Document:

Exhibit 10.1

 

FORM OF INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of               , between Minerva Neurosciences, Inc., a Delaware corporation (the “Company”), and               (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities.  Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions.  At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself.  The Amended and Restated By-laws of the Company (the “By-laws”) and the Amended and Restated Certificate of Incorporation of the Company (as amended from time to time, the “Certificate of Incorporation”) require indemnification of the directors of the Company.  Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”).  The By-laws and Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the By-laws and Certificate of Incorporation of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee

 

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thereunder;

 

WHEREAS, Indemnitee does not regard the protection available under the Company’s By-laws and Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be willing to serve as a director without adequate protection, and the Company desires Indemnitee to serve in such capacity.  Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and

 

WHEREAS, Indemnitee may have certain rights to indemnification and/or insurance provided by [Care Capital, LLC] [Index Ventures], (“Fund”), which Indemnitee and Fund intend to be secondary to the primary obligation of the Company to indemnify Indemnitee as provided herein, with the Company’s acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve on the Board.

 

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director from and after the date hereof, the parties hereto agree as follows:

 

1.                                      Indemnity of Indemnitee.  The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time.  In furtherance of the foregoing indemnification, and without limiting the generality thereof:

 

(a)                                 Proceedings Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company.  Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

 

(b)                                 Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company.  Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

 

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(c)                                  Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

2.                                      Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee.  The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.

 

3.                                      Contribution.

 

(a)                                 Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee.  The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

(b)                                 Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand,

 

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and Indemnitee, on the other hand, from the transaction or events from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered.  The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

(c)                                  The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

(d)                                 To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

4.                                      Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

5.                                      Advancement of Expenses.  Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.  Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

 

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6.                                      Procedures and Presumptions for Determination of Entitlement to Indemnification.  It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware.  Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

 

(a)                                 To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.  Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

 

(b)                                 Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board:  (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, (3) if there are no disinterested directors or if the disinterested directors so direct, by Independent Counsel (as hereinafter defined) in a written opinion to the Board, a copy of which shall be delivered to, and may be relied upon or otherwise used by, the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company.  For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee.

 

(c)                                  If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c).  The Independent Counsel shall be selected by the Board.  Indemnitee may, within 10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by

 

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the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof.  The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d)                                 In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.  Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(e)                                  Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(f)                                   If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the

 

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Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

 

(g)                                  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(h)                                 The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty.  In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(i)                                     The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

7.                                      Remedies of Indemnitee.

 

(a)                                 In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not

 

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made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification.  Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a).  The Company shall not oppose Indemnitee’s right to seek any such adjudication.

 

(b)                                 In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

 

(c)                                  If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)                                 In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e)                                  The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.  The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

(f)                                   Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

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8.                                      Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

 

(a)                                 The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote of stockholders, a resolution of directors of the Company, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation, By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                                 To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

(c)                                  The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by Fund and certain of its affiliates (collectively, the “Fund Indemnitors”).  The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Certificate of Incorporation or Bylaws of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and, (iii)  that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has

 

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sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.  The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 8(c).

 

(d)                                 Except as provided in paragraph (c) above, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (other than against the Fund Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(e)                                  Except as provided in paragraph (c) above, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

(f)                                   Except as provided in paragraph (c) above, the Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

 

9.                                      Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

(a)                                 for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision, provided, that the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors set forth in Section 8(c) above; or

 

(b)                                 for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or

 

(c)                                  in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

 

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10.                               Duration of Agreement.  All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

 

11.                               Security.  To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

 

12.                               Enforcement.

 

(a)                                 The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director of the Company.

 

(b)                                 This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

 

(c)                                  The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.

 

13.                               Definitions.  For purposes of this Agreement:

 

(a)                                 “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

 

(b)                                 “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(c)                                  “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or

 

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was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

 

(d)                                 “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent.  Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(e)                                  “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(f)                                   “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of his or her Corporate Status, by reason of any action taken by him or of any inaction on his part while acting in his or her Corporate Status; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

 

14.                               Severability.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.  Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws.  In the event any

 

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provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

15.                               Modification and Waiver.  No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

16.                               Notice By Indemnitee.  Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder.  The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

 

17.                               Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent:

 

(a)                                 To Indemnitee at the address set forth below Indemnitee signature hereto.

 

(b)                                 To the Company at:

 

Minerva Neurosciences, Inc.

245 First Street

Suite 1800

Cambridge, MA 02142

 

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

18.                               Counterparts.  This 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 Agreement.  This Agreement may also be executed and delivered by facsimile signature and 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.

 

19.                               Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

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20.                               Governing Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

 

	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
MINERVA   NEUROSCIENCES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
 
    
	
 
    	
Address:
    

 

15Exhibit 10.2

 

A request for confidential treatment has been made with respect to portions of the following document that are marked with [*]. The redacted portions have been filed separately with the SEC.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (hereinafter referred to as “Agreement”) dated as of 30 August, 2007 (hereinafter referred to as “Effective Date”), is entered into between Cyrenaic Pharmaceuticals, Inc., a Delaware corporation, having a place of business located at 47 Hulfish Street, Suite 310 Princeton NJ 08542, the U.S. (hereinafter referred to as “LICENSEE”) and Mitsubishi Pharma Corporation, a Japanese corporation, having a place of business located at 6-9, Hiranomachi 2-chome, Chuo-ku, Osaka 541-0046, Japan (hereinafter referred to as “MPC”).

 

WITNESSETH:

 

WHEREAS, MPC is the owner of the patents, patent applications and other intellectual property relating to a certain pharmaceutical compound coded as MT-210;

 

WHEREAS, LICENSEE desires to obtain an exclusive license, with a right to grant sublicenses, under the MPC Intellectual Property (hereinafter defined); and

 

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

 

ARTICLE 1
 DEFINITIONS

 

For purposes of this Agreement, the terms defined in this Article 1 shall have the respective meanings set forth below, it being understood that words in the singular include the plural and vice versa:

 

1.1                               “Affiliate” shall mean any person, corporation, joint venture or business entity of such party which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such party, as the case may be. As used herein, “control” means (a) to possess, the power to direct the management or policies of such company

 

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or other business entity, through ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) direct or indirect beneficial ownership of more than fifty percent (50%) of the voting share capital in such company or other business entity.

 

1.2                               “Allocable Overhead” shall mean costs incurred by a Party or for its account (and not reimbursed by a Third Party) which are attributable to its supervisory, services, occupancy costs, payroll, information systems, human relations or purchasing functions and which are allocated to company departments involved in and relevant to the subject matter of this Agreement, based on space occupied, headcount, or activity-based method, in all cases as determined by such Party in accordance with GAAP (hereinafter defined). “Allocable Overhead” shall not include any costs attributable to general corporate activities including, by way of example only, executive management, investor relations, business development, legal, finance and government affairs, and shall not include any costs or expenses which are reimbursed by the other Party or any Third Party.

 

1.3                               “Alternate Compound” shall mean a Back-Up Compound or a Metabolite.

 

1.4                               “Application” shall mean a New Drug Application (“NDA”) submitted (and the submission of which has been accepted) with the Food and Drug Administration (“FDA”) in the United States or a corresponding application for commercial sales which has been submitted (and the submission of which has been accepted for review) with a regulatory agency in a country of the LICENSEE Territory other than the United States, in each case for the Product in the Field.

 

1.5                               “Back-Up Compound” shall mean (i) compounds described in the examples and included in the Valid Claim of MPC’s patent (U.S. patent No. 7166617) except for the MT-210

 

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A request for confidential treatment has been made with respect to portions of the following document that are marked with [*]. The redacted portions have been filed separately with the SEC.

 

Compound (hereinafter defined) and (ii) compound coded as BFB-484 which chemical structure is set forth in Schedule 1.5.

 

1.6                               “Bulk Drug Substance” shall mean the Compound in bulk form, which if appropriately formulated and finished, would constitute the Product.

 

1.7                               “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

1.8                               “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

 

1.9                               “Clinical Studies” shall mean Phase I Studies, Phase II(a) Studies, Phase II(b) Studies, and Phase III Studies.

 

1.10                        “CNS Indication” shall mean Schizophrenia and all other CNS diseases including, but not limited to, psychotic disorders, depression, anxiety, sleep disorders, pain, dementia, Alzheimer disease, cognitive disorders and attention disorders (ADHD).

 

1.11                        “Commercially Reasonable Efforts” shall mean efforts and resources normally used by a Party for a product owned by it or to which it has exclusive rights, which is of similar market potential at a similar stage in its development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory and reimbursement structure involved, the profitability of the applicable products, and other relevant factors.

 

1.12                        “Competing Product” shall mean any prescription pharmaceutical product of which shall have the same indication of the Product and the same sigma-2 mechanism of action.

 

1.13                        “Compound” shall mean (i) compound known as MT-210 with the chemical name [*] having the molecular structure set forth in Schedule 1.13 (hereinafter referred to as the “MT-

 

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210 Compound”), (ii) any solvate, salt form, enantiomers, racemate, w-crystal, anhydride, hydrate, polymorph or amorphous of the MT-210 Compound (an “MT-210 Back-Up”), (iii) any Back-Up Compound, and (iv) any Metabolite.

 

1.14                        “Development Work” shall mean all works to be performed by or on behalf of LICENSEE, its Affiliates and/or sublicensees, under appropriate support, if requested by LICENSEE, its Affiliates and/or sublicensees, to be provided by FORENAP, to obtain the data and information necessary or useful for the Registration and future commercial operation of the Product, including all necessary pre-clinical, clinical studies and formulation development and manufacturing of the Compound and/or Product.

 

1.15                        “Development Plan” shall mean LICENSEE’s and/or Affiliate’s and/or its sublicensee’s development plan for the Compound and Product with timeline. The initial Development Plan is set forth on Schedule 1.15.

 

1.16                        “Effective Date” shall have the meaning set forth in the introductory paragraph of this Agreement.

 

1.17                        “European Country” shall mean a country which is a member of the European Union as of the Effective Date, or which join the European Union after the Effective Date.

 

1.18                        “Excluded Compounds” shall mean the following compounds: BFB-484, BFB-687, BFB-512, BFB-462 which chemical structures are set forth in Schedule 1.18, and M1, M2, M3 and M4 as defined in Section 1.33.

 

1.19                        “Field” shall mean the use of the Product in humans to treat, manage or prevent CNS Indications. Non-systemic ophthalmic use of the Product shall be specifically excluded from the Field.

 

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1.20                        “FORENAP” shall mean FORENAP PHARMA EURL, having its registered offices at 27 rue du 4ème RSM - B.P. 27, 68250 Rouffach, France.

 

1.21                        “Fully Burdened Manufacturing Cost” shall mean the cost of production of the Compound or the Product, comprised of the sum of: (a) the manufacturing cost of goods produced as determined in accordance with GAAP as applied by the manufacturer of such Compound or Product including, without limitation, direct labor, material and product testing costs incurred in connection with the manufacture or quality control testing of such product, as well as Allocable Overhead and shipping containers, (b) the manufacturer’s allocable intellectual property licensing and acquisition costs paid to Third Parties which are necessary for the manufacture of such Compound or Product and (c) any other costs borne by the manufacturer for the transport, customs clearance and storage of such Compound or Product (if necessary) at the request of LICENSEE or its Affiliates or sublicensees (i.e., freight, duty, insurance, and warehousing).

 

1.22                        “GAAP” shall mean generally accepted accounting principles in the United States.

 

1.23                        “Generic Competition” shall mean, with respect to a particular country in the LICENSEE Territory where LICENSEE, its Affiliate or its sublicensee is selling Product, a Third Party, other than a sublicensee of LICENSEE, is selling a Generic Drug in such country and the average Net Sales in such country for two (2) consecutive Calendar Quarters immediately or at any time after the launch of such Generic Drug in such country is [*] or less than the average Net Sales for the two (2) consecutive Calendar Quarters immediately prior to the launch of such Generic Drug in such country, despite LICENSEE, its Affiliate and/or its

 

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sublicensee using Commercially Reasonable Efforts to market and sell the Product in such country.

