Document:

ex10-20.htm

Exhibit 10.20

STRATEGIC DEVELOPMENT SERVICES AGREEMENT

 

THIS STRATEGIC DEVELOPMENT SERVICES AGREEMENT (the "Agreement"), is made as of February 26, 2007(the "Effective Date"), by and between Cato Research Ltd., a North Carolina corporation ("CATO RESEARCH"), and VIstaGen Therapeutics Inc., a California corporation ("CLIENT). Each of CATO RESEARCH and CLIENT may be referred to herein separately as a "Party" and collectively as the "Parties."

 

WHEREAS, CLIENT is engaged in the evaluation and development of new biologies, pharmaceutical agents and/or other life sciences technologies (collectively, "Products"); and

 

WHEREAS, CATO RESEARCH is a contract research and development organization ("CRO") providing a broad range of services for the evaluation, development and commercialization of Products ("CRO Services"); and

 

WHEREAS, CLIENT wishes to hire CATO RESEARCH, and CATO RESEARCH wishes to be hired by CLIENT, to assist CLIENT with certain aspects of the evaluation and development of CLIENTS Products as specified by CLIENT from time to time; and.

 

WHEREAS, CLIENT, CATO RESEARCH and Cato BioVentures, a North Carolina corporation and the venture capital affiliate of CATO RESEARCH ("CATO BIOVENTURES"), desire to enter into a strategic development relationship with respect to all phases of the development of CLIENTS Products; and

 

WHEREAS, for strategic business development purposes, CATO RESEARCH, acting through CATO BIOVENTURES, has agreed to receive a portion of its compensation under this Agreement in the form of CLIENTS Common Stock as set forth in Exhibit B hereto; and

 

WHEREAS, CLIENT and CATO RESEARCH entered into a Strategic Master Services Agreement dated as of December 3,2004, which they wish to amend, restate and replace in its entirety.

 

NOW, THEREFORE, in consideration of the foregoing premises and the promises, benefits, rights, and obligations set forth below, the Parties agree as follows:

 

1. CRO Services. CATO RESEARCH shall provide CRO Services to CLIENT, as reasonably requested by CLIENT from time to time, in accordance with this Agreement.

  

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2. Request for CRO Services.

2.1 If CLIENT wants CATO RESEARCH to perform CRO Services, CLIENT shall provide CATO RESEARCH with sufficient information to enable CATO RESEARCH to understand the CRO Services being requested and time limitations or other constraints on the project. Within ten (10) business days of its receipt of this information, CATO RESEARCH shall determine in its sole discretion whether it wishes to perform the CRO Services requested by CLIENT and, if it wishes to perform such

 

CRO Services, then CATO RESEARCH shall submit to CLIENT a written "Work Order Request" setting forth the CRO Service specifications and estimated fees and expenses. CLIENT shall then have ten (10) business days from its receipt of the Work Order Request to review, approve, and return it to CATO RESEARCH. If CLIENT does not sign and return the Work Order Request to CATO RESEARCH within ten (10) business days, CATO RESEARCH shall not be obligated to perform the CRO Services described in the Work Order Request.

 

2.2 If, from time to time, CATO RESEARCH considers information from CLIENT concerning requested CRO Services to be inadequate, or if CLIENT considers the CRO Service specifications, fees, expenses or other terms presented by CATO RESEARCH in a proposed Work Order Request to be unacceptable, then CLIENT and CATO RESEARCH shall use reasonable efforts to negotiate in good faith and in a timely manner to reach a mutually acceptable exchange of information and terms of the Work Order Request.

 

2.3 Upon execution and delivery of a Work Order Request by authorized representatives of each of CATO RESEARCH and CLIENT, the Work Order Request shall become part of this Agreement and shall be known as a "Work Order." In the event of a conflict between a Work Order and this Agreement, the terms of this Agreement shall control unless otherwise specifically stated in the Work Order.

 

2.4 Unless otherwise notified by CLIENT, the Parties agree that CATO RESEARCH may assume that any officer of CLIENT signing a Work Order Request on behalf of CLIENT is authorized to do so.

