LICENSE AND COLLABORATION AGREEMENT
between
APOLLO GENETICS, INC.
and
ATHENA NEUROSCIENCES, INC.
Dated as of
April 16, 1996
TABLE OF CONTENTS
License and Collaboration Agreement
TOPIC PAGE NO.
- ----- --------
ARTICLE 1. DEFINITIONS
1.1 Acute Formulation 1
1.2 Affiliate 1
1.3 Committee 1
1.4 Compound(s) 2
1.5 Development Funding 2
1.6 Field 2
1.7 First Commercial Sale 2
1.8 Improvements 2
1.9 Licensed Know-How 2
1.10 Licensed Patent Rights 2
1.11 Licensed Technology 2
1.12 Lilly and Lilly Collaboration 3
1.13 Net Products Revenue 3
1.14 Neurestrol-Registered Trademark- 3
1.15 Person 3
1.16 Plan 3
1 17 Product 3
1.18 Royalty Term 3
1.19 Territory 3
1.20 Valid Patent Claim 3
ARTICLE 2. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS 3
2.1 Apollo Representations and Warranties 3
2.2 Athena Representations and Warranties 5
2.3 Disclaimers of Warranties 5
ARTICLE 3. LICENSE GRANT 6
3.1 Licensed Technology 6
3.2 Acute Formulation 6
3.3 Neurestrol-Registered Trademark- License Option 6
ARTICLE 4. CONTROL OF DATA 7
TOPIC PAGE NO.
- ----- --------
ARTICLE 5. LICENSE FEES AND ROYALTY PAYMENTS 7
5.1 License Fees 7
5.2 Royalty Rate 7
5.3 Royalty Credits 8
ARTICLE 6. ROYALTY REPORTS AND ACCOUNTING 8
6.1 Reports, Exchange Rates 8
6.2 Access 8
6.3 Sublicenses 8
6.4 Confidential Financial Information 9
ARTICLE 7. PAYMENTS 9
7.1 Payment Terms 9
7.2 Exchange Control 9
7.3 Withholding Taxes 9
ARTICLE 8. RESEARCH AND DEVELOPMENT OBLIGATIONS 9
8.1 Development 9
8.2 Funding and Resources 9
8.3 Committee 9
ARTICLE 9. PATENTS AND INFRINGEMENT ACTIONS 10
9.1 Patent Prosecution and Maintenance 10
9.2 Notification of Infringement 11
9.3 Enforcement of the Licensed Patent Rights 11
9.4 Improvements 11
9.5 Infringement Action by Third Parties 11
ARTICLE 10. CONFIDENTIALITY 12
ARTICLE 11. TERMINATION 12
11.1 Expiration 12
11.2 Termination by Athena 12
11.3 Termination for Cause 13
11.4 Effect of Expiration or Termination 13
TOPIC PAGE NO.
- ----- --------
ARTICLE 12. INDEMNIFICATION AND INSURANCE 13
12.1 Indemnification 13
12.2 Procedure 13
12.3 Insurance 13
ARTICLE 13. FORCE MAJEURE 14
ARTICLE 14. MISCELLANEOUS 14
14.1 Notices 14
14.2 Arbitration 14
14.3 Assignment 14
14.4 Amendments 15
14.5 Entire Agreement 15
14.6 Severability 15
14.7 Waiver 15
14.8 Counterparts 15
14.9 No Announcement 15
LICENSE AND COLLABORATION AGREEMENT
THIS LICENSE AND COLLABORATION AGREEMENT (the "Agreement"), dated as of
April 16, 1996, is entered into between APOLLO GENETICS, INC., a Delaware
corporation ("Apollo"), having its principal place of business at 222 Third
Street, Suite 2110, Cambridge, Massachusetts 02142, and ATHENA NEUROSCIENCES,
INC., a Delaware corporation ("Athena"), having its principal place of
business at 800 Gateway Boulevard, South San Francisco, California 94080.
RECITALS
A. Apollo is the owner or exclusive licensee of certain Licensed
Patent Rights (as defined below) and know-how relating to certain estrogen
compounds that may have utility in the field of neurodegenerative diseases.
B. On April 16, 1996, Athena has exercised its exclusive option to
acquire from Apollo a worldwide license to such Licensed Patent Rights and
Licensed Know-How (as defined below), upon the terms and conditions
hereinafter set forth.
C. Apollo and Athena wish to enter into this License and Collaboration
Agreement for the development of such compounds; and to establish a steering
committee for the management of such development, all on the terms and
conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises herein contained, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS:
1.1 "ACUTE FORMULATION" means any therapeutic product incorporating a
Compound for the purpose in whole or in part of treating acute (i.e.,
anticipated treatment regimen of less than six months) neurodegenerative
diseases or conditions, such as stroke or head trauma, in an intramuscular or
intravenous formulation.
1.2 "AFFILIATE" shall mean, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person (including without limitation, as it
pertains to Athena, Elan Corporation plc ("Elan") and its Affiliates).
1.3 "COMMITTEE" shall have the meaning given in Section 8.3 below.
-1-
1.4 "COMPOUND(S)" shall mean the estrogen compound(s) which are the
subject of the Licensed Patent Rights, with the exception of
Neurestrol-Registered Trademark-, which is the subject of the option set out
in Section 3.3 below.