 

1.24                        “Generic Drug(s)” shall mean any product containing Compound for which Registration is obtained by an abbreviated NDA (“ANDA”) or other abridged procedure in the United States or a corresponding application in any country of the LICENSEE Territory, other than a Product introduced in such country by LICENSEE, its Affiliates or its sublicensees.

 

1.25                        “IND” shall mean an Investigational New Drug filed with FDA in the United States or a corresponding application filed with a regulatory agency with respect to development of a Product in the Field.

 

1.26                        “Know-How” shall mean any proprietary, non-public information or materials, relating to the research, development, registration, manufacture, marketing, use or sale of the Compound and/or Product which prior to or during the term of this Agreement are developed by or is in a Party’s possession or control through license or otherwise (provided that such Party is permitted to make disclosure thereof to the other Party without violating the terms of any Third Party agreement). Know-How may include, without limitation: (i) all biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety and quality control data and information related to the Compound and/or Product; (ii) compositions of matter, assays and biological materials, necessary or useful for development, manufacture, use or sale of the Compound and/or Product; (iii) data and information necessary for manufacturing the Compound and/or Product; and (iv) all applications, registrations licenses, authorizations, approvals and correspondences submitted to or received from any regulatory authorities with jurisdiction over an investigational drug containing the Compound and/or Product.

 

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A request for confidential treatment has been made with respect to portions of the following document that are marked with [*]. The redacted portions have been filed separately with the SEC.

 

1.27                        “Launch” shall mean, with respect to any Product after Registration, the first sale to a Third Party by LICENSEE, its Affiliate or its sublicensees of that Product in such country. Sales for test marketing, clinical study purposes or compassionate, named patient or similar use shall not constitute a sale.

 

1.28                        “LICENSEE Intellectual Property” shall mean all intellectual property and proprietary rights in (i) all LICENSEE Patents and (ii) all LICENSEE Know-How.

 

1.29                        “LICENSEE Know-How” shall mean any Know-How owned or controlled by LICENSEE and/or its Affiliates that is developed by LICENSEE or its Affiliates after the Effective Date in connection with its performance of its activities under this Agreement.

 

1.30                        “LICENSEE Patents” shall mean any Patent Right owned or controlled by LICENSEE or its Affiliate, to the extent such Patent Right both (a) covers a Compound or Product and (b) the underlying invention of which was conceived and reduced to practice after the Effective Date by LICENSEE in connection with its performance of its activities under this Agreement.

 

1.31                        “LICENSEE Territory” shall mean all countries in the world, excluding the MPC Territory.

 

1.32                        “Major Countries” shall mean the United States, Canada, the United Kingdom, Germany, France, Italy and Spain.

 

1.33                        “Metabolite” shall mean the following metabolites of the MT-210 Compound: (a) M1 coded as BFB-520; (b) M2 coded as BFB-999; (c) M3; and (d) M4 which chemical structures are set forth in Schedule 1.33.

 

1.34                        “MPC Intellectual Property” shall mean all intellectual property and proprietary rights in (i) all MPC Patents and (ii) all MPC Know-How.

 

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1.35                        “MPC Know-How” shall mean Know-How owned or controlled by MPC and/or its Affiliates.

 

1.36                        “MPC Patents” shall mean any Patent Right owned or controlled by MPC and/or its Affiliates during the term of this Agreement which relates to Compound or Product, and, absent rights hereunder, would be infringed by the research, development, manufacture, use, importation, sale or offer for sale of the Compound and/or Product, including the Patent Rights listed on Schedule 1.36, and any patents that may issue from, or claim priority to or through, the applications listed on Schedule 1.36.

 

1.37                        “MPC Territory” shall mean Bangladesh, Brunei, India, Indonesia, Japan, Malaysia, Pakistan, People’s Republic of China (including Hong Kong), Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam.

 

1.38                        “Net Sales” shall mean, with respect to any Product, the aggregate gross amount invoiced by LICENSEE or its Affiliates or sublicensees on all sales of such Product in the LICENSEE Territory to an unaffiliated Third Party, less reasonable and customary deductions from such gross amounts, including:

 

1.38.1              bad debts actually written off which are attributable to sales of the Product;

 

1.38.2              credits or allowances for damaged goods, returns or rejections or recalls of Product and shelf stock and other retroactive price adjustments;

 

1.38.3              normal and customary trade, cash, quantity and volume based discounts, allowances and credits;

 

1.38.4              sales or similar taxes (other than income taxes);

 

1.38.5              freight, postage, shipping, insurance charges;

 

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A request for confidential treatment has been made with respect to portions of the following document that are marked with [*]. The redacted portions have been filed separately with the SEC.

 

1.38.6              chargebacks and rebates to managed healthcare organizations or to federal, state and local governments, their agencies, or to trade customers, including without limitation, wholesalers and chain pharmacy buying groups;

 

1.38.7              inventory management, distribution, warehousing, and related services fees, and

 

1.38.8              any other reduction or specifically identifiable amounts included in the invoice price that should be credited for any reasons substantially equivalent to those listed above.

 

Each of the deductions set forth above shall be determined on an accrual basis in accordance with GAAP. To the extent that any discounts or other similar deductions that are based on sales to the customer of multiple products are included in determining Net Sales of the Product, such discounts or deductions shall be allocated to the Product and the other relevant products on a pro rata basis.

 

1.39                        “Onset” shall mean the first dosing of the first patient in a Clinical Study.

 

1.40                        “Party” shall mean one of MPC and LICENSEE, as appropriate. Where used in the plural, “Parties” shall mean MPC and LICENSEE.

 

1.41                        “Patent Rights” shall mean (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents and design patents and certificates of invention, (d) any

 

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and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any such foregoing patent applications and patents.

 

1.42                        “Person” shall mean an individual, corporation, partnership, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

1.43                        “Phase I Studies” shall mean that portion of the clinical development program which provides for the first introduction into humans of a Product including small scale clinical studies conducted in normal volunteers or patients to get information on Product safety.

 

1.44                        “Phase II(a) Studies” shall mean that portion of the clinical development program which provides for the initial trials of a Product on a limited number of patients for the purpose of determining whether the Product affects a surrogate marker or indicator of pharmacological or clinical activity in the proposed disease state/therapeutic indication.

 

1.45                        “Phase II(b) Studies” shall mean that portion of the clinical development program carried out either post-Phase II(a) Studies or concurrently with Phase II(a) Studies and which provides information for the definitive, well controlled clinical trials of a Product in patients, including clinical studies conducted in patients and designed to indicate clinical efficacy for the Product for one or more indications and its safety, as well as to obtain an indication of the dosage regimen required.

 

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1.46                        “Phase II Studies” shall mean Phase II(a) Studies and Phase II(b) Studies.

 

1.47                        “Phase III Studies” shall mean large scale clinical studies conducted in a sufficient number of patients to establish the Product clinical efficacy in the Field and its safety.

 

1.48                        “Proprietary Information” shall mean any and all scientific, clinical, regulatory, marketing, financial and commercial information or data, whether communicated in writing, orally or by any other means, which is owned and/or under the protection of one Party and is being provided by that Party to the other Party in connection with this Agreement.

 

1.49                        “Product” shall mean a pharmaceutical preparation containing Compound which has been manufactured into an oral dosage form (including sustained release formulation), injectable formulation or any other formulation, packaged and labeled for administration in the Field. Combination product may be included in this defined term of “Product”, provided, however, that calculation method of Net Sales of the combination product shall be separately agreed upon between the Parties.

 

1.50                        “Royalty Period” shall mean the period, on a country-by-country and Product-by-Product basis, until the later of: (a) the expiration of the last-to-expire Valid Claim covering such Product in such country or; (b) twelve (12) years from the Launch of such Product in such country of the LICENSEE Territory.

 

1.51                        “Royalty Year” shall mean (i) for the year in which the Launch occurs (the “First Royalty Year”), the period commencing with the first day of the Calendar Quarter in which the Launch occurs and expiring on the last day of the Calendar Year in which the Launch occurs and (ii) for each subsequent year, each successive Calendar Year.

 

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1.52                        “Registration(s)” shall mean, in relation to any Product, such authorizations of the regulatory authorities in a given country (including marketing, marking and pricing approvals) as may be legally required before such Product may be commercialized or sold in such country.

 

1.53                        “Steering Committee” shall mean a committee established by the Parties subject to Section 4.3.1 to coordinate, review and assess the development of Product, to harmonize worldwide objectives for Product and, after MPC decides to initiate clinical develompent in the MPC Territory, to facilitate the transfer of data and regulatory communications, including the handling and reporting of adverse events, between the Parties.

 

1.54                        “Territory” shall mean the LICENSEE Territory or the MPC Territory, as applicable.

 

1.55                        “Third Party” shall mean any person or entity other than MPC, LICENSEE, or an Affiliate of either Party.

 

1.56                        “Valid Claim” shall mean a claim within the MPC Patents (a) in an unexpired and issued patent that has not been revoked, held invalid, declared unpatentable or unenforceable by a body of competent jurisdiction and (b) that has not been rendered unenforceable through disclaimer or otherwise.

 

ARTICLE 2
 GRANT OF LICENSE

 

2.1                               License Grant to LICENSEE. MPC hereby grants to LICENSEE and its Affiliate an exclusive license (even as to MPC) under the MPC Intellectual Property to develop, have developed, register, have registered, make, have made, use, have used, sell, offer for sale, have sold, import and have imported Product in the Field for purposes of commercialization in the LICENSEE Territory.

 

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2.2                               Compound Manufacturing Right. MPC hereby grants to LICENSEE and its Affiliate under the MPC Intellectual Property (a) a semi-exclusive license, with the right to sublicense, to make and have made Compound in the LICENSEE Territory solely for purposes of researching, developing and/or commercializing Product in the LICENSEE Territory; it being understood that such semi-exclusive license will allow MPC the right to make and have made Compound in the LICENSEE Territory solely for purposes of researching, developing and/or commercializing Product in the MPC TERRITORY and (b) a non-exclusive license, with the right to sublicense, to make and have made Compound in the MPC Territory solely for the purposes of researching, developing and/or commercializing Product in the LICENSEE TERRITORY.

 

2.3                               Sublicense Rights. LICENSEE and its Affiliate shall have the right to grant sublicenses under all or part of the licenses granted under Sections 2.1 and 2.2; provided, however, prior to sublicensing such rights, LICENSEE shall provide MPC with the opportunity to negotiate terms under which MPC would collaborate in or obtain a license for research, development and/or commercialization of the Compound and/or Product in the LICENSEE Territory (a “Right of First Negotiation”). A Right of First Negotiation shall operate as follows:

 

2.3.1                     LICENSEE shall promptly notify MPC in writing (the “Right of First Negotiation Notification”) of its intention to enter into a sublicensing arrangement for the research, development and/or commercialization of the relevant Compound and/or Product and shall provide to MPC a reasonably detailed written description of such proposed sublicense, together with any data, results materials or information related to such Compound and/or Product which LICENSEE reasonably believes is necessary and useful for evaluation of an interest in participating in such proposed sublicense by MPC and has not previously been provided to MPC.

 

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2.3.2                     Within ten (10) business days of its receipt of the Right of First Negotiation Notification (the “Response Period”), MPC shall notify LICENSEE of its interest, if any, in initiating discussions regarding such proposed sublicense.

