EXHIBIT 10.8
LICENSE AGREEMENT
between
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Germany
- hereinafter referred to as "Bayer" -
and
Memory Pharmaceuticals Corporation
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
- hereinafter referred to as "Memory" -
RECITALS
1. Bayer has disclosed and transferred to Memory confidential information and
a sample of Bayer's compound Bay z 4406 under the provisions of a Secrecy
Agreement dated August 6, 1998, as extended by Agreement dated July 2,
1999 (the "Secrecy Agreement"), and a Confidentiality and Non-Use
Agreement dated July 6, 1999 as extended by Agreement dated June 30, 2000,
and as modified by an Agreement dated May 23, 2000 (the "Confidentiality
Agreement").
2. Memory has evaluated such Bayer compound, the patent rights and know how
related thereto, and has been granted by Bayer an exclusive evaluation
period under an Agreement dated May 23, 2000, amended by a Letter
Agreement dated November 21, 2000.
3. Memory has informed Bayer in writing that it elects to acquire an
exclusive license from Bayer pursuant to the provisions of the Agreement
of May 23, 2000 and its amendment of November 21, 2000.
Now, therefore, in consideration of the mutual set forth in this License
Agreement, the parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below:
1.1. "Additional Component" shall mean a component which is diagnostically
useable or therapeutically active alone or in a combination which does not
require Compound, and such component does not contain Compound.
1.2. "Affiliate" shall mean a corporation or other legal entity that controls,
is controlled by, or is under common control with such party. For purposes
of this definition, "control means the ownership, directly or indirectly,
of more than fifty percent (50%) of the outstanding equity securities of a
[*] CONFIDENTIAL TREATMENT IS REQUESTED
corporation which are entitled to vote in the election of directors or a
more than fifty percent (50%) interest in the net assets or profits of an
entity which is not a corporation.
1.3. "Combination Product(s)" shall mean a Finished Product that includes the
Compound and at least one Additional Component.
1.4. "Compound" shall mean the Bayer compound having the code no. Bay z 4406,
which is (+)-3-isopropyl 5-(2-methoxyethyl)
4-(2-chloro-3-cyanophenyl)-2,6-dimethyl-1,4-dihydro-3,
5-pyridinedicarboxylate.
1.5. "Distributor" shall mean any business entity which has the right to
distribute Finished Products within a country.
1.6. "Finished Product" shall mean any and all pharmaceutical preparations
which are in a form ready for use by an end user without further
formulation, processing or chemical transformation, which contain
Compound.
1.7. "Field" shall mean the treatment of human peripheral and central nervous
system related disorders.
1.8. "First Commercial Sale" shall mean the initial transfer of a Finished
Product for value and not for demonstration, testing or promotional
purposes.
1.9. "Know How" shall mean any and all manufacturing information, technical
information, testing and analytic methods, results, data and
specifications or know-how which Bayer owns or has rights to include in
the license grant in Article 2 hereof pertaining to Compound, Finished
Product and Field.
1.10. "IND" shall mean the application for an Investigative New Drug in the
United States or a foreign equivalent thereof.
1.11. "Listed Country" shall mean the United States of America, Japan, Germany,
France, Italy, United Kingdom, Canada, Mexico, Spain, The Netherlands,
Belgium or Luxembourg.
1.12. "Major Country" shall mean the United States of America, Japan, Germany,
France, Italy or the United Kingdom.
1.13. "NDA" shall mean a New Drug Application in the United States to obtain an
approval to market and sell Finished Product, or a foreign equivalent
thereof.
1.14. "Net Sales" shall mean the total gross sales (number of units shipped
times the invoiced price per unit) of Finished Product, or, if applicable,
Combination Product sold by Memory and/or a Sublicensee and/or a
Distributor to Third Parties less certain deductions explained below, but
only to the extent that such deductions are borne by Memory and/or a
Sublicensee and not separately invoiced, and are related to Finished
Product sold under the terms of this Agreement:
a) Allowances actually granted to Third Party customers such as
ordinary and customary trade discounts, quantity discounts, cash
discounts, rebates (including rebates to social and welfare
systems), and sales commissions but together not more than [*]% of
gross sales. Notwithstanding the foregoing, in the event that the
requested allowances are
[*] CONFIDENTIAL TREATMENT IS REQUESTED
higher than [*]% of the gross sales in an individual country, Memory
shall be entitled to deduct from the gross sales more than [*]%, if
Memory produces evidence and informs Bayer respectively in writing
that the sum of the deductions as set forth herein before is more
than [*] %; provided, however, that such allowances are granted in
the ordinary course of business and consistent with the business
practices in the pharmaceutical industry.
b) Government mandated rebates.
c) Taxes and governmental charges, other than income tax. This
deduction includes import duties, excise taxes, tariffs, use taxes,
etc., which are imposed on Finished Product and borne by the seller
of Finished Product.
d) Credits and/or allowances actually given for rejection, return or
recall of previously sold Finished Product, but not in excess of the
original selling price of the Finished Product rejected, returned or
recalled.
e) Outbound transportation and delivery charges (including insurance
premiums related to transportation and delivery) prepaid or allowed.