1.5 "DEVELOPMENT FUNDING" shall mean all funds and resources (including
all out-of-pocket costs, plus reasonable amounts for internal resources)
expended by either party in the development efforts described herein, net of
any amounts received from third parties (such as Eli Lilly and Company) which
are used for such expenditures. Such amounts shall include out-of-pocket
expenses paid after the date of this Agreement under Sections 9.1 and 9.3
below. "Apollo Development Funding" shall mean Development Funding expended
by Apollo. "Athena Development Funding" shall mean Development Funding
expended by Athena.
1.6 "FIELD" shall mean the field of chronic neurodegenerative
conditions or diseases (i.e., an anticipated treatment regimen of six months
or more).
1.7 "FIRST COMMERCIAL SALE" shall mean, with respect to any country in
the Territory, the first sale of Products after any required marketing,
pricing or other approval has been granted by the governing health authority
of such country.
1.8 "IMPROVEMENTS" shall have the meaning given in Section 9.4 below.
1.9 "LICENSED KNOW-HOW" shall mean, with respect to the Field, all
information and data which is not generally known including, but not limited
to, formulas, procedures for experiments, assay protocols, results of
experimentation and testing, data, and specifications which are reasonably
necessary or useful for Athena to make, have made, use or sell the Compounds,
or to practice the processes and methods, claimed or otherwise disclosed in
the Licensed Patent Rights, in which Apollo now or hereafter-has an-ownership
or licensable interest, and which is in the possession or control of Apollo
during the term of the Agreement.
1.10 "LICENSED PATENT RIGHTS" shall mean (a) all patent applications
heretofore or hereafter filed or having legal force in any country within the
Territory, now or hereafter owned by or licensed to Apollo or to which Apollo
otherwise acquires rights, [ * ] and incorporated by reference,
together with any and all patents that have issued or in the future issue
therefrom, including without limitation utility, model and design patents and
certificates of invention, and (b) all divisionals, continuations,
continuations-in-part, reissues, renewals, supplementary protection
certificates, extensions or additions to any such patents and patent
applications; all to the extent and only to the extent that Apollo has the
right to grant licenses, immunities or other rights thereunder as of the date
or during the term of the Agreement.
1.11 "LICENSED TECHNOLOGY" shall mean, collectively, the Licensed Patent
Rights and the Licensed Know-How.
* Confidential treatment has been requested for marked portion
-2-
1.12 "LILLY" AND "LILLY COLLABORATION" shall have the meanings given in
Section 2.1 (f) below.
1.13 "NET PRODUCTS REVENUE" shall mean, with respect to any Products,
actual cash receipts by Athena or its Affiliates from payment of invoices
issued to independent customers who are not Affiliates for the sale of such
Products in the Territory by Athena or its Affiliates, less [ * ]
1.14 "NEURESTROL-Registered Trademark-" shall mean 17-estradiol within a
pellet implant subcutaneous drug delivery vehicle.
1.15 "PERSON" shall mean an individual, corporation, partnership,
association, joint venture, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
1.16 "PLAN" shall have the meaning given in Section 8.3 below.
1.17 "PRODUCT" shall mean any product sold commercially by Athena, its
Affiliates or any sublicensee which incorporates a Compound.
1.18 "ROYALTY TERM" shall mean, with respect to each country in the
Territory, the period commencing on the First Commercial Sale in such country
and ending on the later of (a) ten (10) years from the date of the First
Commercial Sale in such country, or (b) the last expiration of any patent
issued in such country based upon a Valid Patent Claim.
1.19 "TERRITORY" shall mean the entire world.
1.20 "VALID PATENT CLAIM" shall mean either (a) a claim of an issued and
unexpired patent included within the Licensed Patent Rights, which has not
been held permanently revoked, unenforceable or invalid by a decision of a
court or other governmental agency of competent jurisdiction, unappealable or
unappeased within the time allowed for appeal, and which has not been
admitted to be invalid or unenforceable through reissue or disclaimer or
otherwise, or (b) a claim of a pending patent application included within the
Licensed Patent Rights, which claim was filed in good faith and has not been
abandoned or finally disallowed without the possibility of appeal or refiling
of such application.
ARTICLE 2. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS:
2.1 APOLLO REPRESENTATIONS AND WARRANTIES. Apollo hereby represents and
warrants to Athena as follows:
* Confidential treatment has been requested for marked portion
-3-
(a) Apollo has the full legal right to enter into the Agreement and
to perform its obligations hereunder. The Agreement has been duly executed
and delivered by Apollo, and constitutes a legal, valid and binding
obligation, enforceable against Apollo in accordance with its terms.
(b) All necessary notices, consents, approvals and authorizations
of all governmental authorities and other Persons required to be obtained by
Apollo in connection with the Agreement (including without limitation The
University of Florida Research Foundation, Inc.) have been timely given or
obtained by Apollo. Apollo will take all actions reasonably necessary to
maintain any licenses of Licensed Technology to Apollo in full force and
effect as they may affect or relate to Athena's rights hereunder. Apollo will
not modify, amend or terminate in any material respect any such licenses
without Athena's prior written consent, not to be unreasonably withheld.