 

2.3.3                     In the event that MPC notifies LICENSEE prior to the termination of the Response Period that it has an interest in participating in such proposed sublicense (an “Expression of Interest”), then the Parties shall negotiate in good faith in an effort to reach a definitive agreement regarding such sublicense for a period of up to sixty (60) days from the date of LICENSEE’s receipt of the Expression of Interest; provided that, at MPC’s option, the negotiation period may be extended one time for an additional sixty (60) days.

 

2.3.4                     In the event that (a) MPC fails to notify LICENSEE prior to the termination of the Response Period that it has an interest in participating in such proposed sublicense, or (b) MPC notifies the LICENSEE prior to the termination of the Response Period that it has no interest in such sublicense, or (c) MPC timely provides LICENSEE with an Expression of Interest but MPC decides and notifies LICENSEE not to continue negotiation regarding such sublicense within the period specified in Section 2.3.3, then LICENSEE shall be free to enter into a sublicense with a Third Party with respect to such Compound and/or Product and the terms of any such sublicense agreement shall not be inconsistent with terms and conditions set forth in this Agreement.

 

2.3.5                     For the duration of the Response Period, and if MPC timely delivers the Expression of Interest, the sixty (60) day period specified in Section 2.3.3, and additional sixty (60) days period specified in Section 2.3.3 if the Parties continue the negotiation regarding such sublicense, LICENSEE shall not negotiate such sublicense arrangement with a Third Party, nor enter into any agreements with such Third Party or propose terms to such Third Party.

 

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2.4                               License Grant to MPC. LICENSEE or its Affiliate shall grant to MPC and its Affiliate a non-exclusive and royalty-free license, with the right to grant sublicenses, under LICENSEE Intellectual Property for the purpose of developing and commercializing the Compound and/or the Product in the MPC Territory. LICENSEE or its Affiliate shall use its Commercially Reasonable Efforts to cause its sublicensees to grant to MPC and its Affiliate a non-exclusive and royalty-free license, with the right to grant sublicenses, under such sublicensee’s intellectual property for the purpose of developing or commercializing the Compound and/or the Product in the MPC Territory.

 

2.5                               First Offer to LICENSEE. For an exclusive period of sixty (60) days, MPC will first offer to and discuss with LICENSEE the licensing terms and conditions of the Compound and/or Product before entering into discussion with any Third Party in the MPC Territory. After the expiration of such 60-day period, MPC shall be free to enter into a license with a Third Party with respect to the Compound and/or Product for the MPC Territory.

 

2.6                               Outside the Field. Neither LICENSEE nor any of its Affiliates or sublicensees shall be entitled to develop, have developed, register, have registered, make, have made, use, have used, sell, offer for sale, have sold, import or have imported Compound or Product outside the Field in the LICENSEE Territory. MPC and its respective Affiliates and sublicensees shall be free to develop, have developed, register, have registered, make, have made, use, have used, sell, offer for sale, have sold, import and have imported Compound and Product for use outside the Field in the LICENSEE Territory; provided, however, that such Compound and/or Product must be formulated in a dosage and administration form that does not lead to systemic absorption.

 

2.6.1                     For each individual Compound, MPC will grant to LICENSEE exclusivity for evaluation of its interest for outside the Field applications of such Compound in the

 

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LICENSEE Territory for a period of time until the later to occur of (a) the second anniversary of the Effective Date or (b) the six month anniversary of the completion by LICENSEE of the Phase II(a) Studies with such Compound (the “Grace Period”). For the avoidance of doubt, such initial exclusivity will apply to each Compound taken individually. LICENSEE will keep MPC informed about its progress of the evaluation.

 

2.6.2                     During the Grace Period, MPC will be free to engage Third Parties in discussions regarding use of such Compound outside the Field and/or to plan and conduct research, including clinical research, in the MPC Territory only; provided that in no event during the Grace Period shall MPC be entitled to enter into a license, collaboration or similar agreement with a Third Party for such Compound. No later than thirty (30) days before the end of the Grace Period, MPC will disclose to LICENSEE the results of research and/or licensing activities conducted during the Grace Period, if any such activities were conducted. The Grace Period will continue until thirty (30) days after such disclosure has been made by MPC.

 

2.6.3                     For each individual Compound, LICENSEE will be granted a second period of exclusivity as follows when an Outside the Field Event occurs (“Second Exclusivity Period”). Upon the occurrence of an Outside the Field Event, MPC shall immediately notify LICENSEE of such event. An “Outside the Field Event” is one of the following:

 

(a)                                 Second Exclusivity Period of one hundred twenty (120) days will be granted upon receipt by LICENSEE of a written communication by MPC informing LICENSEE that MPC has received a fully-negotiated term sheet from a qualified Third Party concerning the use of such Compound outside the Field; or

 

(b)                                 Second Exclusivity Period of ninety (90) days will be granted (i) after the expiration of the Grace Period and (ii) upon receipt by LICENSEE of a written

 

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communication by MPC to LICENSEE informing LICENSEE that MPC has conducted or has plans to conduct research for use of the Compound outside the Field.

 

2.6.4                     If an Outside the Field Event occurs during the Grace Period, then the Second Exclusivity Period shall begin, in the case of Outside the Field Event (a) above, immediately upon LICENSEE’s receipt of written communication by MPC of the Outside the Field Event, and in the case of Outside the Field Event (b) above, after the Grace Period and upon LICENSEE’s receipt of written communication by MPC of the Outside the Field Event. MPC will provide LICENSEE with all data and information that LICENSEE will require to complete its assessment, including the Third Party term sheet (if one exists), MPC development plans and/or results obtained through such time.

 

2.6.5                     During the Second Exclusivity Period, LICENSEE will evaluate the information provided by MPC. At the end of the Second Exclusivity Period:

 

(a)                                 LICENSEE will have the right to purchase perpetual and exclusive evaluation rights for any use of such Compound outside the Field by paying to MPC an initial milestone of [*] before the expiration of the Second Exclusivity Period;

 

(b)                                 LICENSEE may decide that it needs more time to evaluate the potential risk, and in such an event, LICENSEE may purchase a two-year period of exclusivity for use of such Compound outside the Field by paying to MPC a milestone of [*] before the expiration of the Second Exclusivity Period. For the purpose of determining rights and obligations of both Parties during this additional exclusivity period, the two-year extension will be considered identical to the Grace Period; or

 

(c)                                  If LICENSEE notifies MPC of its commercial interest in such Compound for use outside the Field before the expiration of the Second Exclusivity Period, then

 

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the Parties shall discuss in good faith the licensing terms and conditions for use of such Compound outside the Field in the LICENSEE Territory; or

 

(d)                                 If LICENSEE fails to make the intended payment pursuant to either Section 2.6.5(a) or 2.6.5(b) and fails to notify MPC of its intention to enter into licensing discussions pursuant to Section 2.6.5(c) before the expiration of the Second Exclusivity Period, MPC shall be free to pursue use of such Compound outside the Field in the LICENSEE Territory for which it was presented to LICENSEE but not for other uses outside the Field.

 

2.6.6                     Notwithstanding the foregoing, if LICENSEE has made payments to MPC pursuant to Sections 2.6.5(a) and 2.6.5(b), collectively, four times, then from and after such fourth payment, LICENSEE will automatically receive perpetual and exclusive evaluation rights for all Compounds and for all use outside the Field.

 

ARTICLE 3
 DISCLOSURE

 

3.1                               Disclosure by MPC. Within thirty (30) days after the Effective Date, and throughout the term of this Agreement as new MPC Intellectual Property is developed, MPC shall disclose to LICENSEE any and all then-available MPC Intellectual Property, including without limitation, any regulatory filings or information related thereto, which has not already been disclosed and made available to LICENSEE or its Affiliate, on an “as-is” basis.

 

3.2                               Technical Assistance by MPC. Upon specific request from LICENSEE, MPC shall cooperate with LICENSEE and provide LICENSEE with technical assistance, to the extent such technical assistance is reasonably available to MPC, with respect to the MPC Know-How in order to enable LICENSEE to use such MPC Know-How to manufacture and produce the Compound or Product. If LICENSEE requests and MPC accepts in its sole discretion that MPC technical personnel shall be dispatched to the facilities of LICENSEE or its Affiliate or Third

 

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Party contractor for the purposes of providing such technical assistance, LICENSEE shall pay to MPC a reasonable per diem or hourly rate fee for such assistance in an amount to be negotiated in good faith by the Parties and shall reimburse MPC for the actual out-of-pocket costs incurred in providing such technical assistance.

 

3.3                               Disclosure by LICENSEE. During the term of this Agreement, LICENSEE shall disclose to MPC any and all then available LICENSEE Intellectual Property, including without limitation relevant information contained in any IND and NDA. If MPC requests and LICENSEE accepts in its sole discretion to conduct certain study or experiment to obtain certain additional data and information relating to LICENSEE Intellectual Property solely for the purpose of development and/or Application of the Product in MPC Territory specifically but such additional data and information will not be useful for the purpose of development and/or Application of the Product in LICENSEE Territory, MPC shall pay to LICENSEE a reasonable per diem or hourly rate fee for obtaining such additional data and information in an amount to be negotiated in good faith by the Parties and shall reimburse LICENSEE for the actual out-of-pocket costs incurred in providing such additional data and information.

 

3.4                               Technical Assistance by LICENSEE. Upon specific request from MPC, LICENSEE shall reasonably cooperate with MPC and provide MPC with technical assistance with respect to the LICENSEE Know-How in order to enable MPC to use such LICENSEE Know-How to manufacture and produce the Compound or Product. If MPC requests and LICENSEE accepts in its sole discretion that LICENSEE’s technical personnel shall be dispatched to the facilities of MPC, its Affiliate, its licensee or Third Party contractor for the purposes of providing such technical assistance, MPC shall pay to LICENSEE a reasonable per diem or hourly rate fee for such assistance in an amount to be negotiated in good faith by the

 

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Parties and shall reimburse LICENSEE for the actual out-of-pocket costs incurred in providing such technical assistance.

 

3.5                               Technical Transfer. Within sixty (60) days of the Effective Date, MPC shall provide to LICENSEE copies in English of all substantive or material information (in electronic format where available), relating to the following: (1) pre-clinical and clinical data and other know-how compiled as of the Effective Date with respect to the Compounds, including any and all data which MPC reasonably considers necessary for LICENSEE to file an IND with the FDA, and (2) all prior correspondence with the FDA or other regulatory equivalent for countries in the LICENSEE Territory other than the United States related to the Compound. MPC acknowledges and agrees that timing shall be of the essence in complying with its obligations under this Section 3.5. Notwithstanding anything to the contrary contained herein, if FDA or equivalent regulatory agency outside the US makes a specific request for information, MPC, as soon as practical but in no event later than 15 days after such request, must provide to LICENSEE such information, to the extent that it is or was in MPC’s possession or control at any time, and to the extent such information has not already been transferred to LICENSEE.

 

ARTICLE 4
 DEVELOPMENT; REGULATORY MATTERS;
 POST REGISTRATION ACTIVITIES

 

4.1                               Development.

 

4.1.1                     Development Work. In accordance with the Development Plan, LICENSEE, its Affiliates and its sublicensees shall, at their own expense, use Commercially Reasonable Efforts to conduct the Development Work and shall pursue Registrations for the Product in the Field in the LICENSEE Territory, including the preparation and filing of regulatory submissions. In conducting the Development Work, LICENSEE and/or its Affiliates or sublicensees may utilize FORENAP for support in conducting the Development Work which

 

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shall include the services set forth in the Services Agreement dated June 25, 2007 between LICENSEE and FORENAP, a copy of which is attached as Schedule 4.1.1 (hereinafter referred to as “Services Agreement”). Further, LICENSEE may subcontract portions of the Development Work to any other Third Party having enough knowledge, experience and capability for pre-clinical and/or Clinical Studies; provided, however, that such subcontracted Third Party shall be subject to an agreement with LICENSEE consistent with the confidentiality obligations in accordance with Article 8 below. LICENSEE shall be responsible for the Development Work to be performed by FORENAP and any other subcontracted Third Party.