Notwithstanding anything herein to the contrary, the following shall not
be considered a sale of a Finished Product, or, if applicable, Combination
Product under this Agreement: (i) the transfer of a Finished Product, or,
if applicable, Combination Product to a Sublicensee or a Distributor for
sale by the Sublicensee or the Distributor in a transaction that will be
royalty bearing, regardless of whether there is an internal transfer price
associated with the transfer; or (ii) the transfer of a Finished Product,
or, if applicable, Combination Product to a Third Party, an Affiliate of
Memory or a Sublicensee without consideration or for nominal consideration
to Memory and/or the Sublicensee in connection with the development or
testing of a Finished Product. For purposes of clarification, in the event
of any Net Sales generated by Memory directly via an unaffiliated
wholesaler of Finished Product or, if applicable, Combination Product and
not through a Sublicensee, "Net Sales" shall mean, and royalties shall be
calculated based upon, the Net Sales of Memory to the wholesalers and not
the sales of Finished Product or, if applicable, Combination Product by
the wholesaler to its customers.
1.15. "Patent Rights" shall mean (a) Bayer's patents and patent applications as
specified in Annex A which is an integral part of this Agreement,
including any patents issuing from such patent applications; (b) any
divisional applications, continuation applications, continuation in part
applications or substitutes, reissues, reexaminations, renewals or the
like related to the patents and patent applications listed in Annex A; (c)
claims of continuation in part applications and patent applications, and
patents issued therefrom, to the extent the claims are directed to the
subject matter specifically described in the patent rights described in
(a) and (b) above and (d) below; and (d) all patent rights referred to in
Art. 2.3 below.
1.16. "Royalty Period" shall mean the calendar quarter, or partial calendar
quarter, commencing with the First Commercial Sale of any Licensed
Product, and each calendar quarter thereafter until the obligation to pay
royalties expires.
1.17. "Sublicensee" shall mean a Memory Affiliate or a Third Party; provided
that such Affiliate or Third Party has received certain sublicense rights
from Memory as set forth in Art. 2.6.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
1.18. "Third Party" shall mean any third party except Memory, a Memory
Affiliate, Bayer or a Bayer Affiliate.
ARTICLE 2 - GRANT OF RIGHTS
2.1. Subject to the terms and conditions set forth herein, Bayer hereby grants
Memory a world-wide, exclusive, royalty-bearing non-transferable license
under Patent Rights and Know How to manufacture, have manufactured, use
and/or have used Compound in order to manufacture, have manufactured, use,
offer for sale, have sold, import, export, register and/or market Finished
Products within the Field.
2.2. Memory acknowledges that its rights under Patent Rights are limited to
those expressly granted herein, and that Memory is expressly prohibited
from selling, transferring or otherwise making available to Third Parties
Compound and/or Finished Products for use outside the Field.
2.3. As far as Bayer owns or controls, at any time, patent rights not mentioned
in Annex A, which claim Compound and/or its use in the Field, those patent
rights shall be regarded as Patent Rights provided that manufacture sale
or use of the Finished Product in the Field would infringe or violate
those patent rights. The patent rights under this Art. 2.3 shall however
not include any patent or patent application of Bayer claiming specific
formulations possibly useful for Compound.
2.4. Except as otherwise provided herein, the right, title and interest in the
Patent Rights are affected by the license pursuant to Art. 2.1 only to the
extent as such Patent Rights are claiming Compound and its use within the
Field.
2.5. Bayer hereby grants to Memory an option to acquire a non-exclusive,
world-wide, non-transferable license pursuant to the terms set forth in
this Agreement (i) under Bayer's rights belonging to the patent families
of US-5,707,655 and/or US-5,900,425 in relation to controlled release
formulations disclosed in such patent families and developed by Bayer for
its Nimodipin(R) product, and, if applicable, (ii) under corresponding
Bayer know-how; provided, however, that Memory may exercise such option
and use such rights only for the manufacture, sale and use of Finished
Products within the Field. No additional consideration shall be payable by
Memory to Bayer upon exercise of such option. The option granted to Memory
under this Art. 2.5 will automatically expire, if Memory does not exercise
this option in writing before the end of the first clinical phase II
trials during the development of the Finished Product in the Field.
2.6. Memory shall have the right to grant sublicenses under the licenses and
rights granted by Bayer to Memory under this Art. 2; provided, however,
that Memory shall continue to be responsible for all obligations of Memory
set forth in this License Agreement.
ARTICLE 3 - DEVELOPMENT AND MARKETING
3.1. In consideration of the rights granted to Memory under this Agreement,
Memory shall use commercially reasonable efforts (i) to develop (through
research, development, marketing and/or sublicensing activities, either
alone or in collaboration with Third Parties) Finished
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Products, and (ii) to register and market (either alone and/or in
collaboration with Third Parties) Finished Products in the United States,
Japan and in four countries of the European Union which Memory shall
select from the group consisting of Germany, France, United Kingdom, Italy
and Spain.
