to AMRI than the terms and conditions set forth in the term sheet last offered by BMS to AMRI, AMRI shall so notify BMS and this Section 5.2.1 and Sections 5.2.2, 5.2.3 and 5.2.4 shall apply. AMRI shall bear the costs of engaging the Independent Evaluator. AMRI shall provide the Independent Evaluator with a copy of the Third Party Term Sheet with such Third Party, without revealing the identity of such Third Party, and shall also provide the Independent Evaluator with a copy of the last term sheet offered by BMS to AMRI.

 

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5.2.2                         The Independent Evaluator shall promptly make a determination of whether the terms and conditions of the Third Party Term Sheet are Less Favorable to AMRI than the terms and conditions of the last term sheet offered by BMS to AMRI in accordance with Section 5.4.1 below. The Independent Evaluator shall be required to make a definite determination based on the information provided to it as to whether or not the Third Party Term Sheet is Less Favorable to AMRI than the last term sheet offered by BMS to AMRI. The Independent Evaluator shall not have the authority to render any other determination or to respond without a decision, and the Parties agree (i) that the Independent Evaluator shall have no liability in any way by reason of its decision, and (ii) to be bound by and not to challenge such determination, except in the case where a Party alleges that the Independent Evaluator did not act in good faith, breached a fiduciary duty or engaged in willful misconduct.

 

5.2.3                         If the Independent Evaluator determines that the Third Party Term Sheet was not Less Favorable to AMRI than the last Term Sheet offered by BMS to AMRI, AMRI will be free to enter into an agreement with such Third Party having the terms and conditions set forth in the Third Party Term Sheet (or terms and conditions more favorable to AMRI than the terms and conditions set forth in the Third Party Term Sheet) and such other terms and conditions as AMRI and the Third Party agree, provided however , that AMRI shall not have the right to enter into an agreement with respect to such License with a Third Party having terms and conditions that are Less Favorable to AMRI than the terms and conditions set forth in the Third Party Term Sheet presented to the Independent Evaluator.

 

5.2.4                         If the Independent Evaluator determines that the terms and conditions set forth in the Third Party Term Sheet are Less Favorable to AMRI than the terms and conditions last offered by BMS to AMRI, AMRI may at its discretion continue its negotiation with the Third Party, with the objective of obtaining financial terms and conditions

 

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that are not Less Favorable to AMRI than the financial terms and conditions last offered by BMS to AMRI. Alternatively, AMRI may offer such financial terms and conditions set out in the Third Party Term Sheet to BMS (or AMRI may offer BMS terms and conditions financially less favorable to AMRI than those set out in the Third Party Term Sheet). In the event that AMRI makes such offer to BMS, AMRI shall also offer to BMS the same terms with respect to governance and decision-making as set out in the Third Party Term Sheet (or otherwise proposed by AMRI to the Third Party). If AMRI offers such terms and conditions for a License to BMS in accordance with this Section 5.2.4, BMS will have an additional fifteen (15) business days to provide AMRI with notice that BMS desires to enter into an agreement with AMRI on substantially the same financial terms and conditions as set out in such term sheet (an “Acceptance Notice”). If an Acceptance Notice is provided by BMS, the Parties will work diligently to expeditiously complete such an agreement. If an Acceptance Notice is not provided by BMS within such fifteen (15) business day period, or if AMRI and BMS do not execute a binding License agreement within ninety (90) days after receipt of the Acceptance Notice, AMRI will be free to enter into an agreement with such Third Party having the terms and conditions not financially Less Favorable to AMRI than those set forth in the Third Party Term Sheet. Such ninety (90) day period shall be extended for the period of any delays in completing the License agreement caused by reasons beyond the reasonable control of BMS.

 

5.3                                  Any License agreement entered into by AMRI in accordance with Section 5.2 shall be consistent with the terms and conditions of this Agreement and shall fully enable AMRI to fully perform all of its obligations under this Agreement which will continue in effect.

 

5.4                                  Certain Definitions . For the purposes of this Article 5, the following capitalized terms shall have the following meanings:

 

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5.4.1                         “ Less Favorable to AMRI ” means, with respect to a Third Party Term Sheet compared to the most recent term sheet offered by BMS to AMRI, that the Third Party Term Sheet contains financial terms which, taken as a whole, are materially less favorable to AMRI than financial terms set forth in the last term sheet for a License offered to AMRI by BMS.  The determination as to whether the financial terms are materially less favorable to AMRI than the financial terms set forth in the last term sheet for a License offered to AMRI by BMS shall be based upon the present value of the total payments, adjusting for the risk of pharmaceutical compound development (i.e., risk adjusted net present value (NPV) analysis), with the same assumptions applied in the same manner to both the Third Party Term Sheet and the last term sheet offered to AMRI by BMS. In such evaluation, payments of equity shall be given less value than corresponding payments in cash. The assumed probability of Approval for the risk assessment shall be based on industry standards for compounds at the same stage of development.

 

5.4.2                         “ Third Party Term Sheet ” means a term sheet summarizing the key terms and conditions on which AMRI would be willing to enter into a potential License arrangement with a Third Party, and such a Third Party term sheet shall contain a level of detail comparable to the term sheet last provided by BMS under Section 5.1.1.

 

5.4.3                             “ Independent Evaluator ” means an individual with relevant expertise in the Commercialization of pharmaceutical products employed by an independent certified public accounting firm or investment bank of nationally recognized standing that,  at the time of the evaluation set forth in Section 5.2 is not providing, and during the twelve (12) months prior to such evaluation has not provided, auditing or consulting services to either Party, and that is selected by AMRI and reasonably acceptable to BMS, or such other qualified person as the Parties may mutually agree to.

 

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6.                                       OUTSOURCING

 

6.1                                  Subcontracting . Except for those activities for which AMRI is responsible for performing for the Research Program, and subject to Section 6.2, the JRC or BMS may perform any activities in support of the research, discovery, identification, Development, exportation, importation, manufacture, offering for sale or Commercialization of Licensed Compounds and Licensed Products through subcontracting to a Third Party contractor or contract service organization.

 

6.2                                  AMRI Option . AMRI shall have a first option to be the supplier of any outsourcing of chemistry research by the JRC or BMS that is not included in the chemistry research to be carried out by AMRI pursuant to the Research Plan and that directly relates to the Research Program or directly relates to the Development of Licensed Compounds, including new chemical synthesis, and analytical development. (For the avoidance of doubt, this option shall not apply to the outsourcing of chemistry process development, the manufacture of any API or the manufacture of any clinical or commercial supplies of any Licensed Products, and such outsourcing is dealt with below in Sections 6.3, 6.4 and 6.5.)  In the event the JRC or BMS wants to outsource any such chemistry research, it shall notify AMRI in writing that it wants to do so (such notice the “Chemistry Outsourcing Notice” ). If AMRI is both willing and able to provide such chemistry research at the then current FTE Rate, AMRI shall so notify the JRC or BMS within ten (10) business days of the receipt of the Chemistry Outsourcing Notice, whereupon the JRC or BMS will not outsource such chemistry research to a Third Party and will outsource such chemistry research to AMRI. If, however, AMRI fails to notify the JRC or BMS within (10) business days of the receipt of the Chemistry Outsourcing Notice that AMRI is both willing and able to provi