 

4.1.2                     Development Plan. For each Compound and Product, LICENSEE shall prepare a Development Plan that describes the significant development activities to be undertaken by LICENSEE, its Affiliates and/or its sublicensees with respect to the Compound and Product in the Field in the LICENSEE Territory. As part of the Services Agreement, LICENSEE, and/or its Affiliates shall prepare the initial Development Plan for the MT-210 Compound in consultation with FORENAP. The initial Development Plan for the MT-210 Compound shall take into consideration the following strategies for development;

 

(a)                                 Characterize the clinical trial subjects for their hepatic metabolic status, particularly by looking to CYP2D6 polymorphism (genotyping and if necessary phenotyping) and probably excluding CYP2D6 poor metabolisers from the initial Phase II(a) Study;

 

(b)                                 Exclude from the clinical trials subjects who are at risk for cardiovascular side effects;

 

(c)                                  Explore low doses of MT-210 Compound that have been considered clinically safe as far as QTc prolongation is considered;

 

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(d)                                 Titrate the doses of MT-210 up in a very conservative titration regimen to find the maximum safe dose with respect to QTc prolongation;

 

(e)                                  For the initial Phase II(a) Study, clinical study subjects shall be inpatients during the first two weeks, or longer, if no clinical efficacy is objectively demonstrated;

 

(f)                                   Frequently perform ECG recordings, including at Tmax, and before each dose increase;

 

(g)                                  Regularly monitor plasma levels of Compound and active metabolites in a manner similar to the monitoring conducted by MPC in the Phase I Studies with MT-210 Compound; and

 

(h)                                 Use only clinical sites that are experienced in conducting clinical studies with antipsychotic compounds.

 

The Development Plan may be modified from time to time as LICENSEE, its Affiliates and/or sublicensees deem necessary, and with respect to the MT-210 Compound, within the scope of the development strategy set forth in this Section 4.1.2; provided, however, LICENSEE, to the extent it is aware of such revisions, shall promptly inform MPC of any material revision of such Development Plan and will use good faith efforts to inform MPC of any other revision of such Development Plan. If the Development Plan for the MT-210 Compound is modified by LICENSEE, and/or its Affiliates beyond the development strategy considerations set forth in Section 4.1.2(a) — (h), LICENSEE shall promptly inform MPC of such revision of such Development Plan and MPC shall provide any comments it may have on such modifications within eight (8) days and LICENSEE shall consider in good faith any such comments.

 

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LICENSEE shall be responsible for preparing and implementing any modifications or amendments to the Development Plan.

 

4.1.3                     Back-Up Compounds & Metabolites. If during the course of the Development Work, LICENSEE or its Affiliate or its sublicensee decides (a) that it desires to develop the Product containing an Alternate Compound at the same time as the Development Work on the Product containing MT-210 Compound or (b) that it no longer desires to continue the Development Work of the Product containing MT-210 Compound based on its reasonable judgment of internal scientific and/or economic evaluation, such as safety, efficacy or commercial viability of the Product containing the MT-210 Compound, and, in substitute of the MT-210 Compound, desires to commence Development Work of the Product containing a Back-Up Compound, a MT-210 Back-Up or Metabolite selected by LICENSEE as a back-up Compound, LICENSEE shall notify MPC of such intention and the Development Plan for the Product containing such back-up Compound. LICENSEE shall be free to commence such simultaneous or alternate Development Work unless MPC notifies LICENSEE within thirty (30) days after receipt of notice from LICENSEE that MPC, its Affiliate and/or its licensee is then conducting any research, development and/or commercialization activities for such back-up Compound outside the Field; provided, however, that none of MPC, its Affiliates and/or its licensee shall be permitted to restrict LICENSEE from commencing Development Work on the Excluded Compounds. Upon the Onset of a Phase I Study of the Product containing such back-up Compound, LICENSEE shall notify MPC of such Development Work. For the avoidance of doubt, the development diligence set forth in Section 4.1.4, the milestone payment set forth in Section 5.2 (but subject to Section 5.2) and the royalties set forth in Section 5.3 shall be applied

 

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to the Product containing such back-up Compound to the extent such back-up Compound is an Alternate Compound.

 

4.1.4                     Clinical Studies Protocol. Before commencement of any Clinical Studies conducted by LICENSEE and its Affiliates in accordance with the Development Plan, LICENSEE or its Affiliate shall provide to MPC the final draft of the protocol for such Clinical Study. MPC may comment within fifteen (15) business days on such protocol and LICENSEE or its Affiliate shall consider in good faith any MPC comments; provided, however, the final decision with respect to any such protocol shall be taken by LICENSEE at its sole discretion.

 

4.1.5                     Development Diligence. Without prejudice to any other remedies available at law or otherwise provided for in this Agreement, MPC shall have the right to terminate this Agreement in the event that LICENSEE, its Affiliate or its sublicensee fails to meet any of the following milestones for the Product containing the MT-210 Compound:

 

(a)                                 Filing of the first IND in one of the Major Countries within [*] months after the Effective Date;

 

(b)                                 Onset of the first Phase II(b) Study within [*] months after the first IND filing;

 

(c)                                  Onset of the first Phase III Study within [*] months after completion of the last Phase II(b) Study; and

 

(d)                                 Filing of the first NDA within [*] years and [*] months after the first IND filing;

 

Provided, however, that MPC shall not have the right to terminate this Agreement if the failure of LICENSEE, its Affiliate or its sublicensee to meet any of the milestones set forth above is due to or caused by any of the following:

 

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(1)                                 Reason(s) beyond the reasonable control of LICENSEE, its Affiliate or its sublicensee. For the avoidance of doubt and without prejudice to other reasons, the following reasons will be deemed beyond the reasonable control of LICENSEE, its Affiliate or its sublicensee: a requirement by the FDA or other applicable regulatory agency that LICENSEE, its Affiliate or its sublicensee (i) perform additional studies or trials, (ii) reformulate or alter the manufacturing process of any Product, (iii) cease any clinical trial or redesign any clinical trial, or (iv) perform any other action or cease to perform any action that otherwise delays the clinical development of any Product. LICENSEE, its Affiliate or its sublicensee will present to MPC evidence of such FDA or other applicable regulatory agency action.

 

(2)                                 Activities performed in the best interest of the Product as reasonably determined by LICENSEE, its Affiliate or its sublicensee, subject to MPC’s approval, not to be unreasonably withheld. For the avoidance of doubt and without prejudice to other activities, the following activities will be deemed in the best interest of the Product: (i) an expanded clinical program scope; (ii) additional safety studies, including drug-drug interaction studies and special population studies; (iii) reformulation efforts; or (iv) business development efforts following initiation of a Phase II(b) Study. Plan of such activities will be communicated to MPC by LICENSEE, its Affiliate or its sublicensee.

 

(3)                                 LICENSEE’s decision to discontinue development of the Product containing the MT-210 Compound, pursuant to Section 4.1.3(b) or 10.3.

 

The Steering Committee will review the overall progress of the Development Plan and will agree on reasonable time extensions or milestone adjustments to accommodate delays due to clause (1) or (2) set forth above based on information presented by LICENSEE, its Affiliate or its sublicensee.

 

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In the event that LICENSEE, its Affiliate or its sublicensee commence alternate Development Work of the Product containing a Back-Up Compound or Metabolite selected by LICENSEE as a back-up Compound pursuant to Section 4.1.3(b), the Parties shall discuss and agree in good faith revisions to the respective timeline for the back-up Compound in consideration of the Development Plan for the Product containing such back-up Compound proposed by LICENSEE pursuant to Section 4.1.3(b).

 

Notwithstanding the foregoing, LICENSEE may extend the time to achieve any of the milestones set forth in Section 4.1.5(a) through (d) set forth above for one (1) year, at its sole discretion, by making a payment of Five Hundred Thousand United States Dollars ($500,000) to MPC before the date on which such milestone was to have been originally achieved (the “Extension Payment”). If such Extension Payment is made, all following milestones will be concomitantly extended by one (1) year. LICENSEE will have the right to make an unlimited number of Extension Payments in conjunction with the development of Product containing the MT-210 or of a Product containing a Back-Up Compound pursuant to Section 4.1.3(b), provided that the payment amount will increase to [*] beginning with the third Extension Payment. For the avoidance of doubt, Extension Payments will be in addition to any milestone that is otherwise payable to MPC as set forth in Section 5 of this Agreement.

 

4.1.6                     Progress Reports. Every six (6) months until the Registration is obtained in any country in the LICENSEE Territory, LICENSEE shall use its Commercially Reasonable Efforts to prepare and deliver to MPC a written report summarizing LICENSEE’s, its Affiliates’ and/or sublicensees’ significant activities of the Development Work, including all pre-clinical tests and Clinical Studies, with respect to the Compound and Product in the Field in the LICENSEE Territory performed by LICENSEE, its Affiliates and/or sublicensees. MPC may

 

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comment on the progress of the Development Work when reviewing such process reports and LICENSEE or its Affiliates, shall, in its or their sole discretion, consider in good faith any such comments; provided, however, the final decision as to the Development Work shall be taken by the LICENSEE or its Affiliates or sublicensees at its or their sole discretion.

 

4.1.7                     Regulatory Matters. LICENSEE and/or its Affiliates or sublicensees shall own, control and retain primary legal responsibility for, and shall be responsible for funding, the preparation, filing and prosecution of all filings and regulatory applications required to obtain Registration of Product in the LICENSEE Territory in the Field.

 

4.1.8                     Supply of Samples of Compound. Upon request of LICENSEE, MPC will make, at its sole discretion, its reasonable effort to supply LICENSEE with samples of Compound if such samples of Compound are available to MPC at the time.

 

4.1.9                     Reporting of Adverse Events and Adverse Drug Reactions. LICENSEE and its Affiliates and sublicensees and MPC and its Affiliates and licensees shall cooperate with respect to the exchange of adverse event and safety information associated with the Product. Details of the cooperation in the handling of adverse event and safety information related to the Product shall be included in a separate agreement to be negotiated in good faith between the Parties at the time MPC, its Affiliates, its licensee or its sublicensee initiates development of the Product in the MPC Territory. Such agreement shall set forth a standard operating procedure governing the collection, investigation, reporting, and exchange of information concerning adverse drug reactions/experiences sufficient to permit each Party to comply with its legal obligations in its respective Territory. Each Party will designate a regulatory affairs or pharmacovigilance liaison to be responsible for communicating with the other Party regarding

 

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the reporting of adverse event and safety information associated with the Compound and Product.

 

4.2                               Launch and Marketing Efforts. LICENSEE, its Affiliates or its sublicensees shall use Commercially Reasonable Efforts to launch and market the Product in the LICENSEE Territory.

 

4.3                               Coordination of Development Efforts.

 

4.3.1                     Steering Committee. MPC, LICENSEE and their respective Affiliates, agree to establish a Steering Committee on the Effective Date to facilitate the disclosure described in Article 3. The specific composition, role and responsibility of the Steering Committee, and details relating to meetings and decision-making, shall be negotiated in good faith in a separate agreement to be entered into between the Parties within thirty (30) days after the Effective Date.

 

4.3.2                     Development in the MPC Territory. MPC shall own, control and retain primary legal responsibility for, and shall be responsible for funding, the preparation, filing and prosecution of all filings and regulatory applications required to obtain Registration of Product in the MPC Territory. LICENSEE will be allowed to comment on development program for development of the Product in MPC Territory in the Steering Committee.