Apollo will promptly notify Athena in writing in the event of any alleged
breach, default, expiration or termination under any such license by any
party thereto.
(c) The execution and delivery of the Agreement and the performance
of Apollo's obligations hereunder do not conflict with, or constitute a
default under, any contractual or other obligation of Apollo and, to Apollo's
best knowledge, do not conflict with or violate any requirement of applicable
laws or regulations.
(d) Apollo is the sole owner or exclusive licensee of the Licensed
Technology, and has not granted to any third party any license, sublicense or
other interest of any kind (including any charge, lien or encumbrance) in the
Licensed Technology with the exception of Neurestrol-Registered Trademark-.
Exhibit A represents a correct and complete list of pending patents, patent
applications, continuations-in-part, et al., comprising the Licensed Patent
Rights as of the date of this Agreement.
(e) Except (a) as to Neurestrol-Registered Trademark-, upon the
expiration without exercise of the Neurestrol-Registered Trademark- option in
Section 3.3 below, and (b) as to an Acute Formulation, after compliance with
Section 3.2 below, during the term of this Agreement, Apollo shall not enter
into any agreement with any third party with respect to the development,
license, sale, transfer, encumbrance, marketing or distribution of the
Licensed Technology.
(f) Apollo acknowledges that Athena has a preexisting collaboration
with Eli Lilly and Company ("Lilly"), dated May 31, 1995, as amended, in the
field of therapeutics for Alzheimer's disease (the "Lilly Collaboration").
The Lilly Collaboration provides that Lilly has an exclusive option to
exclusively license worldwide any compound Athena evaluates using technology
developed by Lilly and/or Athena which is subject to the Lilly Collaboration.
Apollo further acknowledges that Athena will evaluate one or more Compounds
using technology developed under the Lilly Collaboration and that Athena will
be obligated to offer Lilly an option to license such Compounds under the
terms of the Lilly Collaboration. Apollo further acknowledges and agrees that
Lilly may, by sublicense, assignment or otherwise, participate in Athena's
rights under this Agreement (as defined below). Athena will provide Apollo
with copies of any amendments to the Lilly Collaboration which could
reasonably be material to Apollo's rights hereunder.
-4-
(g) To Apollo's best knowledge, the exploitation by Athena of the
Licensed Technology will not infringe upon the patent rights of any third
party as of the date of this Agreement.
2.2 ATHENA REPRESENTATIONS AND WARRANTIES. Athena hereby represents and
warrants to Apollo as follows:
(a) Athena has the full legal right to enter into this Agreement
and to perform its obligations hereunder. The Agreement has been duly
executed and delivered by Athena, and constitutes a legal, valid and binding
obligation, enforceable against Athena in accordance with its terms.
(b) All necessary notices, consents, approvals and authorizations
of all governmental authorities and other persons required to be obtained by
Athena in connection with the Agreement (including without limitation Lilly
and Elan) have been timely given or obtained by Athena.
(c) To Athena's best knowledge, the execution and delivery of the
Agreement and the performance of Athena's obligations hereunder do not
conflict with or violate any requirement of applicable laws or regulations,
and do not conflict, or constitute a default under any contractual or other
obligation of Athena.
(d) Athena acknowledges that Apollo has a pre-existing relationship
with Endocon, Inc. ("Endocon") regarding Neurestrol-Registered Trademark-.
Athena further acknowledges that Endocon and, subject to the option granted
in Section 3.3 below, Apollo, may sublicense, sell or transfer its rights in
Neurestrol-Registered Trademark- to one or more third parties.
2.3 DISCLAIMERS OF WARRANTIES.
(a) APOLLO MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO ANY TECHNICAL INFORMATION LICENSED OR
OTHERWISE PROVIDED TO ATHENA OR ITS AFFILIATES OR SUBLICENSEES HEREUNDER, AND
HEREBY DISCLAIMS THE SAME.
(b) APOLLO DOES NOT WARRANT THE SAFETY OR EFFICACY OF THE LICENSED
TECHNOLOGY.
-5-
ARTICLE 3. LICENSE GRANT:
3.1 LICENSED TECHNOLOGY. Apollo hereby grants to Athena an exclusive
license under the Licensed Technology, for use only in the Field, to make,
have made, use and sell Compounds and Products and to practice processes and
methods using the Compounds and Products in the Territory. This license does
not include Neurestrol-Registered Trademark-, which is the subject of the
Neurestrol-Registered Trademark- license option pursuant to Section 3.3.
Athena shall have the right to grant sublicenses with the prior consent of
Apollo, which consent shall not be unreasonably withheld.
3.2 ACUTE FORMULATION. Apollo shall have the right to develop one or
more Acute Formulations, subject to this Section. Prior to undertaking or
agreeing to undertake the development of any Acute Formulation, Apollo shall
first submit a written proposal to Athena, which shall specifically identify
the Acute Formulation to be developed, and shall include a reasonably
detailed three-year scientific and business plan and budget (the "Proposal").
Athena shall have the opportunity to review the Proposal. Within ninety days
of receipt of the full Proposal, Athena may decide in its sole discretion
whether to fund the Proposal.