3.2. Neither Bayer nor a Bayer Affiliate shall have any obligation to provide
Memory, a Memory Affiliate and/or a Sublicensee with any service or
assistance as to (i) the non-clinical and clinical development of Compound
and Finished Products, and (ii) the registration and marketing of Finished
Products. Memory is solely responsible, and is hereby authorized by Bayer
to contact a Third Party contractor in order to establish an ongoing
supply of Compound which Memory needs for the non-clinical and clinical
development of Finished Products as well as for marketing purposes. Bayer
does not have any obligation to supply Memory with Compound.
ARTICLE 4 - PAYMENTS, RECORDS AND REPORTS
4.1. In further consideration of the rights granted to Memory under this
Agreement, Memory shall make the following payments to Bayer:
(i) 0.25 Mio US $ (two hundred fifty thousand U.S. Dollars) within 30
(thirty) days following the effective date of this Agreement;
(ii) 0.75 Mio US $ (seven hundred fifty thousand U.S. Dollars) within 30
(thirty) days following the first IND approval;
(iii) [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following the
[*];
(iv) [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following the
[*];
(v) [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following the
[*]; provided that, if the [*], then this payment shall be due on
the date that is the earlier of (a) 6 (six) months from the date of
such [*], or (b) thirty (30) days following the [*]. If the payment
described in this paragraph is made pursuant to (a) of this
paragraph, then such payment shall bear interest from the date that
is thirty (30) days following the [*] through the date of actual
payment. Such interest shall be calculated based on the three (3)
month LIBOR rate in effect on the business day immediately preceding
the start of such thirty (30) day period, as reported in the Wall
Street Journal.
(vi) [*] US $ ([*] U.S. Dollars) within 60 (sixty) days following the
[*]; provided that, if the [*], then this payment shall be due on
the date that is the earlier of (a) 6 (six) months from the date of
such [*], or (b) sixty (60) days following the [*]. If the payment
described in this paragraph is made pursuant to (a) of this
paragraph, then such payment shall bear interest from the date that
is sixty (60) days following the [*] through the date of actual
payment. Such interests shall be calculated based on the three (3)
month LIBOR rate in effect on the business day immediately preceding
the start of such sixty (60) day period, as reported in the Wall
Street Journal.
(vii) a [*]% ([*] percent) royalty on the worldwide Net Sales proceeds
received by Memory's Sublicensees, irrespective of the royalty
rate(s) actually to be paid by Sublicensee(s) to Memory, if any;
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(viii) in the event that the worldwide royalties received by Memory from
any of its Sublicensee(s) exceeds [*]% ([*] percent), then Memory
will pay to Bayer an additional royalty of [*]% ([*] percent) of
such amounts in excess of [*]% ([*] percent) [example: if royalties
received from a Sublicensee are 12%, royalties to be paid to Bayer
would be [*]% plus [*]% of the next [*]% ([*]%), resulting in a
total royalty rate of [*]%].
4.2. In the event that Memory shall generate in any calendar year Net Sales of
Finished Product directly or via a Distributor and not through a
Sublicensee, Memory shall, in addition to the payments specified under
Art. 4.1, pay to Bayer royalties based on such annual Net Sales as
follows:
- a [*] % ([*] percent) royalty on the worldwide Net Sales during such
calendar year generated by Memory, if such Net Sales do not exceed
[*] US $ ([*] US Dollars);
- a [*]% ([*] percent) royalty on the entire worldwide Net Sales
generated during such calendar year by Memory, if such Net Sales lie
in a range from more than [*] US $ ([*] US Dollars) to [*] US $ ([*]
US Dollars);
- a [*] % ([*] percent) royalty on the entire worldwide Net Sales
generated during such calendar year by Memory, if such Net Sales lie
in a range from more than [*] US $ ([*] US Dollars) to [*] US $ ([*]
US Dollars);
- a [*] % ([*] percent) royalty on the entire worldwide Net Sales
generated during such calendar year by Memory, if such Net Sales lie
in a range from more than [*] US $ ([*] US Dollars) to [*] US $ ([*]
US Dollars); or
- a [*] % ([*] percent) royalty on the entire worldwide Net Sales
generated by Memory, if such Net Sales exceed [*] US $ ([*] US
Dollars).
4.3. Notwithstanding any other provision herein, in the event that Bayer does
not have any Patent Rights affording patent protection relating to the
manufacture, sale and use of Compound in a Listed Country, the royalties
payable by Memory to Bayer with respect to Net Sales in such Listed
Country shall be as follows:
(i) if Memory generates any Net Sales directly or via a Distributor in
one of the Listed Countries in which Bayer does not have any Patent
Rights affording such patent protection, then the royalties payable
by Memory to Bayer with respect to Net Sales in this Listed Country
shall be reduced to [*]% ([*] percent) of the royalty rates defined
in Art. 4.2 of this Agreement;
(ii) if Net Sales are generated by any of Memory's Sublicensee(s) in one
of the Listed Countries in which Bayer does not have any Patent
Rights affording such patent protection, then the royalties payable
by Memory to Bayer with respect to Net Sales in this Listed Country
shall be reduced to [*]% ([*] percent); the royalty payments to be
made by Memory according to Art. 4.1 (viii) of this Agreement, i.e.
the royalties to be paid by Memory to Bayer if the royalties
received by Memory from any of its Sublicensee(s) exceed [*]%, are
however not affected by the provisions of this Art. 4.3 of this
Agreement;
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(iii) if Bayer does not have any Patent Right affording such patent
protection in a country which does not belong to the Listed
Countries, then the royalty rates for that country shall not be
reduced.