 

4.3.3                     Supply of the Bulk Drug Substance and Product for Development in the MPC Territory. Upon the reasonable request from MPC, LICENSEE shall discuss in good faith with MPC terms and conditions under which LICENSEE would be willing to supply the Bulk Drug Substance and/or the Product to MPC, its Affiliates or its licensee for development in the MPC Territory. The price of such Bulk Drug Substance and/or the Product shall be equal to the amount of the Fully Burdened Manufacturing Cost plus two percent (2%). The detailed terms

 

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and conditions of such supply shall be discussed in good faith and agreed upon between the Parties.

 

4.4                               Supply of the Bulk Drug Substance and Product for Commercialization in the MPC Territory. Upon the reasonable request from MPC, LICENSEE shall discuss in good faith with MPC terms and conditions under which LICENSEE would be willing to supply the Bulk Drug Substance and/or the Product to MPC, its Affiliate or its licensee for commercialization in the MPC Territory. The detailed terms and conditions of such supply (including supply price) shall be discussed in good faith and agreed upon between the Parties.

 

ARTICLE 5
 PAYMENTS AND ROYALTIES

 

5.1                               Initial License Fee. In consideration of the licenses granted by MPC to LICENSEE, LICENSEE shall pay to MPC the total amount of One Million United States Dollars (US$1,000,000) as the initial license fee within thirty (30) days after the Effective Date. Further, in the event that LICENSEE, its Affiliate or its sublicensee commence the clinical development of the Product containing an Alternate Compound pursuant to Section 4.1.3.(a), LICENSEE shall pay to MPC the additional license fee set forth in Schedule 5.2(b) within thirty (30) days after the Onset of the first Phase I Study for such Alternate Compound; provided, however, that certain costs and expenses for certain preclinical pharmacological efficacy test of such Back-Up Compound agreed upon by MPC could be deducted from such additional license fee but any and all costs and expenses for certain preclinical pharmacological efficacy test of such Metabolite shall not be deducted from such additional license fee. If LICENSEE, its Affiliate or its sublicensee commence alternate Development Work of the Product containing a Back-Up Compound or Metabolite selected by LICENSEE as a back-up Compound pursuant to Section 4.1.3.(b), LICENSEE shall have no obligation to make such additional license fee payment with

 

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respect to the replacement Alternate Compound for which it commences Development Work after the discontinuation of the Development Work on the MT-210 Compound.. For the avoidance of doubt, LICENSEE shall have no obligation to pay the additional licensee fee set forth in Schedule 5.2(b) for pre-clinical development work performed on or with an Alternate Compound. For the further avoidance of doubt, the initial license fee set forth in this Section 5.1 shall not be creditable against future milestone payments or royalties.

 

5.2                               Milestone Payments.

 

5.2.1                     Milestone Payments.                               In addition to the initial license fee, in consideration of the licenses granted by MPC to LICENSEE, LICENSEE shall pay to MPC the milestone payments set forth in Schedule 5.2(a) for Product containing the MT-210 Compound. Further, in the event that LICENSEE, its Affiliates or sublicensees clinically develop and commercialize the Product containing an Alternate Compound in LICENSEE Territory pursuant to Section 4.1.3.(a), in consideration of the licenses granted by MPC to LICENSEE, LICENSEE shall pay to MPC the milestone payments set forth in Schedule 5.2(b). If LICENSEE, its Affiliates or sublicensees clinically develop and commercialize the Product containing a Back-Up Compound or Metabolite selected by LICENSEE as a back-up Compound pursuant to Section 4.1.3.(b) and has made any of the milestone payments set forth in Schedule 5.2(a) for the Product containing the MT-210 Compound, then LICENSEE shall not have to make the same milestone payments for the substituted Product containing such back-up Compound set forth in Schedule 5.2(b). For example, if LICENSEE, its Affiliates or sublicensees discontinues Development Work on the Product containing the MT-210 Compound after the Onset of a Phase II(b) Study, LICENSEE will not have to make a milestone payment on the Product containing such back-up Compound

 

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that it develops to replace the Product containing MT-210 Compound unless and until there is an Onset of a Phase III Study utilizing the Product containing such back-up Compound.

 

5.2.2                     Reports and Payments. The milestone payments shall be made no more than once with respect to the achievement of each milestone and no amounts shall be due hereunder for any subsequent or repeated achievement of such milestones (but payable on the first achievement of such milestone). LICENSEE shall notify MPC in writing within thirty (30) days after the achievement of the milestones specified on Schedule 5.2 and each such notice shall be accompanied by the appropriate milestone payment. For the avoidance of doubt, the milestone payments pursuant to this Section 5.2 shall not be creditable against future milestone payments or royalties.

 

5.3                               Royalties Payable by LICENSEE.

 

5.3.1                     In addition, in consideration of the licenses granted by MPC to LICENSEE herein, LICENSEE shall pay to MPC a royalty on Net Sales in each Royalty Year in the LICENSEE Territory, on a Product-by-Product, as follows:

 

	
 
    	
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(“M”   means “million”.)
    	
 
    	
 
    	
 
    

 

As an example, for Net Sales of [*] in the LICENSEE Territory, the royalties payable by LICENSEE to MPC will represent [*].

 

5.3.2                     Royalties set forth in this Section 5.3 shall accrue from the date of Launch of Product in each country and shall continue and accrue on Net Sales until the end of the Royalty Period in such country.

 

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5.3.3                     One Royalty. No more than one royalty payment shall be due with respect to a sale of a particular Product. No multiple royalties shall be payable because any Product, or its manufacture, sale or use is covered by more than one Valid Claim. No royalty shall be payable under this Section 5.3 with respect to sales of the Products among LICENSEE and its Affiliates or sublicensees for resale, nor shall a royalty be payable under this Section 5.3 with respect to the Products distributed for use in research and/or development, in clinical trials, as donations to non-profit institutions or government agencies or as promotional free samples.

 

5.3.4                     Generic Competition. At any time after Generic Competition exists in a country of the LICENSEE Territory, in each Calendar Quarter during the Royalty Period, Net Sales from such country shall be reduced by [*] before including same into Net Sales in all countries in the LICENSEE Territory for the purpose of calculating the applicable royalty rates set forth in Section 5.3.1.

 

5.4                               Third Party’s New Formulation Technology. LICENSEE may, at its discretion, introduce any third party formulation technology for the development and commercialization of the Product. LICENSEE shall bear the costs and expenses for the development of such third party new formulation technology. If MPC becomes interested in the Product using such third party’s new formulation technology, LICENSEE, to the extent it has the right and ability to do so, shall provide MPC with any and all data and information with regard to such third party’s new formulation technology (hereinafter referred to as “Third Party Technology”) as a part of the LICENSEE Intellectual Property. Further, if MPC decides to develop and commercialize the Product in MPC Territory using such Third Party Technology, LICENSEE, to the extent it has the right and ability to do so, shall grant or have such third party granted MPC to make, have made, use, sell, offer for sale, have sold and import the Product in MPC Territory using such

 

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Third Party Technology as a part of the LICENSEE Intellectual Property. In such case, in consideration of the license granted to MPC herein, MPC shall pay to such third party royalties for commercialization of the Product using such Third Party Technology in the MPC Territory which rate is equivalent to the royalties for such license granted to LICENSEE.

 

ARTICLE 6
  ROYALTY REPORTS AND ACCOUNTING

 

6.1                               Reports. During the Royalty Period, LICENSEE shall furnish to MPC a written report for the Calendar Quarter showing, on a country by country and Product by Product basis, (a) the gross sales of all Products sold by LICENSEE and its Affiliates and sublicensees during such Calendar Quarter, (b) the Net Sales, (c) the royalties, payable in United States Dollars, which shall have accrued hereunder based upon Net Sales of Products, (d) the withholding taxes, if any, required by law to be deducted in respect of such royalties, (e) the date of the Launch of each Product in each country in the LICENSEE Territory and (f) the exchange rates used in determining the amount of United States Dollars, as more specifically provided in Section 7.2. Reports shall be due sixty (60) days following the close of each Calendar Quarter. LICENSEE shall keep complete and accurate records in sufficient detail to properly reflect all gross sales and Net Sales and to enable the royalties payable hereunder to be determined in accordance with Section 6.2.

 

6.2                               Audit.

 

6.2.1                     Audit Rights. Upon the reasonable written request of MPC and not more than once in each Calendar Year, LICENSEE shall permit MPC and/or an independent certified public accounting firm of nationally recognized standing, selected by MPC and reasonably acceptable to LICENSEE, at MPC’s expense, to have access during normal business hours on at least ten (10) days’ prior written notice, to such of the records of LICENSEE and its Affiliates as

 

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may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than thirty-six (36) months prior to the date of such request; provided that MPC shall not be entitled to audit the same period of time more than once.

 

6.2.2                     Audit Results. If such accounting firm concludes that additional royalties were owed during such period, LICENSEE shall remit to MPC within thirty (30) days of the date MPC delivers to LICENSEE such accounting firm’s written report so concluding: (a) the amount of such additional royalties; and (b) interest on the amounts overdue of such underpayment which shall be calculated pursuant to Section 7.4. In the event such accounting firm concludes that amounts were overpaid by LICENSEE during such period, LICENSEE shall have a credit against future royalties payable to MPC in the amount of such overpayment; provided, however, that LICENSEE may have an independent certified public accounting firm of nationally recognized standing, selected by LICENSEE and reasonably acceptable to MPC, at LICENSEE’s expense, confirm the results of the audit conducted by MPC’s accounting firm. The fees charged by MPC’s accounting firm shall be paid by MPC; provided, however, if an error in favor of MPC of more than five percent (5%) of the royalties due hereunder for the period being reviewed is discovered, then LICENSEE shall pay the reasonable fees and expenses charged by such accounting firm.

 

6.2.3                     Confidential Financial Information. MPC shall treat all financial information subject to review under this Article 6 as confidential, and shall cause its accounting firm to retain all such financial information in confidence.

 

ARTICLE 7
  PAYMENTS

 

7.1                               Payments Terms. Royalties shown to have accrued by each royalty report provided for under Section 6.1 shall be due and payable on the date such royalty report is due.

 

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7.2                               Payment Method. All payments by LICENSEE to MPC under this Agreement shall be paid in United States Dollars. If any currency conversion shall be required in connection with the payment of any royalties hereunder, such conversion shall be made by using the average of the exchange rates for the purchase and sale of United States Dollars reported by the Bank of Tokyo Mitsubishi UFJ on the last business day of the Calendar Quarter to which such royalty payments relate.

 

7.3                               Exchange Control. If at any time legal restrictions prevent the prompt remittance of part or all of the royalties with respect to any country in the LICENSEE Territory where the Product is sold, LICENSEE shall have the right, at its option, to make such payments by depositing the amount thereof in local currency to MPC’s account in a bank or other depository designated by MPC in such country.

 

7.4                               Overdue Payments. In the event the initial payment, any milestone payment or any royalty payment is not made when due, such outstanding payment shall accrue interest (from the date such payments is due through and including the date upon which full payment is made) at the annual rate of [*].

 

7.5                               Withholding Taxes. LICENSEE shall be entitled to deduct from any payment due MPC under this Agreement the amount of any withholding taxes payable by LICENSEE or its Affiliates, or any taxes required to be withheld by LICENSEE or its Affiliates, to the extent LICENSEE or its Affiliates pay to the appropriate governmental authority on behalf of MPC such taxes, levies or charges. LICENSEE shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of MPC by LICENSEE or its Affiliates. LICENSEE promptly shall deliver to MPC proof of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental

 

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authority with respect thereto. Upon reasonable request from MPC, LICENSEE shall cooperate with MPC to supply forms or documentation required by any applicable taxation laws, treaties or agreements to such withholding or as necessary to claim a benefit.