(a) If Athena declines to fund the Proposal, Apollo shall be free
to develop the Acute Formulation identified in the Proposal independently, or
with a third party upon terms substantially identical to or materially more
favorable to Apollo, with no payment or royalty to Athena.
(b) If Athena agrees to fund the Proposal, Apollo shall grant to
Athena a license. contingent upon further development requirements as
contained in the Proposal, for the Acute Formulation which is the subject of
the Proposal. The license shall provide that Apollo shall be entitled to a
[ * ] percent ([ * ]) royalty in all Net Products Revenue from that Acute
Formulation, and shall contain other terms and conditions substantially
similar to this Agreement. The Committee shall administer that Acute
Formulation in the same way provided for under Section 8.3, below, for
Compounds in the Field. If Athena later determines in its sole discretion not
to pursue development and/or funding under the Proposal and the resulting
license for the Acute Formulation, Apollo shall be free to develop the Acute
Formulation identified in the Proposal independently, or with a third party
on terms substantially identical to or materially more favorable to Apollo.
Athena shall terminate or sublicense its rights under the Acute Formulation
license, as Apollo reasonably requests, and the parties shall negotiate in
good faith a royalty to Athena commensurate with its economic and other
contributions to the date of termination or sublicense of Athena's rights
under that license. Any such license, and any termination or sublicense
thereof, shall have no effect on either party's rights under this Agreement.
3.3 NEURESTROL-Registered Trademark- LICENSE OPTION. In return
for the consideration described herein, Apollo also hereby grants to Athena
an exclusive option, to be exercised in writing no later than January 16,
1997, to obtain an exclusive, worldwide license. under the Licensed
Technology, to Apollo's interest in the Neurestrol-Registered Trademark- drug
delivery technology and to practice processes and methods using
Neurestrol-Registered Trademark- for use in the Field. Prior to that date,
Apollo shall provide, at Athena's request, all information within Apollo's
possession regarding Neurestrol-Registered Trademark-. The fee for
* Confidential treatment has been requested for marked portion
-6-
exercise of such option shall be $[ * ], payable upon exercise of that
option. If that option is exercised, the parties shall then negotiate in good
faith and use commercially reasonable efforts to enter into a license
agreement upon reasonable economic terms and conditions to be negotiated, and
other terms which are reasonably similar to this Agreement, taking into
account the nature of the transaction and the parties.
ARTICLE 4. CONTROL OF DATA:
4.1 CONTROL OF DATA. Upon termination of this Agreement for any
reason, the following principles shall determine control of and ongoing
access to data generated as a result of efforts to develop one or more
Products under this Agreement:
(a) Any data related to [ * ], will remain proprietary
to Athena and shall not be released, disclosed or communicated by Apollo
either orally or in writing to any other party for any reason, without
Athena's prior written consent in its sole discretion. In the event of
disclosure which Apollo believes to be legally required, Apollo will give as
much advance written notice to Athena as possible of the proposed disclosure,
and will cooperate reasonably in any effort by Athena to prevent or limit the
necessary disclosure.
(b) Any data generated under this Agreement which is not related to
[ * ] may be freely published, disclosed or released by Apollo,
provided that Apollo (i) gives at least sixty (60) days' advance written
notice of each such proposed disclosure, to allow Athena to protect its
intellectual property position, and (ii) retracts any information which
Athena reasonably requests, as being confidential or proprietary to Athena.
(c) Section 9.4 shall continue to apply to Improvements.
ARTICLE 5. LICENSE FEES AND ROYALTY PAYMENTS:
5.1 LICENSE FEES. Unless notice of termination has been given by
Athena under Article 11 below, Athena shall pay Apollo license fees upon the
occurrence of each event described below, in the amounts shown:
(a) $ [ * ] and
(b) $ [ * ]
5.2 ROYALTY RATE . During the Royalty Term, Athena shall pay to Apollo
royalties of [ * ] percent ([ * ]) of the following: (a) all sublicense fees
and milestone, royalty or other payments (other than research or development
funding) actually received by Athena or any Affiliates from each sublicensee,
in consideration for the sublicense of the Licensed Technology
* Confidential treatment has been requested for marked portion
-7-
to commercially develop a Compound; and (b) Net Products Revenue actually
received by Athena or any Affiliates from sales of any Product.
5.3 ROYALTY CREDITS. The royalties payable by Athena under Section 5.2
above shall be reduced by the following: (a) a credit for Athena Development
Funding through the period covered by the applicable royalty report, less
Apollo Development Funding for the same period, up to a maximum net
Development Funding credit in that period of [ * ] percent ([ * ]%) of the
gross royalty payable by Athena for the period, with any unused amounts
carrying forward to subsequent periods; and (b) a credit, during the [ * ],
for the license fees paid by Athena under Section 5. I(a) and (b) above, up
to a maximum aggregate license fee credit of [ * ] percent ([ * ]%) of such
amounts, with any unused amounts carrying forward to subsequent periods.