4.4. No multiple royalties shall be payable because any Finished Product, is
covered by more than one Patent Right.
4.5. In the event that a Combination Product is sold, then Net Sales of the
Combination Product shall be calculated using one of the following
methods:
(a) By multiplying the Net Sales of the Combination Product during
the applicable royalty accounting period ("accounting period") by a
fraction, the numerator of which is the average gross selling price
in the Major Countries of the Finished Product, and the denominator
of which is the average gross selling price in the Major Countries
of the Combination Product, or
(b) In the event that no such separate sales are made of the
Finished Product or the Combination Product in the Major Countries
during the applicable accounting period, Net Sales for purposes of
determining royalties payable hereunder shall be subject of
discussions between Memory and Bayer in good faith in order to
identify a fair and reasonable arrangement. If the parties are
unable to resolve a dispute arising from their discussion under this
Art. 4.5(b) within 45 days, each party shall have the right to
initiate the Dispute Resolution Procedure as set forth in Article.
8.8.
4.6. Memory agrees to pay Bayer, concurrently with the delivery of the report
set forth in Article 4.8, royalties on aggregate Net Sales during the
prior Royalty Period at the royalty rates specified in the Articles 4.1 -
4.5.
4.7. On each anniversary of the effective date of this Agreement, Memory shall
deliver to Bayer a report containing the following information with
respect to each Sublicensee to whom Memory has transferred rights during,
the period since the last such report or, in the case of the first such
period since the effective date of this Agreement:
a) identification of the Sublicensee and the kind of rights granted to
it;
b) the financial terms and conditions of the Sublicense Agreement so
far relevant to the provisions of the Articles 4.1 - 4.3.
4.8. Prior to the First Commercial Sale of a Finished Product, Memory agrees to
provide biannual summary reports on the status of its research and
development activities covered by the license granted herein. Commencing
with the First Commercial Sale of a Finished Product in any country,
within sixty (60) days after the conclusion of each Royalty Period Memory
shall deliver to Bayer a report containing the following information:
a) gross sales of Finished Products, in each country of sale, made by
or on behalf of Memory and/or its Sublicensees during the applicable
Royalty Period;
b) calculation of Net Sales for the applicable Royalty Period in each
country of sale, together with the exchange rates used for
conversion; and
[*] CONFIDENTIAL TREATMENT IS REQUESTED
c) calculation of the amount payable to Bayer for the applicable
Royalty Period.
If no royalties or other payments are due to Bayer for any Royalty Period,
the report shall so state. Concurrent with these reports, Memory shall
remit to Bayer any payment due for the applicable Royalty Period. The
method of payment shall be by check or wire transfer as directed from time
to time by Bayer. All amounts payable to Bayer under this Article 4 will
first be calculated in the currency of sale and then converted into U.S.
dollars in accordance with Art. 4.9, and such amounts shall be paid
without deduction of any withholding taxes, value-added taxes, or other
charges applicable to such payments. All reports provided to Bayer
hereunder shall be maintained in confidence by Bayer.
4.9. All payments due under this Agreement shall be payable in United States
dollars. Conversion of foreign currency ("Other Currency") to U.S. dollars
shall be made at the conversion rate existing in the United States (as
reported in the Wall Street Journal) on the last working day of the
applicable calendar quarter. Such payments shall be without deduction of
exchange, collection, or other charges. In the event that any Other
Currency shall, at the time the applicable payment by Memory to Bayer is
due, not be convertible into U.S. dollars and freely transferable by
reason of any governmental regulation or any moratorium, embargo, banking
restriction or other restriction, the obligation of Memory to make payment
of such payment shall be suspended until such time a such Other Currency
shall be convertible into U.S. dollars and freely transferable to the
United States.
4.10. Memory shall maintain, and shall ensure that any Sublicensee shall
maintain, complete and accurate records of Finished Products made, used,
or sold under this Agreement and any amounts payable to Bayer in relation
to such Finished Products, which records shall contain sufficient
information to permit Bayer to confirm the accuracy of any reports
delivered to Bayer. Memory and its Sublicensees shall retain such records
relating to a given Royalty Period for at least five (5) years after the
conclusion of that Royalty Period, during which time Bayer shall have the
right, at its expense, to cause an independent certified public accountant
(who shall be subject to confidentiality obligations) to inspect such
records during normal business hours for the sole purpose of verifying any
reports and payments delivered under this Agreement; provided, however,
that not more than one such audit shall be permitted during any twelve
(12) month period. Such accountant shall not disclose to Bayer any
information other than information relating to accuracy of reports and
payments delivered under this Agreement and shall provide Memory with a
copy of any report given to Bayer. The parties shall reconcile any
underpayment or overpayment within thirty (30) days after the accountant
delivers the results of the audit. In the event that any audit performed
under this Article reveals an underpayment in such Royalty Period in
excess of the greater of $[*] or [*] percent ([*] %) of the amount
actually paid, Memory shall bear the full cost of such audit.