 

ARTICLE 8
  CONFIDENTIALITY

 

8.1                               Nondisclosure Obligations. Except as otherwise provided in this Article 8, during the term of this Agreement and for a period of five (5) years thereafter, both Parties shall maintain in confidence and use only for purposes of this Agreement the Proprietary Information supplied by the other Party.

 

8.2                               Permitted Disclosures. To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement, a Party (including its Affiliates and sublicensees) may disclose Proprietary Information of the other Party which it is otherwise obligated under this Article 8 not to disclose (a) to its Affiliates, its sublicensees, its consultants, outside contractors and clinical investigators, on a need-to-know basis on condition that such Persons agree to keep the Proprietary Information confidential for the same time periods and to the same extent as such Party is required to keep the Proprietary Information confidential; and (b) to government or other regulatory authorities to the extent that such disclosure is required by applicable law (including without limitation all applicable securities laws), regulation, agency or court order, or is reasonably necessary to obtain patents or authorizations to conduct clinical trials with, and to commercially market the Product, provided that, with respect to clause (b) the disclosing Party shall provide written notice to the other Party and sufficient opportunity to object to such disclosure or to request confidential treatment thereof. The obligation not to disclose or use Proprietary Information received from the other Party shall not apply to any part of such Proprietary Information that (i) is or becomes patented, published or otherwise part of the

 

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public domain other than by acts of the Party obligated not to disclose such Proprietary Information in contravention of this Agreement; (ii) is disclosed to the receiving Party by a Third Party, provided such Proprietary Information was not obtained by such Third Party directly or indirectly from the other Party on a confidential basis; (iii) prior to disclosure under this Agreement, was already in the possession of the receiving Party, provided such Proprietary Information was not obtained directly or indirectly from the other Party; (iv) is subsequently and independently developed by the receiving Party without the knowledge of the Proprietary Information or (v) is disclosed in a press release agreed to by both Parties, which agreement shall not be unreasonably withheld.

 

8.3                               SEC Filings. The Parties will consult with each other on the provisions of this Agreement to be redacted in filings, if any, made by the Parties with the Securities and Exchange Commission or as otherwise required by law. The Parties agree that either Party may make such disclosures pursuant to Form 8-K or otherwise as it determines, based on advice of counsel, are reasonably necessary to comply with laws or regulations or for appropriate market disclosure, with the prior written consent by the other Party. The Parties shall consult with one another before any such filing, and shall seek protection for any Proprietary Information (including any terms and conditions of this Agreement).

 

8.4                               Press Release and Publication.

 

8.4.1                     Press Release. In the event that either Party desires to issue a press release relating to this Agreement, the Parties shall discuss in good faith and agree upon the contents and timing of such press release.

 

8.4.2                     Scientific Publication. In the event that LICENSEE, its Affiliate or its sublicensee(s) is willing, required or obliged to make any publication in a scientific journal or at

 

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the conference in any academic society on the information obtained from its Development Work on the Compound and/or the Product, LICENSEE, to the extent LICENSEE has a right to review any such publication or presentation, shall endeavor in good faith to submit to MPC the full text of such publication, at least thirty (30) days before the date of such publication and to consult with MPC and to solicit comments with respect to such publication or presentation; provided, however, that MPC shall not prevent LICENSEE from complying with regulatory requirements.

 

ARTICLE 9
  INTELLECTUAL PROPERTY

 

9.1                               Ownership of Improvements. Each Party shall solely own, and such Party alone shall have the right to apply for, any patents within and outside its Territory for any improvements made solely by such Party’s employees in the course of the performance of any work under this Agreement. Improvements made jointly by employees of MPC and LICENSEE, its Affiliates or its sublicensees shall be owned jointly by MPC and LICENSEE, its Affiliates or its sublicensees and shall be included in the licenses described in Article 2 hereof.

 

9.2                               Patents Prosecution and Maintenance.

 

9.2.1                     MPC Patents. MPC shall have the initial right to control the filing, prosecution and maintenance of the MPC Patents in the LICENSEE Territory, and to select all patent counsel or other professionals to advise, represent or act for it in all matters relating to the MPC Patents in the LICENSEE Territory. MPC shall be responsible for the payment of all such patent prosecution and maintenance costs of the MPC Patents in the Major Countries and LICENSEE shall be responsible for the payment of all such patent prosecution and maintenance costs of the MPC Patents in the remaining countries in the LICENSEE Territory if LICENSEE desires to prosecute and maintain the MPC Patents in such remaining countries. MPC shall solicit LICENSEE’s review of the nature and text of any such patent applications in the

 

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LICENSEE Territory and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and MPC takes into account LICENSEE’s reasonable comments related thereto. MPC, taking such LICENSEE’s request into consideration but at its sole discretion, shall file patent claims related to the Compound or Product proposed by LICENSEE in any MPC Patent or a continuation or divisional of the foregoing. MPC shall inform LICENSEE of any significant developments in the prosecution of pending patent applications included in the MPC Patents in the LICENSEE Territory, including the issuance of any final office actions, allowance of claims, or upcoming grant of any domestic or foreign patent based thereon. If MPC decides not to file, prosecute or maintain a MPC Patent in any country in the LICENSEE Territory, MPC shall provide LICENSEE with written advance notice sufficient to avoid any loss or forfeiture (but in any event at least sixty (60) days notice), and LICENSEE shall have the right but not the obligation, at its sole expense, to file, prosecute or maintain such MPC Patent in such country, and MPC shall assign to LICENSEE a right, title and interest in and to such MPC Patent in such country and such MPC Patent shall no longer be deemed MPC Patent.

 

9.2.2                     LICENSEE Patents. LICENSEE shall have the right to control the filing, prosecution, and maintenance of the LICENSEE Patents in the respective Territory, and to select all patent counsel or other professionals to advise, represent or act for it in all matters relating to the LICENSEE Patents. LICENSEE shall be responsible for the payment of all such patent prosecution and maintenance costs. LICENSEE shall solicit MPC’s review of the nature and text of any such patent applications in the MPC Territory and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and LICENSEE shall take into account MPC’s reasonable comments related thereto. LICENSEE shall inform MPC of any

 

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significant developments in the prosecution of pending patent applications included in the LICENSEE Patents in the MPC Territory, including the issuance of any final office actions, allowance of claims, or upcoming grant of any domestic or foreign patent based thereon. If LICENSEE decides not to file, prosecute or maintain a Patent Right included in the LICENSEE Patents in any country in the MPC Territory, it shall provide MPC with written advance notice sufficient to avoid any loss or forfeiture (but in any event at least sixty (60) days notice), and MPC shall have the right but not the obligation, at its sole expense, to file, prosecute or maintain such LICENSEE Patent in such country, and LICENSEE shall assign to MPC a right, title and interest in and to such LICENSEE Patent in such country and such LICENSEE Patent shall no longer be deemed LICENSEE Patent.

 

9.3                               Cooperation. Each Party shall make available as far as possible to the other Party or to the other Party’s authorized attorneys, agents, representatives, employees or consultants any documents necessary or appropriate to enable the other Party to file, prosecute and maintain patent applications and resulting patents, as set forth in Section 9.2, for a period of time sufficient for the other Party to obtain the assistance it needs from the first Party. Where appropriate, each Party shall sign or cause to have signed all documents relating to said patent applications or patents at no charge to the other Party.

 

9.4                               Enforcement of Patents.

 

9.4.1                     Excluding Action. Each of the Parties shall notify the other of any activity or product which it reasonably believes constitutes an infringement or misappropriation of the MPC Patents or MPC Know-How in the LICENSEE Territory or of any claim of invalidity in respect of a MPC Patent. LICENSEE shall have the right, in the first instance, to enforce the MPC Patents against such infringing technology or to defend any such claim of invalidity within

 

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the LICENSEE Territory. In the event LICENSEE declines to prosecute such infringing technology or to defend such claim within ninety (90) days (or twenty-one (21) days from the receipt of paragraph IV certificate or aware of the ANDA application) of becoming aware thereof, MPC shall have the right to so enforce or defend. The Parties agree that the costs of such prosecution or defense of validity, in connection with an infringement in the LICENSEE Territory shall be borne by the Party who prosecutes or defends the action.

 

9.4.2       Settlements, Allocation of Monetary Award. The Party controlling the action may 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 express written consent of the non-controlling Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, MPC and LICENSEE shall cooperate with each other in the planning and execution of any action to enforce the MPC Patents. Any recovery and proceeds of any awards, judgments or settlements obtained by LICENSEE or MPC shall be shared as follows, whether the recovery is by settlement or otherwise:

 

(a)           the enforcing or defending Party shall first be entitled to recoup all of its out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred in connection with the action;

 

(b)           the other Party, if joined or cooperating in the action, shall then be entitled to recover its out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred in connection with the action, not already reimbursed by the enforcing or defending Party;

 

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(c)           any recovery remaining shall be allocated between the Parties on a pro rata basis based upon the respective lost profits of the Parties as a result of the infringing activities, which allocation ratio shall be separately agreed upon in writing by the Parties.

 

9.4.3       Each Party agrees to furnish the other with such cooperation, including consenting to act as a Party to litigation if required, and exchange of information as the other Party may reasonably request in connection with the prosecution of any such action and the Party prosecuting an infringement or defending a claim of invalidity shall consult periodically with the other Party in connection with any such action. Neither Party shall take any action which would admit the invalidity of a MPC Patent without the consent of the other Party, which consent shall not be unreasonably withheld.

 

9.5          Patent Term Restoration. The Parties, their Affiliates or their sublicensees shall cooperate with each other, execute all documents and take all actions that may be necessary to pursue patent term extensions, supplemental protection certificates or their future equivalents applicable to the LICENSEE Patents or the MPC Patents, under appropriate laws and/or regulations in the LICENSEE Territory and/or MPC Territory. MPC and LICENSEE shall discuss and determine which patents shall be extended in respective Territory. All filings for such patent term extension or supplemental protection certificates shall be made by the Party who owns the patent at its sole cost and expense.

 

9.6          Infringement of Third Party Rights. LICENSEE or its Affiliate shall promptly notify MPC in writing of any allegation by a Third Party that the manufacture, development, importation, use, offer for sale or sale of a Compound or Product covered by the MPC Intellectual Property, infringes or may infringe the intellectual property rights of such Third Party in any country of the LICENSEE Territory. LICENSEE or its Affiliate or sublicensee shall

 

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have the first right to control the defense of any claim alleging that the manufacture, development, importation, use, offer for sale or sale of such Compound or Product in the LICENSEE Territory infringes any such Third Party rights or may settle on terms that it deems advisable in its sole discretion, provided that any final disposition of the litigation that will restrict the claims in or admit any invalidity of any MPC Patent shall not be made without full consultation with and approval by MPC, not to be unreasonably withheld. If LICENSEE or its Affiliate or sublicensee fails to proceed in a timely manner with respect to such defense, MPC shall have the right to control the defense of such claim. The Parties shall consult and cooperate fully to determine a course of action. If, finally, LICENSEE or its Affiliate or sublicensee is required by order or judgment of any court in any jurisdiction, or LICENSEE or its Affiliate or sublicensee in its sole discretion after having obtained an outside legal opinion, believes it necessary to obtain a license, obtains a license under such intellectual property right from such Third Party, and makes payments to such Third Party to avoid alleged infringement, then [*] of the royalty or other payments required to be paid by LICENSEE or its Affiliate or sublicensee to such Third Party as the result of a judgment or settlement under this Section 9.6 (“Third Party Payment”) shall be creditable against the royalty payments pursuant to Section 5.3 due MPC with respect to the sale of such Product in such country, provided, however, that in no event shall the royalties payable to MPC be reduced to less than [*] of the amount due under this Agreement, and provided further any remaining portion the [*] of the Third Party Payment not credited pursuant to this Section 9.6 may be carried over against the royalties payable to MPC for the subsequent period in which the royalties are due. Each Party shall have the right to participate in the defense of any such claim with counsel of its choice at its own expense.