ARTICLE 6. ROYALTY REPORTS AND ACCOUNTING:
6.1 REPORTS, EXCHANGE RATES. Following the First Commercial Sale,
Athena shall furnish to Apollo a quarterly written report showing in
reasonably specific detail, on a country-by-country basis, (a) the number of
Products sold which generated Net Products Revenue to Athena, its Affiliates
and its sublicensees in the Territory during the reporting period; (b) the
royalties payable in United States dollars, if any, which shall have accrued
hereunder for such reporting period; (c) the withholding taxes, if any,
required by law to be deducted in respect of such sales; (d) the date of the
First Commercial Sale in each country in the Territory during the reporting
period; and (e) a calculation of the credits, if any, to which Athena is
entitled under Section 5.3 above. Reports shall be due no later than the
sixtieth (60th) day following the close of each calendar quarter. Athena
shall keep complete and accurate records in sufficient detail to properly
reflect all Products sold which generated Net Products Revenue and to enable
the royalties payable hereunder to be determined.
6.2 ACCESS. Upon the written request of Apollo and not more than twice
in each calendar year, Athena and its Affiliates shall permit Apollo or its
representative (which shall not include Athena's independent accountants) to
have access during normal business hours to such of their respective records
as may be reasonably necessary to verify the accuracy of the royalty reports
hereunder for any year ending not more than thirty-six (36) months prior to
the date of such request.
6.3 SUBLICENSES. Athena shall use commercially reasonable efforts to
include in each permitted sublicense granted by it pursuant to this Agreement
a provision requiring the sublicensee to make reports to Athena, to keep and
maintain records of sales made pursuant to such sublicense and to grant
access to such records by Athena and Apollo to the same extent required of
Athena under this Agreement. Upon the expiration of three (3) years following
the end of any calendar year, the calculation of royalties payable with
respect to such year shall be binding and conclusive upon Apollo and Athena,
its Affiliates and sublicensees.
* Confidential treatment has been requested for marked portion
-8-
6.4 CONFIDENTIAL FINANCIAL INFORMATION. Apollo and its representatives
shall treat all information subject to review under this Article 6 or under
any sublicense agreement as strictly confidential, and shall not disclose it
to any other party for any purpose.
ARTICLE 7. PAYMENTS:
7.1 PAYMENT TERMS. Royalties shown to have accrued by each royalty
report provided for under Article 6 above shall be due and payable by Athena
on the date such royalty report is due. All payments by Athena to Apollo
under the Agreement shall be paid in United States dollars calculated at the
applicable exchange rate as of the date the payment is made, and shall be
made, at Athena's option, either by bank wire transfer or by check to such
address or account as Apollo shall designate in writing before such payment
is due.
7.2 EXCHANGE CONTROL. If at any time legal restrictions prevent the
prompt remittance of part or all royalties with respect to any country in the
Territory where the Products are sold, Athena shall have the right, in its
sole discretion, to make such payments by depositing the amount thereof in
local currency to Apollo's account in a bank or other depository institution
in such country. If the royalty rate specified in the Agreement should exceed
the permissible rate established in any country, the royalty rate for sales
in such country shall be adjusted to the highest legally permissible or
government-approved rate.
7.3 WITHHOLDING TAXES. Athena shall be entitled to deduct the amount
of any withholding taxes, value-added taxes or other taxes, levies or charges
with respect to such amounts, other than United States, state or local income
taxes, required to be paid or withheld by Athena, its Affiliates or
sublicenses Athena shall promptly deliver to Apollo, upon request, proof of
payment or withholding of all such taxes, levies and other charges.
ARTICLE 8. RESEARCH AND DEVELOPMENT OBLIGATIONS:
8.1 DEVELOPMENT. Athena shall undertake reasonable efforts to develop,
obtain regulatory approvals for and sell a Product (or more than one Product,
if Athena so determines in its discretion) for use in the Field in accordance
with the Plan, and will provide such information as the Committee may
reasonably require in order to plan, monitor and approve such development.
8.2 FUNDING AND RESOURCES. Athena shall provide (either alone, or with
partners, sublicensees or other collaborators approved by the Committee) the
funding and resources necessary to carry out the development approved by the
Committee under the Plan for the Field. Apollo may but is not required to
provide any part of such funding.
8.3 COMMITTEE. Subject to the rights of Lilly under the Lilly
Collaboration, the progress of the collaboration in the Field shall be
monitored by a steering committee (the "Committee"). The Committee shall
consist of four individuals, two of whom shall be appointed (and replaced, as
necessary) by each party. Meetings of the Committee shall be held
periodically
-9-
(but no less than every six (6) months) at a mutually acceptable location.
Each party shall pay the expenses of its Committee members. Reasonably in
advance of each meeting of the Committee, each party to this Agreement shall
provide to the Committee a confidential written report summarizing its best
current estimates of its expenditures and work performed in connection with
the collaboration during the period. The Committee shall exercise reasonable
business judgment in the pursuit of its activities, and may take action only
upon the affirmative vote of at least three of its members. The Committee
shall dissolve as of the termination of this Agreement. The duties of the
Committee shall include the following:
(a) approving and amending, as needed, a development plan and
budget for activities in the Field under this Agreement (the "Plan"). The
Plan shall include both scientific and business milestones, an internal and
external budget and other resources to be devoted to the collaboration;
(b) determining how best to obtain the expertise needed to carry
out the Plan in the best interests of the parties, with preference being
given to Apollo for research efforts in its areas of expertise; and
(c) approving and amending, as needed, a Plan for development of an
Acute Formulation, if the parties have agreed to pursue such development
under the Agreement as provided in Section 3.2(b) above.