4.11. Any payments by Memory that are not paid on or before the date such
payments are due under this Agreement shall bear interest at [*]
percentage points above the base prime rate of interest most recently
reported by The Wall Street Journal, calculated based on the number of
days that payment is delinquent.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
5.1. Each party represents and warrants to the other that it has the legal
right and power to enter into this Agreement, to extend the rights and
licenses granted to the other in this Agreement, and to
[*] CONFIDENTIAL TREATMENT IS REQUESTED
fully perform its obligations hereunder, and that the performance of such
obligations will not conflict with its charter documents or any
agreements, contracts, or other arrangements to which it is a party.
5.2. Bayer represents and warrants to Memory that, as of the effective date of
this Agreement, it possesses the exclusive right, title, and interest in
and to the Patent Rights and that it has the full legal right and power to
enter into the obligations and grant the rights and licenses set forth in
this Agreement. Bayer shall be responsible for and shall control the
prosecution, grant and maintenance of all Patent Rights and shall, at
Bayer's cost and expense, use reasonable efforts in order to prosecute and
maintain such Patent Rights in good faith consistent with its customary
patent policy and its reasonable business judgment, and shall in good
faith consider the interests of Memory in so doing. Bayer will, upon
request of Memory, provide Memory with information concerning the status
of Patent Rights. In the event that Bayer recognizes that a patent
protection in relation to a patent application mentioned in Annex A cannot
be obtained, or that a granted patent is becoming nullified prior to its
expiration, or that another event happens which might have an influence on
the Patent Rights, Bayer shall inform Memory in writing without undue
delay in reasonable time in advance of the event. If Bayer elects not to
(i) file foreign or PCT applications claiming priority to a pending U.S.
patent application within the one-year statutory period; (ii) continue
prosecution of a patent application; or (iii) maintain any Patent Rights,
Bayer shall so notify Memory in sufficient time for Memory to assume the
filing, prosecution and/or maintenance of such application or patent in
Bayer's name at Memory's expense; and thereafter Memory shall have the
right (but not the obligation), at its expense and discretion, to file,
prosecute or maintain any such applications or patents. Bayer agrees to
execute, and agrees to use reasonable efforts to ensure that its employees
shall execute, all documents necessary or useful for Memory to file,
prosecute and/or cause the issuance of such applications. Memory shall
have no further royalty or other obligations under this Agreement with
respect to such patents or applications.
5.3. Bayer represents, warrants and covenants that (i) neither Bayer nor a
Bayer Affiliate will manufacture, use, sell, have sold, import, export,
develop, register or market the Compound, or any product containing
Compound as its active ingredient, or license or otherwise permit any
Third Party to do any of the foregoing, in any case whether within or
outside the Field, during the term of this Agreement; and (ii) at the
effective date of this Agreement, to Bayer's actual knowledge, there are
no claims or demands of any person, firm, corporation or entity pertaining
to Patent Rights, and no proceedings have been instituted or are pending
or are threatened which challenge the right of Bayer to, or involve, the
Patent Rights.
5.4 Nothing in this Agreement shall be construed as:
a) a warranty or representation by Bayer as to the validity or scope of
any patent included within the Patent Rights;
b) a warranty or representation that the exploitation of the Patent
Rights or the manufacture, use or sale of compound and/or Finished
Products is or will be free from infringement of patents of third
parties, or is or will be technically and/or economically feasible
or useful;
c) an obligation of either party to bring or prosecute actions or suits
against Third Parties for infringement;
d) creating any agency, partnership, joint venture or similar
relationship between Bayer and Memory; or
[*] CONFIDENTIAL TREATMENT IS REQUESTED
e) conferring by implication, estoppel or otherwise any license,
immunity or right under any patent of Bayer other than those
specified in Article 2 of this Agreement.
5.4. a) Each party promptly shall advise the other party of any possible
infringement of any of the Patent Rights pertaining to manufacture,
sale and/or use of Compound by a Third Party of which such party
becomes aware, and such party shall supply the other party with any
evidence available pertaining to the possible infringement.
Memory shall have the first right (but not the obligation) to defend
the Patent Rights with respect to the manufacture, sale and/or use
rights for Compound against infringement or interference by any
Third Party, in its own name and/or the name of Bayer, at Memory's
own expense, including the bringing of any legal action for
infringement or the defending of any counterclaim of invalidity or
action of a Third Party for declaratory judgment of non-infringement
or interference. Memory may settle any such actions, solely at its
own expense and through counsel of its selection; provided, however,
that Bayer shall be entitled, in each such instance, to participate
through counsel of its own selection, at its own expense, and any
settlement that is reasonably likely to have an adverse effect on
the manufacture, sale and/or use rights for Compound included in the
Patent Rights shall not be entered into without Bayer's prior
written consent (which consent shall not be unreasonably withheld or
delayed). Bayer shall provide reasonable assistance to Memory, as
requested, and Memory shall reimburse Bayer for its reasonable
out-of-pocket expenses in connection with such requested assistance.