 

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ARTICLE 10
  TERM AND TERMINATION

 

10.1        Expiration. This Agreement shall come into effect on the Effective Date and, unless earlier terminated, shall continue in effect until the expiration of LICENSEE’s obligations to pay royalties. After the expiration of this Agreement, on a country-by-country basis, in such country in the Territory, LICENSEE will have a fully paid-up, non-exclusive, perpetual, irrevocable license, with the right to grant and authorize sublicenses, with respect to the MPC Patents and MPC Know-How in such country in the LICENSEE Territory or in the case of the manufacture of Compound, anywhere in the world for the purpose of manufacturing the Product to be sold in the LICENSEE Territory.

 

10.2        Termination for Cause.

 

10.2.1     Either Party may terminate this Agreement upon or after the breach of any material provision of this Agreement by the other Party, if the breaching Party has not cured such breach within sixty (60) days after notice thereof from the non-breaching Party. This Agreement shall terminate, at the option of the non-breaching Party, at the expiration of such sixty (60) day cure period; provided, however, that if the breach is not capable of being cured within sixty (60) days of such written notice, this Agreement may not be terminated so long as the breaching Party commences and is taking commercially reasonable actions to cure such breach as promptly as practicable.

 

10.2.2     Either Party may terminate this Agreement upon giving notice to the other Party, which termination notice shall have immediate effect, in the case of any adjudication of bankruptcy or insolvency, appointment of a receiver by a court of competent jurisdiction, assignment for the benefit of creditors, or institution of liquidation proceedings by or against the other Party.

 

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10.2.3     Notwithstanding anything to the contrary contained in Section 10.2.1, 10.2.2 or 13.2, in the event that MPC is entitled to terminate this Agreement pursuant to Section 10.2.1 or 10.2.2, prior to exercising such termination right, MPC shall offer LICENSEE’s sublicensees the ability to assume LICENSEE’s rights and obligations under this Agreement and to continue this Agreement in full force and effect between MPC and such sublicensee.

 

10.3        Other LICENSEE Termination. In the event that LICENSEE believes that (1) certain data and information with regard to safety or efficacy of the Compound or Product obtained through the Development Work does not justify continued development of the Product by LICENSEE, its Affiliate and/or sublicensee or (2) LICENSEE believes that commercial considerations or other factors for marketing of the Product do not justify continued development, commercialization or marketing of the Product by LICENSEE, its Affiliate and/or its sublicensees, LICENSEE may terminate this Agreement in its sole discretion at any time during the term hereof in its entirety, or on a country-by-country, Compound-by-Compound or Product-by-Product basis (a) on not less than ninety (90) days prior written notice to MPC if such termination occurs prior to Launch of such Product in such country, or (b) on not less than one hundred eighty (180) days prior written notice to MPC if such termination occurs after the Launch of such Product in such country, informing MPC of and discussing with MPC the reasonable reason for which it is terminating all or part of this Agreement; provided however that if LICENSEE desires to terminate this Agreement in the cases safety problems caused by prolongation of heart repolarisation as measured by the QTc, LICENSEE shall explain MPC the reasonable reason why such safety problems could not be avoided despite of LICENSEE’s clinical development plan to decrease the risk of such safety problems. In which case LICENSEE’s obligation to perform any further work under this Agreement shall cease in such

 

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country or for such Compound or for such Product as of the date of the end of the period set forth in Section 10.3.(a) or 10.3.(b).

 

10.4        Effect of Expiration and Termination. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing on or prior to such expiration or termination. LICENSEE and its Affiliates and sublicensees shall have the right to sell or otherwise dispose of the stock of any Product subject to this Agreement then on hand or in process of manufacture, subject to Articles 5, 6 and 7. In addition to any other provisions of this Agreement which shall by their terms continue after the expiration of this Agreement, the provisions of Article 8 shall survive the expiration or termination of this Agreement and shall continue in effect during the term set forth in Section 8.1. In addition, any other provision required to interpret and enforce the Parties’ rights and obligations under this Agreement shall also survive, but only to the extent required for the full observation and performance of this Agreement. Except as expressly set forth herein, the rights to terminate as set forth herein shall be in addition to all other rights and remedies available under this Agreement, at law, or in equity, or otherwise.

 

10.5        Effect of Termination Without MPC’s Cause. In the event that this Agreement shall be terminated by MPC pursuant to Section 4.1.5, 10.2 or by LICENSEE pursuant to Section 10.3, LICENSEE or its Affiliate shall return to MPC all written MPC Know-How and all copies thereof and furnish MPC with all of LICENSEE, its Affiliates or its sublicensee Know-How not already provided to MPC with a royalty-free worldwide right to use all LICENSEE Patents and LICENSEE Know-How. LICENSEE or its Affiliate shall further transfer free of charge to MPC or its nominee any IND, Application or other documents filed with any government agency in

 

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LICENSEE Territory and any Registration obtained in LICENSEE Territory. LICENSEE shall, at the request of MPC, cooperate with MPC or its nominee for the smooth transfer of them.

 

ARTICLE 11
  REPRESENTATIONS AND WARRANTIES

 

11.1        Mutual Representations. The Parties hereby represent and warrant as follows:

 

11.1.1     Corporate Existence and Power. Such Party (a) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, and (b) has the corporate power and authority and the legal right to own and operate its property and assets, to lease the property and assets it operates under lease, and to carry on its business as it is now being conducted;

 

11.1.2     Authorization and Enforcement of Obligations. Such Party (a) has the corporate power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder and (b) has taken all necessary corporate action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against such Party in accordance with its terms;

 

11.1.3     Consents. All necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such Party in connection with this Agreement have been obtained; and

 

11.1.4     No Conflict. The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws or regulations and (b) do not conflict with, or constitute a default under, any contractual obligation of such Party.

 

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11.2        Representations and Warranties of MPC. MPC additionally represents and warrants to LICENSEE as of the Effective Date that:

 

11.2.1     the MPC Intellectual Property is owned or controlled by MPC free and clear of any liens, charges and encumbrances, and no other person, corporate or other private entity, or governmental or university entity or subdivision thereof, has any valid claim of ownership with respect to the MPC Intellectual Property, whatsoever;

 

11.2.2     MPC has not previously granted, and will not grant during the term of this Agreement, any right, license or interest in and to the MPC Intellectual Property, or any portion thereof, inconsistent with the licenses granted to LICENSEE herein;

 

11.2.3     MPC does not have any knowledge of the existence of any references or conduct that would bring into question the validity or enforceability of the MPC Intellectual Property in the Field;

 

11.2.4     there are no pending or, to the knowledge of MPC, threatened actions, suits, investigations, claims or proceedings in any way relating to the MPC Intellectual Property;

 

11.2.5     MPC has disclosed to FORENAP or LICENSEE all material scientific and technical information known to MPC or its Affiliates relating to the safety and efficacy of the MT-210 Compound and Product containing the MT-210 Compound;

 

11.2.6     MPC has disclosed to FORENAP or LICENSEE all information which MPC reasonably considers necessary for LICENSEE to file an IND with the FDA;

 

11.2.7     Schedule 1.36 contains a complete and accurate list of all Patents relating to the MT-210 Compound or the Product containing the MT-210 Compound owned or controlled by MPC in the LICENSEE Territory;

 

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11.2.8     to the knowledge of MPC, the patents encompassed within the MPC Patents, are, or, upon issuance, will be, valid and enforceable patents.

 

11.2.9     to the knowledge of MPC, the manufacture, use, sale, offer for sale, supply or importation by LICENSEE (or its Affiliates or sublicensees) of the MT-210 Compound or Product containing the MT-210 Compound does not and will not infringe any issued patent of any Third Party or, if and when issued, any claim within any published patent application of any Third Party;

 

11.2.10  MPC has heretofore disclosed to LICENSEE or FORENAP, all material filings, notices, reports and other correspondence and contact information between MPC and the FDA or any other regulatory authority regarding the MT-210 Compound or the Product containing the MT-210 Compound;

 

11.2.11  Schedule 11.2.11 sets forth a complete and accurate listing of all pre-clinical and clinical studies and trials, together with the dates and titles of such studies and trials, previously or currently undertaken or sponsored by MPC or its Affiliates with respect to the Compounds and Products. True, complete and accurate copies of all data and reports with respect to the studies and trials listed on Schedule 11.2.11 have been provided for review to LICENSEE or FORENAP, and MPC has otherwise provided for review to LICENSEE or FORENAP all material preclinical and clinical studies and trials of all Compounds and Products; and

 

11.2.12  MT-210 Compound and Product containing the MT-210 Compound are being developed, manufactured, stored, labeled, distributed and tested by MPC or its Affiliates or any Third Party acting on behalf of MPC in compliance in all applicable laws, rules and regulations at that time.

 

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11.3        Representations of LICENSEE. LICENSEE additionally represents and warrants to MPC that:

 

11.3.1     LICENSEE is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware, U.S.;

 

11.3.2     upon request by LICENSEE, LICENSEE will be funded in accordance with the terms and conditions of a Securities Purchase Agreement by and among Care Capital, LLC, Index Ventures (or other respective Affiliates) and the LICENSEE, a copy of which is attached as Schedule 11.3.2; and

 

11.3.3     LICENSEE has an ability to conduct the Development Work and to prepare the Development Plan in consultation with FORENAP.

 

11.4        Disclaimer of Representations. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR VALIDITY OF ANY PATENTS ISSUED OR PENDING.

 

ARTICLE 12
  INDEMNIFICATION

 

12.1        LICENSEE’s Obligation. LICENSEE shall defend, indemnify, and hold harmless MPC, its Affiliates and their respective directors, officers, shareholders, employees and agents (“MPC Indemnitees”), from and against any and all liabilities, damages, losses, penalties, fines, costs, interest, and expenses, including, but not limited to reasonable attorney’s fees (collectively “MPC Damages”) arising from or occurring as a result of a Third Party’s claim, action, suit, judgment or settlement against an MPC Indemnitee that is due to or based upon:

 

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12.1.1     any breach of a representation, warranty, covenant or agreement of LICENSEE under this Agreement,

 

12.1.2     any negligent or more culpable act of LICENSEE, its Affiliates or its sublicensees under this Agreement, or

 

12.1.3     development, manufacture, use, sale or labeling of Compound, Bulk Drug Substance or Product by LICENSEE, its Affiliates or its sublicensees.

 

However, LICENSEE shall not indemnify or hold harmless MPC Indemnitees from MPC Damages to the extent that such MPC Damages are finally determined to have resulted from an item for which MPC is obligated to indemnify LICENSEE pursuant to Section 12.2. LICENSEE’s obligations under this Section shall survive the expiration or termination of this Agreement for any reason.

 

12.2        MPC’s Obligation. MPC shall defend, indemnify, and hold harmless LICENSEE, its Affiliates and their respective directors, officers, shareholders, employees and agents (“LICENSEE Indemnitees”), from and against any and all liabilities, damages, losses, penalties, fines, costs, interest, and expenses, including, but not limited to reasonable attorney’s fees (collectively “LICENSEE Damages”) arising from or occurring as a result of a Third Party’s claim, action, suit, judgment or settlement against an LICENSEE Indemnitee that is due to or based upon:

 

12.2.1     any breach of a representation, warranty, covenant or agreement of MPC under this Agreement,

 

12.2.2     any negligent or more culpable act of MPC, its Affiliates or its sublicensees under this Agreement; or

 

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12.2.3     development, manufacture, use, sale or labeling of Compound, Bulk Drug Substance or Product by MPC, its Affiliates or its sublicensees.