ARTICLE 9. PATENTS AND INFRINGEMENT ACTIONS:
9.1 PATENT PROSECUTION AND MAINTENANCE. Apollo shall be responsible
for and shall control the preparation, filing, prosecution and maintenance of
all patents and patent applications in the Territory related to the Licensed
Patent Rights and will consult with and consider the reasonable requests of
Athena in all such matters. Apollo shall use its best efforts to provide
Athena with an opportunity to review and comment on all prosecution documents
for each Patent application subject to this Section before the filing of such
prosecution document. Apollo shall supply Athena with a copy of each patent
application as filed which constitutes a portion of the Licensed Patent
Rights, together with notice of its filing date and serial number. Athena
shall reasonably assist and cooperate with Apollo, execute all lawful papers
and instruments and make all oaths and declarations as may be reasonably
necessary in the preparation, prosecution and maintenance of all patents and
other filings referred to in this Section. As a part of its Development
Funding, Athena shall bear all reasonable legal fees and costs of such patent
prosecution and maintenance for the Licensed Patent Rights in the Field while
this Agreement remains in effect. Prior to any period during the term of this
Agreement in which Apollo intends to pursue independent development of an
Acute Formulation under Section 3.2 above, or sublicenses or otherwise
exploits the Licensed Patent Rights outside the Field, Apollo and Athena
shall discuss in good faith and agree on a reasonable allocation of patent
costs for the Licensed Patent Rights within the Field and outside the Field.
Such costs within the Field shall continue to be Athena's responsibility as a
part of its Development Funding. Apollo shall pay or cause to be paid such
costs outside the Field, and such payment is not to be included in Apollo's
Development Funding.
-10-
9.2 NOTIFICATION OF INFRINGEMENT. Each party shall notify the other
party of any infringement of the Licensed Patent Rights in the Territory
known to such party and shall provide the other party with the available
evidence, if any, of such infringement.
9.3 ENFORCEMENT OF THE LICENSED PATENT RIGHTS. Apollo shall have the
right to determine the appropriate course of action to enforce Licensed
Patent Rights in the Territory or otherwise abate the infringement thereof,
to take (or refrain from taking) appropriate action to enforce Licensed
Patent Rights, to control any litigation or other enforcement action (in its
own name or, if required by applicable law, jointly with Athena) and to enter
into, or permit, the settlement of any such litigation or other enforcement
action with respect to Licensed Patent Rights, and shall consider, in good
faith, the interests of Athena in so doing. If Apollo does not, within ninety
(90) days of receipt of written notice regarding a potential infringement,
abate the infringement or file suit to enforce the Licensed Patent Rights
against at least one infringing party in the Territory, or otherwise dispose
of the matter, Athena shall have the right to take whatever action it deems
appropriate to enforce the Licensed Patent Rights; provided, however, that,
within thirty (30) days after receipt of notice of Athena's intent to file
such suit, Apollo shall have the right to jointly prosecute such suit and in
so doing, to fund fifty percent (50%) of the costs of such suit. The party
controlling any such enforcement action shall not settle the action or
otherwise consent to an adverse judgment in such action that diminishes the
rights or interests of the non-controlling party without the prior written
consent of that party. All monies recovered upon the final judgment or
settlement of any such suit to enforce the Licensed Patent Rights shall be
shared, after reimbursement of expenses, by Apollo and Athena PRO RATA
according to the respective percentages of costs borne by each in such suit.
Notwithstanding the foregoing, Apollo and Athena shall fully cooperate with
each other in the planning and execution of any action to enforce the
Licensed Patent Rights and execute all such documents as reasonably necessary
in connection therewith. If Apollo or Athena is a necessary party to any such
litigation or other enforcement action, at the other party's request and
expense. such party shall join such litigation or other enforcement action.
9.4 IMPROVEMENTS. If either party's tests, experiments and evaluation
under this Agreement result in an invention, discovery, improvement or other
technology, whether patentable or not (an "Improvement"), ownership of such
Improvement shall be determined according to U.S. patent law. Either party
which owns any rights in an Improvement shall cross-license its interest to
the other party, without additional cost or royalty, to the extent necessary
for the other to practice and use its rights in the Licensed Technology as so
improved. Each party shall promptly disclose to the other all such
Improvements.