Memory shall be entitled to retain any recovery obtained as a result
of such action, whether by judgment, award, decree or settlement.
In the event that Memory fails to initiate and prosecute or
participate in such legal action within one hundred twenty (120)
days, Bayer shall have the right to initiate legal action, at its
own expense, to uphold the Patents Rights against Third Parties.
Memory shall provide reasonable assistance to Bayer as requested,
and Bayer shall reimburse Memory for its reasonable out-of-pocket
expenses in-connection with any such requested assistance. Bayer may
settle any such actions, solely at its own expense and through
counsel of its selection; provided, however, that Memory shall be
entitled, in each such instance, to participate through counsel of
its own selection, at its own expense, and any settlement that is
reasonably likely to have an adverse effect on the manufacture, sale
and/or use rights for Compound included in the Patent Rights shall
not be entered without Memory's prior written consent (which consent
shall not be unreasonably withheld or delayed). Memory shall provide
reasonable assistance to Bayer as requested, and Bayer shall
reimburse Memory for its reasonable out-of-pocket expenses in
connection with any such requested assistance. Bayer shall be
entitled to retain any recovery obtained as a result of such action,
whether by judgment, award, decree or settlement.
b) In any infringement suit which either party may institute to enforce
the Patent Rights pertaining to the manufacture, sale and/or use
rights for Compound, or in a suit for patent infringement which is
brought by a Third Party against Memory, which Memory is required to
defend, the other party hereto shall at the request and the expense
of the party initiating or defending such suit, cooperate in all
reasonable respects and, to the extent reasonably possible, have its
employees testify when requested and make available relevant
records, papers, information, samples, specimens and the like.
ARTICLE 6 - INDEMNIFICATION
[*] CONFIDENTIAL TREATMENT IS REQUESTED
6.1. Memory shall indemnify, defend, and hold harmless Bayer and its directors,
officers, employees, managers, agents and representatives and their
respective successors, heirs and assigns against any liability, damage,
loss, or expense (including reasonable attorneys' fees and expenses)
(collectively, "Losses") incurred by or imposed upon the foregoing
indemnitees or any one of them in connection with any claims, suits,
actions, demands, or judgments ("Claims") (i) concerning Compound,
Finished Product, Combination Product, process or service that is made,
used, sold or provided by Memory pursuant to any right or license granted
under this Agreement and/or (ii) relating to or arising from any breach by
Memory of any representation, warranty or covenant made by it in this
Agreement.
6.2. Bayer shall indemnify, defend and hold harmless Memory and its respective
directors, officers, employees, managers, agents and representatives, and
their respective successors, heirs and assigns, from and against any and
all Losses incurred by or imposed upon the foregoing indemnitees or any of
them in connection with any Claims relating to or arising from any breach
by Bayer of any representation, warranty or covenant made by it in this
Agreement.
6.3. Any person or entity seeking indemnification under this Article 6
(collectively, the "Indemnified Parties") shall promptly give notice to
the party required to provide indemnification hereunder (the "Indemnifying
Party") with respect to any Claims as to which it asserts a right to
indemnification, and within thirty (30) days thereafter, further notify
Indemnifying Party of the details of such Claim and the amount thereof;
provided, however, that the failure to give such notification shall not
relieve the Indemnifying Party from any liability that it may have
pursuant to the provisions of this Article 6 as long as the failure to
give such notice within such time is not prejudicial to the Indemnifying
Party. Notice to the Indemnifying Party for the purpose of this Article 6
shall include the filing of the service upon the Indemnifying Party of any
legal action or any other form of actual notice. Bayer or Memory, as the
case may be, may set off the amount of any Claim or Claims in respect of
which such Indemnified Parties are entitled to indemnification hereunder
against amounts otherwise due to the Memory or Bayer, as the case may be,
hereunder. If the Indemnifying Party does not promptly and to the
Indemnified Parties' satisfaction assume the defense of any Claim, the
Indemnified Parties may do so at the Indemnifying Party's cost and
expense. The Indemnifying Party may not compromise or settle any Claim
without the prior written consent of the Indemnified Parties.
ARTICLE 7 - TERM AND TERMINATION
7.1. This Agreement shall commence upon being signed by both parties (the
"Effective Date") and shall remain in effect until the expiration of the
last to expire of the Patent Rights, unless earlier terminated as provided
in this Article. The term for payment of royalties for each Finished
Product and, if applicable, for each Combination Product shall commence
with the First Commercial Sale and shall end on a country by country basis
upon either (i) the date on which the last Patent Right in such country
expires, or (ii) ten (10) years after the First Commercial Sale of the
Finished Product and, if applicable, Combination Product in such country,
whichever is longer.