 

However, MPC shall not indemnify or hold harmless LICENSEE Indemnitees from LICENSEE Damages to the extent that such LICENSEE Damages are finally determined to have resulted from an item for which LICENSEE is obligated to indemnify MPC pursuant to Section 12.1. MPC’s obligations under this Section shall survive the expiration or termination of this Agreement for any reason.

 

12.3        Insurance. LICENSEE, its Affiliates and/or its sublicensees shall maintain and keep in force for the term of this Agreement comprehensive general liability insurance including Products/Completed Operations, Contractual and Broad Form Property Damage covering its indemnification obligations hereunder combined single limit for Bodily Injury and Property Damage. It is understood that such insurance shall not be construed to limit LICENSEE’s liability with respect to such indemnification obligations.

 

ARTICLE 13
  MISCELLANEOUS

 

13.1        Force Majeure. 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 this 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, power shortage or failure, 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 or the other Party.

 

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13.2        Assignment.          This Agreement may not be assigned or otherwise transferred, nor, except as expressly provided hereunder, may any right or obligations hereunder be assigned or transferred by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either MPC or LICENSEE may, without the other Party’s consent, assign this Agreement and its rights and obligations hereunder to an Affiliate or in connection with the transfer or sale of all or substantially all of its business to which this Agreement relates, or in the event of its merger or consolidation or change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement.

 

13.3        Severability. Each Party hereby acknowledges that it does not intend to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such provisions. In case such provisions cannot be agreed upon, the invalidity of one or several provisions of the Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without such invalid provisions.

 

13.4        Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties to the other shall be in writing, delivered personally

 

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or by facsimile (and promptly confirmed by personal delivery, first class mail or courier), first class mail or courier, postage prepaid (where applicable), addressed to such other Party at its address indicated in the Section 13.4, or to such other address as the addressee shall have last furnished in writing to the addressor and (except as otherwise provided in this Agreement) shall be effective upon receipt by the addressee.

 

	
To   MPC:
    	
 
    	
Mitsubishi   Pharma Corporation
    
	
 
    	
 
    	
2-6,   Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo 103-8405,
    
	
 
    	
 
    	
Japan
    
	
 
    	
 
    	
Attn:   Head of Corporate Licensing Department
    
	
 
    	
 
    	
Fax:   +81-3-3241-4913
    
	
 
    	
 
    	
Phone:   +81-3-3241-4524
    
	
 
    	
 
    	
 
    
	
To   LICENSEE:
    	
 
    	
Cyrenaic   Pharmaceuticals, Inc.
    
	
 
    	
 
    	
47   Hulfish Street
    
	
 
    	
 
    	
Suite 310
    
	
 
    	
 
    	
Princeton   NJ 08542
    
	
 
    	
 
    	
United   States of America
    
	
 
    	
 
    	
Attn:   Jerry Karabelas
    
	
 
    	
 
    	
Fax:   001-609-683-5787
    
	
 
    	
 
    	
Phone:   001-609-683-3662
    
	
 
    	
 
    	
 
    
	
With   a copy to:
    	
 
    	
Cyrenaic   Pharmaceuticals, Inc.
    
	
 
    	
 
    	
47   Hulfish Street
    
	
 
    	
 
    	
Suite 310
    
	
 
    	
 
    	
Princeton   NJ 08542
    
	
 
    	
 
    	
United   States of America
    
	
 
    	
 
    	
Attn:   Lorenzo Pellegrini
    
	
 
    	
 
    	
Fax:   001-609-683-5787
    
	
 
    	
 
    	
Phone:   001-609-683-3677
    
	
 
    	
 
    	
 
    
	
And   with a copy to:
    	
 
    	
Index   Ventures
    
	
 
    	
 
    	
2   rue Jargonnant
    
	
 
    	
 
    	
1207   Genève
    
	
 
    	
 
    	
Switzerland
    
	
 
    	
 
    	
Attn:   Michèle Ollier
    
	
 
    	
 
    	
Fax:   0041-22-737-0099
    
	
 
    	
 
    	
Phone:   0041-22-737-0026
    

 

13.5        Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of New York, the U.S. without regard to the conflicts of law principles

 

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thereof except matters of patent law, which shall be determined in accordance with the national intellectual property laws relevant to the Patent Right in question.

 

13.6        Dispute Resolution.

 

13.6.1     The Parties agree to attempt initially to solve all claims, disputes, or controversies arising under, out of, or in connection with this Agreement (a “Dispute”) by conducting good faith negotiations. Any Disputes which cannot be resolved by good faith negotiation within twenty (20) business days, shall be referred, by written notice from either Party to the other, to the Chief Executive Officer of each Party. Such Chief Executive Officers shall negotiate in good faith to achieve a resolution of the Dispute referred to them within twenty (20) business days after such notice is received by the Party to whom the notice was sent. If the Chief Executive Officers are unable to settle the Dispute between themselves within twenty (20) business days, they shall so report to the Parties in writing. The Dispute shall then be referred to mediation as set forth in the Section 13.6.2.

 

13.6.2     Upon the Parties receiving the Chief Executive Officers’ report that the Dispute referred to them pursuant to Section 13.6.1 has not been resolved, a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party. The Parties shall refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. During such period, the Parties shall continue to make good faith efforts to amicably resolve the dispute without arbitration. If the Parties have not reached a settlement during that period the arbitration proceedings shall go forward and be governed by the rules of Conciliation and Arbitration of the International Chamber of Commerce (“ICC”) then in force. Each such arbitration shall be conducted by a panel of three arbitrators: one arbitrator shall be appointed by each of LICENSEE and MPC and the third arbitrator, who shall be the Chairman of

 

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the tribunal, shall be appointed by the two-Party appointed arbitrators. Any such arbitration shall be held in London, England or such other place as may be mutually agreed upon in writing by the Parties. The language of the arbitration shall be English.

 

13.6.3     The tribunal shall issue its award within forty-five (45) days after the date on which the arbitration proceedings have closed. The arbitrators shall have the authority to grant specific performance. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. In no event shall a demand for arbitration be made after the date when institution of a legal or equitable proceeding based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. Each Party shall bear its own costs and expenses incurred in connection with any arbitration proceeding and the Parties shall equally share the cost of the mediation and arbitration levied by the ICC.

 

13.7        Competing Product. LICENSEE or its Affiliate to whom it sublicenses its rights under this Agreement, shall not market or sell any Competing Product as long as the Compound is either an active development candidate or the Product is being marketed.

 

13.8        LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY EXCEPT TO THE EXTENT OF ANY SUCH DAMAGES PAID TO A THIRD PARTY IN CONNECTION WITH A CLAIM MADE BY SUCH PARTY FOR WHICH A PARTY IS RESPONSIBLE TO INDEMNIFY THE OTHER PARTY PURSUANT TO SECTION 12.1 OR 12.2.

 

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13.9        Further Assurances. At any time or from time to time on and after the date of this Agreement, each Party shall at the request of the other (i) deliver to the other such records, data or other documents consistent with the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of transfer or license, and (iii) take or cause to be taken all such actions, as such Party may reasonably deem necessary or desirable in order for the other Party to obtain the full benefits of this Agreement and the transactions contemplated herein.

 

13.10      Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly superseded by this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties.

 

13.11      Headings. The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof.

 

13.12      Independent Contractors. It is expressly agreed that MPC and LICENSEE shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither MPC nor LICENSEE shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party to do so.

 

13.13      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

 

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hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise.

 

13.14      Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

 

	
Cyrenaic   Pharmaceuticals, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Argeris N. Karabelas, Ph.D.
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Argeris (Jerry) N. Karabelas, Ph.D.
    	
 
    
	
 
    	
 
    
	
Title:   Officer and Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Mitsubishi   Pharma Corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Takeshi Komine
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   Takeshi Komine
    	
 
    
	
 
    	
 
    
	
Title:   President
    	
 
    

 

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Schedule 1.5: Chemical Structure of compound coded as BFB-484

 

BFB-484:                                              [*]

 

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Schedule 1.13: Chemical Structure of MT-210 Compound

 

	
MT-210:
    	
[*]
    

 

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Schedule 1.15: Development Plan

 

[*]

 

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Schedule 1.18: Chemical Structure of compounds coded as BFB-687, BFB-512 and BFB-462

 

	
BFB-687:
    	
[*]
    
	
 
    	
 
    
	
BFB-512:
    	
[*]
    
	
 
    	
 
    
	
BFB-462:
    	
[*]
    

 

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Schedule 1.33: Chemical Structure of Metabolites

 

	
BFB-520   (M1)
    	
[*]
    
	
 
    	
 
    
	
BFB-999   (M2)
    	
[*]
    
	
 
    	
 
    
	
M3
    	
[*]
    
	
 
    	
 
    
	
M4
    	
[*]
    

 

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Schedule 1.36: MPC Patents

 

	
Patent List on MT-210
    	
 
    	
Up Date: 21 June, 2007
    

 

Novel Cyclic Amide Derivatives

- “Basic patent”: Claims include MT-210

 

	
Filling
   Countries
    	
 
    	
Filling No.
    	
 
    	
Filling Date
    	
 
    	
Publication No.
    	
 
    	
Patent No.
    	
 
    	
Status
    	
 
    	
Expiration
   Date
    	
 
    	
Assignee
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
 
    
	
[*]
    	
 
    	
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[*]
    	
 
    	
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[*]
    	
 
    	
MPC
    
	
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Schedule 4.1.1: Services Agreement

 

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Schedule 5.2: Milestone payments

 

(a)           Milestone payments for the Product containing the MT-210 Compound

 

	
 
    	
 
    	
First indication
    	
 
    	
Second
   indication
    	
 
    	
Third indication
    
	
Onset of Phase II(a) Study
    	
 
    	
[*]
    	
 
    	
 
    	
 
    	
 
    
	
Onset of Phase II(b) Study
    	
 
    	
[*]
    	
 
    	
 
    	
 
    	
 
    
	
Onset of Phase II Study
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Onset of Phase III Study
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Application in the U.S.
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Application in the first European Country
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Launch in the U.S.
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Launch in the first European Country
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
When cumulative Net Sales first reach [*]
    	
 
    	
 
    	
 
    	
[*]
    	
 
    	
 
    

 

(b)           Subject to Sections 5.1 and 5.2, additional License Fee and Milestone payments for the Product containing each Alternate Compound

 

	
 
    	
 
    	
First indication
    	
 
    	
Second 
   indication
    	
 
    	
Third indication
    
	
Additional License Fee
    	
 
    	
[*]
    	
 
    	
 
    	
 
    	
 
    
	
Onset of Phase II(a) Study
    	
 
    	
[*]
    	
 
    	
 
    	
 
    	
 
    
	
Onset of Phase II(b) Study
    	
 
    	
[*]
    	
 
    	
 
    	
 
    	
 
    
	
Onset of Phase II Study
    	
 
    	
 
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Onset of Phase III Study
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Application in the U.S.
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Application in the first European Country
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Launch in the U.S.
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Launch in the first European Country
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
When cumulative Net Sales first reach [*]
    	
 
    	
 
    	
 
    	
[*]
    	
 
    	
 
    

 

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Schedule 11.2.10: List of all pre-clinical and clinical studies and trials

 

	
Mitsubishi
   Reference
    	
 
    	
Study
   Report
   Title
    	
 
    	
Facility
    	
 
    	
Study
   Number
    	
 
    	
Report
   Number
    	
 
    	
QA
    	
 
    	
GLP
    	
 
    	
Status
    	
 
    	
IND
   SN#
    	
 
    	
IB (Ver. 1.0
   Reference)
    	
 
    	
IB (Ver. 2.0
   Reference)
    	
 
    	
IB (Ver.
   3.1Reference)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[*]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

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Schedule 11.3.2: Securities Purchase Agreement

 

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