9.5 INFRINGEMENT ACTIONS BY THIRD PARTIES. (a) If either party or any
of its Affiliates, sublicensees or customers shall be sued (or suit
threatened in writing) by a third party for infringement of a third party's
patent in the Territory because of the use of Licensed Technology or sale of
Products, such party shall promptly notify the other in writing of the
institution of such suit or threat. (b) Before actual suit is brought, and
after consulting with and considering in good faith the interests of Apollo,
Athena may determine, in its sole discretion, to pay any amount it deems
reasonable or necessary to make, use or sell a Product, to obtain a license
to do so or to compromise or settle a claim of infringement. (c) If such
threat or claim is not
-11-
settled and suit is brought, and the alleged infringing process, method or
composition is claimed under the Licensed Patent Rights, Athena shall have
the right, in its sole discretion, to control the defense of such suit at its
own expense, in which event Apollo shall have the right to be represented by
advisory counsel of its own selection, at its own expense, and shall
cooperate fully in the defense of such suit and furnish to Athena all
evidence and assistance in its control. If Athena does not elect within sixty
(60) days after such notice to so control the defense of such suit, Apollo
may undertake such control at its own expense, and Athena shall then have the
right to be represented by advisory counsel of its own selection, at its own
expense, and Athena shall cooperate fully in the defense of such suit and
furnish to Apollo all evidence and assistance in Athena's control. The party
controlling the suit shall regularly consult with and consider the interests
of the other, and may not settle any part of the suit or otherwise consent to
an adverse judgment in such suit that diminishes the rights or interests of
the non-controlling party without the express written consent (not to be
unreasonably withheld) of the non-controlling party. (d) Any amounts paid by
Athena under the provisions of paragraphs (b) or (c) above, or by Apollo
under paragraph (c) above, shall be included in such party's Development
Funding for the period when actually paid.
ARTICLE 10. CONFIDENTIALITY:
10.1 CONFIDENTIAL INFORMATION. Except as necessary to carry out Section
9.4 above, this Agreement and its performance by the parties shall be subject
to the confidentiality agreement between Apollo and Athena dated as of
February 5, 1995 and a confidentiality agreement between Apollo, Athena and
Eli Lilly and Company dated as of February 14, 1996, which both remain in
full force and effect and are incorporated by this reference, except that
Apollo and Athena hereby agree that any Information other than that which is
covered by Section 4.1(a) above, (including without limitation Information
exchanged or obtained in the performance of this Agreement) shall be
maintained by each of them as confidential for a period of five (5) years
from the date of expiration or termination of this Agreement, on the terms
described in that February 14, 1996 agreement.
ARTICLE 11. TERMINATION:
11.1 EXPIRATION. Unless terminated earlier pursuant to this Article,
the Agreement shall expire, with respect to each country within the
Territory, on the date which is ten (10) years from the date of this
Agreement, unless a patent based on a Valid Patent Claim has been issued
having effect in such country, in which case this Agreement shall expire in
such country upon the expiration of such patent. Upon expiration of the
Agreement with respect to such country pursuant to this Section, Athena shall
have a fully-paid, irrevocable license under the Licensed Know-How, with
right of sublicense, to make, have made, use and sell Products in such
country for use in the Field.
11.2 TERMINATION BY ATHENA. Athena may terminate the Agreement at any
time, in its sole discretion, upon ninety (90) days' prior written notice to
Apollo. Any such termination will not affect Athena's obligations to pay
royalties accrued to the effective date of such termination under Section 5.2
above.
-12-
11.3 TERMINATION FOR CAUSE. (a) Apollo may terminate this Agreement
after the breach of any material provision by Athena if Athena has not cured
such breach within ninety (90) days after written notice thereof by Apollo.
(b) Athena may terminate the Agreement after the breach of any material
provision by Apollo if Apollo has not either (i) cured such breach within
ninety (90) days after written notice thereof by Athena, or (ii) begun good
faith remedial action within such ninety (90) day period and accomplished
such cure no later than six (6) months after Athena's written notice of
breach. Any such termination will not affect Athena's obligations to pay
royalties accrued to the effective date of such termination under Section 5.2
above. Athena retains all rights of setoff in such event.
11.4 EFFECT OF EXPIRATION OR TERMINATION. In the event of termination
under 11.2 or 11.3(a) above, all rights in the Licensed Technology shall
revert to and be owned exclusively by Apollo. In the event of termination by
Athena under Section 11.3(b) above, Athena may at its option elect to retain
a perpetual, fully-paid license to the Licensed Technology for the Field in
the Territory, upon the other terms contained in this Agreement. Expiration
or termination of the Agreement shall not relieve either party of any
obligation accruing prior to such expiration or termination, and the
provisions of Articles 4, 9.4, l0, 11, and 12 shall survive the expiration or
termination of the Agreement.
ARTICLE 12. INDEMNIFICATION AND INSURANCE:
12.1 INDEMNIFICATION. Each party shall indemnify and hold the other
harmless from all losses, liabilities, damages and expenses, including
reasonable attorneys' fees and costs (collectively, "Liabilities"), that the
other party may suffer as a result of any claims, demands, actions or other
proceedings made or instituted by any third party arising out of or relating
to the gross negligence or willful misconduct of the indemnifying party, its
Affiliates or sublicensees.
12.2 PROCEDURE. A party which intends to claim indemnification under
this Article shall promptly notify the other party of any Liability or action
in respect of which such party intends to claim such indemnification, and the
indemnifying party shall have the right to participate in, and, to the extent
so desired, assume the defense thereof; provided, however, that the claiming
party shall have the right to retain its own counsel, if representation of
the claiming party by the counsel retained by the.indemnifying party would be
inappropriate due to actual or potential conflicts of interest. Without the
prior written consent of the claiming party, the indemnifying party may not
settle or otherwise consent to an adverse judgment in respect to a Liability
if doing so would diminish the rights or interests of the claiming party.
Each party shall cooperate fully with the other in the investigation of any
action, claim or Liability covered by this Article.