7.2. In the event that Memory determines that it has a material scientific
and/or technical problem relating to the development and/or regulatory
approval of Compound or Finished Product in the Field, or a material
economic and/or business problem relating to the development and/or
regulatory approval and/or marketing of Compound or Finished Product in
the Field, Memory may terminate this Agreement by giving 30 (thirty) days
prior written notice thereof to Bayer,
[*] CONFIDENTIAL TREATMENT IS REQUESTED
setting forth the specific reason(s) for termination in detail. Bayer will
evaluate these reasons in good faith and in case that Bayer according to
its sole decision does not accept these reasons, it shall so notify Memory
in writing within forty five (45) days of its receipt of Memory's notice
and Memory and Bayer shall then enter into the Dispute Resolution
Procedure in accordance with the provisions of Art. 8.8; provided,
however, that Memory shall not be obligated to enter into any arbitration.
In the event that this Dispute Resolution Procedure fails Memory may
terminate this Agreement immediately.
7.3. In the event that Memory fails to make timely payment of any amounts due
to Bayer under this Agreement Bayer may terminate this Agreement upon
thirty (30) days written notice to Memory, unless Memory pays all past-due
amounts prior to the expiration of such thirty (30)-day notice period.
7.4. In the event that either party commits a material breach of any of its
obligations under this Agreement, other than that stated in Art. 7.3, and
such party fails to remedy that breach within ninety (90) days after
receiving written notice thereof from the other party, that other party
may immediately terminate this Agreement upon written notice to the
breaching party.
7.5. Upon expiration of this Agreement pursuant to Art. 7.1, or upon
termination of this Agreement by Memory pursuant to Art. 7.4, Memory shall
have a fully paid up worldwide license under the terms set forth in
Article 2 with respect to Memory's activities as to Compound and/or
Finished Product subsequent to the date of expiration or any such
termination.
7.6. Upon termination of this Agreement by Memory pursuant to Art. 7.2, all
rights and licenses granted to Memory by Bayer under this Agreement shall
terminate immediately. If Bayer is interested to proceed with the
development and/or marketing of Finished Product, and to use the data and
results obtained by Memory during the development, and/or the NDA
approvals of Memory, the parties shall negotiate reasonable terms and
conditions under which Bayer may use Memory's data and results and/or NDA
approvals.
7.7. Upon termination of this Agreement by Bayer pursuant to Art. 7.3 or Art.
7.4, all rights and licenses granted to Memory by Bayer under this
Agreement shall terminate immediately. If Bayer is interested to proceed
with the development and/or marketing of Finished Product, Memory shall
disclose to Bayer all data and results obtained by Memory during the
development, and shall further transfer free of charge the right, title
and interest in all such data and results, including inventions, to Bayer.
If applicable, Memory shall also assign to Bayer its NDA approvals for
Finished Products in all countries free of charge.
7.8. Memory agrees that, in the event that this Agreement is terminated
pursuant to the terms, hereof, Memory shall so notify each Sublicensee
within twenty (20) days of such termination.
7.9. The milestones payments and the royalty payments to be made by Memory
under Art. 4 shall not be refunded following the expiration or termination
of this Agreement. Any milestone payment and/or royalty payment shall
however not become due if notice of termination was given by the party
entitled to do so prior to the due date of any such payment.
7.10. The expiration or termination of this Agreement for any reason whatsoever
shall be without prejudice to any obligations or rights on the part of
either party which have accrued prior to such termination, and shall not
affect or prejudice any provision, of this Agreement which is expressly or
by implication provided to come into effect on, or continue in effect
after such termination.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
7.11. Unless otherwise expressly provided herein, upon expiration or termination
of this Agreement for any reason whatsoever, neither party shall be
entitled to claim indemnification or compensation on any ground
whatsoever, including but not limited to loss of investment, loss of
profit, business goodwill etc. with respect to such expiration or
termination to the exclusion of damages caused by willful misconduct or
gross negligence of a party hereto.
7.12. Pending the conclusion of any Dispute Resolution Procedure or arbitration
procedure pursuant to the terms hereof, the parties shall continue to
perform their obligations hereunder to the extent not in dispute and no
default hereunder shall be deemed to occur until such decision is rendered
(whereupon any party determined to be in default hereunder shall have the
benefit of any applicable grace and/or cure periods).
ARTICLE 8 - MISCELLANEOUS
8.1. All notices, requests, demands and other communications required or
permitted to be given pursuant to this Agreement shall be in writing and
shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized international overnight courier, confirmed
facsimile transmission, or registered or certified mail, return receipt
requested, postage prepaid to the following addresses or facsimile
numbers:
If to Memory: If to Bayer:
Memory Pharmaceuticals Corp. ▇▇▇▇▇ ▇▇
100 Philips Parkway ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ / U.S.A. Germany
Attention: Chief Executive Officer International Cooperation
and Licensing
Building: Q 30
(++49)-214-30 64840
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may change its designated address and facsimile number by
notice to the other party in the manner provided in this Section.
8.2. This Agreement shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany.
8.3. This Agreement may not be assigned by either party without the prior
written consent of the other party, except that either party may assign
this Agreement to any of its Affiliates or to a successor in connection
with the merger, consolidation, or sale of all or substantially all of its
assets or that portion of its business pertaining to the subject matter of
this Agreement, with prompt written notice to the other party of any such
assignment. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective lawful successors and assigns.