12.3 INSURANCE. Athena shall, at its expense (provided such expense is
reasonable for additional coverage of this type), cause Apollo to be named as
an additional named insured under any policy of products liability insurance
which Athena may carry from time to time, and will cause certificates of
insurance to be provided to Apollo upon reasonable request.
-13-
ARTICLE 13. FORCE MAJEURE:
13.1 EXCUSED PERFORMANCE. Neither party shall be held liable or
responsible to the other party nor be deemed to have defaulted under or
breached this Agreement for failure or delay in fulfilling or performing any
term of the Agreement to the extent, and for so long as, such failure or
delay is caused by or results from causes beyond the reasonable control of
the affected party, including but not limited to fire, floods, embargoes,
war, acts of war (whether war be declared or not), insurrections, riots,
civil commotions, strikes, lockouts or other labor disturbances, acts of God
or acts, omissions or delays in acting by any governmental authority.
ARTICLE 14. MISCELLANEOUS:
14.1 NOTICES. Any consent, notice or report required or permitted to be
given or made under this Agreement shall be in writing, delivered personally,
by air mail or courier, or by facsimile promptly confirmed by personal
delivery, air mail or courier, postage prepaid, addressed to such other party
at its address indicated below, or to such other address as the addressee
shall have last furnished in writing to the addressor and (unless otherwise
provided in the Agreement) shall be effective upon receipt by the addressee.
If to Apollo: Apollo Genetics, Inc.
222 Third Street, Suite 2110
Cambridge, Massachusetts 02142
Attention: President
If to Athena: Athena Neurosciences, Inc.
800 Gateway Boulevard
South San Francisco, California 94080
Attention: General Counsel
14.2 ARBITRATION. All disputes arising under the Agreement shall be
referred to senior management of the parties for good faith discussion, and
if not so resolved, finally settled by arbitration in Boston, Massachusetts,
under the applicable rules of the American Arbitration Association. The
parties shall agree in their discretion on a single arbitrator or, if no
agreement can be reached within fourteen (14) days of the request by one
party, each party shall appoint an arbitrator and the two so chosen shall
appoint a third. Each party shall pay the expenses of its own counsel and, if
applicable, its chosen arbitrator, and shall share equally the expenses of
the single or third arbitrator. The arbitration award or judgment shall be
final, binding and enforceable, and may include an award of fees and expenses
(including reasonable attorneys' fees). The arbitrator(s) shall not have the
authority to modify, change or refuse to enforce the terms of this Agreement.
14.3 ASSIGNMENT. Neither party may assign its rights or obligations
under the Agreement, in whole or in part, by operation of law or otherwise,
without the prior written . consent of the other; provided, however, that
either may, without such consent, assign the Agreement and its rights and
obligations hereunder to an Affiliate (without diminishing the
-14-
continuing obligations of the assignor hereunder), or in connection with the
transfer or sale of all or substantially all of its business, or in the event
of its merger or consolidation. Any purported assignment in violation of this
Section 14.3 shall be void.
14.4 AMENDMENTS. No change, modification, extension, termination or
waiver of any of the provisions of this Agreement shall be valid unless made
in writing and signed by duly authorized representatives of the party or
parties to be bound.
14.5 ENTIRE AGREEMENT. The Agreement embodies the entire understanding
between the parties respecting the subject matter hereof and supersedes any
prior understanding and agreements between them respecting the subject matter
hereof. Except for the Confidentiality Agreements described in Section 10.1
above, there are no representations, agreements, arrangements or
understandings, oral or written, between the parties hereto relating to the
subject matter of the Agreement which are not fully expressed herein.
14.6 SEVERABILITY. Any of the provisions of the Agreement which are
determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to that extent in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof and without affecting the
validity or enforceability of any of the terms of the Agreement in any other
jurisdiction.
14.7 WAIVER. The waiver by either party of any right hereunder, or the
failure to perform or of a breach by the other party, shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
party, whether of a similar nature or otherwise.
14.8 COUNTERPARTS. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.9 NO ANNOUNCEMENT. Neither party shall make any oral or written
statement, press release, publication, publicity or other public
communication using the name of the other party or any of its Affiliates, or
regarding the fact of or terms of this Agreement, without the prior written
consent of the other party in its sole discretion; except for legally
required disclosures, as to which consent may not be unreasonably withheld.
-15-
IN WITNESS WHEREOF, the parties have executed this Agreement as of April
16, 1996.
ATHENA NEUROSCIENCES, INC.
Date: 10/14/96 By: /s/ Donald R. Joseph
-------- ---------------------------------------
Name: Donald R. Joseph
-------------------------------------
Title: Vice President & General Counsel
------------------------------------
APOLLO GENETICS, INC.
Date: 10/10/96 By: /s/ Katherine Gordon
-------- ---------------------------------------
Name: Katherine Gordon
-------------------------------------
Title: President
------------------------------------
-16-
License and Collaboration Agreement CONFIDENTIAL
April 6, 1996
EXHIBIT A
United States and Foreign Patents and/or Applications
Country/Region Patent/Serial Number Filing Date Title Status
- -------------- -------------------- ----------- ----- -------
[ * ]
[ * ]
* Confidential treatment has been requested for marked portion