8.4. Nothing in this Agreement shall be construed so as to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement and any statute, law, ordinance or
treaty, the latter shall prevail, but in such event the affected
provisions
[*] CONFIDENTIAL TREATMENT IS REQUESTED
of the Agreement shall be conformed and limited only to the extent
necessary to bring it within the applicable legal requirements.
8.5. This Agreement may be amended, supplemented, or otherwise modified only by
means of a written instrument signed by both parties. Any waiver of any
rights or failure to act in a specific instance shall relate, only to such
instance and shall not be construed as an agreement to waive any rights or
fail to act in any other instance, whether or not similar.
8.6. Neither party shall be responsible to the other for any failure of delay
in performing any of its obligations under this Agreement or for other
non-performance hereof if such delay or non-performance is caused by any
circumstances unavoidable or beyond the reasonable control of a party such
as, but not limited to, strike, stoppage of labor, lockout or other labor
trouble, fire, flood, accident, act of God or of government or of the
public enemy of a Party ("Force Majeure").
However, the party affected by such Force Majeure shall use its best
reasonable efforts to avoid, remove or remedy such circumstances. Either
party temporarily excused from performance hereunder by such circumstances
shall resume performance with utmost dispatch when such circumstances are
removed or remedied. Either party claiming Force Majeure as an excuse for
delay in performance shall give the other party written notice thereof
without undue delay as a condition of its right to invoke Force Majeure.
8.7. The provisions of the Secrecy Agreement and the Confidentiality Agreement
are not affected or modified by this Agreement and shall remain unchanged
and in force. Notwithstanding the foregoing, the parties acknowledge and
agree that Memory may contact third party contractors in order to
establish an ongoing supply of the Compound or for other commercial
purposes. In connection therewith, Memory may disclose Bayer's
confidential information to such third party contractors for their use in
connection therewith. As far as Memory is entitled to grant certain rights
and licenses to its Affiliates and Third Parties under this Agreement,
Memory may disclose Bayer's confidential information on a need to know
basis to such Affiliates and Third Parties. Such Affiliates and Third
Parties, including third party contractors, will however in any case in
advance be bound to terms as stringent as provided under the
Confidentiality Agreement.
8.8. The parties recognise that disputes as to certain matters may from time to
time arise during the term of this Agreement which relate to either
party's rights and/or obligations hereunder. It is the objective of the
parties to establish a procedure at the level of their executive officers
(the "Dispute Resolution Procedure") to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by
co-operation. To accomplish this objective, the parties agree to follow
the procedure set forth herein, if and when the parties are unable to
resolve a dispute within forty-five (45) days of being requested by a
party to do so. The establishment of the Dispute Resolution Procedure
shall not be used to override any right specifically given to a party, to
take action or have final decision-making authority on any topic.
If the parties are unable to resolve a dispute within forty-five (45) days
of being requested by a Party to do so, either party may initiate the
Dispute Resolution Procedure by written notice to the other. The
respective executive officers designated below or their successors, shall
then attempt to resolve the dispute by good faith negotiations within
fifteen (15) days after such notice is received. Said designated officers
are as follows:
For Bayer: Head of Pharmaceuticals Business Group
For Memory: Chief Executive Officer
[*] CONFIDENTIAL TREATMENT IS REQUESTED
In the event that the designated executive officers are not able to
resolve a dispute in accordance with the Dispute Resolution Procedure as
set forth hereunder, either party may at any time after such fifteen (15)
day period proceed with arbitration as provided hereinafter.
8.9. All disputes arising in connection with this Agreement shall be finally
settled under the rules of conciliation and arbitration of the
International Chamber of Commerce by 3 (three) arbitrators appointed in
accordance with said rules. The arbitration shall be held in the English
Language. The arbitrators shall determine which party, or the extent to
which each party, shall bear the costs and expenses of such arbitration.
The place of arbitration shall be Paris, France. However, arbitration may
only be requested for by any party following a period of thirty (30) days
after the Dispute Resolution Procedure pursuant to Art. 8.8 has failed.
Within this period of thirty (30) days any party may file a request for
Conciliation to the Secretariat of the International Court of Arbitration
of the International Chamber of Commerce to provide the possibility of
settling such dispute in a Conciliation under the rules of conciliation of
the International Chamber of Commerce. The other party is not obliged to
accept such conciliation. The outcome of the Conciliation is not binding
for any party and does not exclude any party from entering into an
arbitration.
8.10. In the event that any provision of this Agreement shall, for any reason,
be held to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof, and the
parties shall negotiate in good faith to modify the Agreement to preserve
(to the extent possible) their original intent.
8.11. This Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements
or understandings between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the Effective Date.
Montvale, New Jersey
Date: June 7, 2001
Memory Pharmaceuticals Corporation
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
Leverkusen, Germany
Date: June 13, 2001
▇▇▇▇▇ ▇▇
/s/ ▇▇. ▇▇▇▇▇▇ /s/ ▇▇. ▇▇▇▇▇▇
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▇▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇
(International Cooperations and (Patents and Licensing)
Licensing)
[*] CONFIDENTIAL TREATMENT IS REQUESTED