 

3.           Specification and Amendment of CRO Services.

 

3.1           CATO RESEARCH shall use commercially reasonable efforts to perform CRO Services inaccordance with the specifications, instructions, and guidelines in each Work Order and this Agreementin all material respects. The Parties shall work together in good faith to ensure that each Work Orderclearly describes all methods, requirements, and obligations (other than those set forth in thisAgreement) related to the CRO Services to be performed. In the event that a Work Order is unclear,ambiguous, or permits different understandings of the CRO Services to be performed, the Parties shalluse good faith efforts to resolve such ambiguity.

 

3.2           A Work Order may only be amended in writing with the signature of both Parties.

  

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4.           Compensation.

 

4.1 CLIENT shall pay CATO RESEARCH for its CRO Services and expenses in accordance with its current rates or in accordance with a fixed fee, as specified in the Work Order governing such CRO Services. CLIENT shall reimburse CATO RESEARCH for out-of-pocket expenses reasonably incurred and documented by CATO RESEARCH while performing CRO Services under this Agreement including, but not limited to, telephone, facsimile, messenger, postage and other communication costs, document copying and retrieval, on-site and off-site storage fees, computer research fees and filing fees. Subject to the following, CLIENT shall reimburse CATO RESEARCH for reasonabletransportation, lodging, and meal expenses for travel to sites away from CATO RESEARCH'S office, and travel between CATO RESEARCH offices, provided that CLIENT has authorized such travel or such travel is necessary in the ordinary course of business:

 

(a) Airline travel via commercial airline at no more than full coach fare;

(b)  Local travel to sites other than CATO RESEARCH'S office by personal car at a rate not to exceed the prevailing maximum reimbursement rate allowed by the federal government; and

(c)  Local travel at locations remote from CATO RESEARCH'S office by rental car or taxi, whichever is more cost efficient.

 

Travel time shall be billed as work time, with the understanding that, to the extent practical, CATO RESEARCH shall utilize travel time to perform CRO Services for CLIENT.

 

4.2 All payments shall be sent to Cato Research Ltd., Attn: Finance, 4364 South Alston Avenue, Durham, NC 27713. CLIENT shall pay CATO RESEARCH for all CRO Service fees and expenses within thirty (30) days of CLIENT'S receipt of the invoice for such fees and expenses. If all or any portion of an invoice remains unpaid thirty (30) days after CLIENT'S receipt of the invoice, then the unpaid and undisputed amount may accrue an administration fee of 1.25% per month from the date of CLIENT'S receipt of the invoice until paid. CLIENT shall reimburse CATO RESEARCH on demand for all reasonable out-of-pocket costs and expenses CATO RESEARCH incurs in enforcing payment of an overdue invoice, including, without limitation, attorneys' fees and expenses. Payments received from CLIENT by CATO RESEARCH on an overdue invoice shall be first applied to costs of collection, then to accrued interest, and then to the unpaid balance of the invoice. If CLIENT has more than one overdue invoice, CATO RESEARCH may, in its discretion, allocate collection costs among the invoices and apply payments against the invoices.

 

4.3 Notwithstanding any of the foregoing provisions of Sections 4.1 and 4.2 or of any Work Order to the contrary, the special compensation arrangement set forth in Exhibit B to this Agreement will apply to the first $5,000,000 of CRO Services provided by CATO RESEARCH under this Agreement, as this Agreement may be amended from time to time.

 

4.4 CATO RESEARCH may in its sole discretion suspend its performance of CRO Services if an undisputed invoice is one hundred twenty (120) days or more overdue and CATO RESEARCH may refrain from resuming performance of CRO Services until all overdue undisputed invoices have been paid in full.

  

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4.5 Except as otherwise set forth herein, any and all payments made hereunder are nonrefundable.

 

5.     Term and Termination.

 

5.1 The term of this Agreement shall be one (1) year from the Effective Date and the Agreement shall automatically renew for additional one (1) year terms unless, at least sixty (60) days before the expiration of any one (1) year term, a Party gives written notice to the other Party that it does not want to renew this Agreement; provided, however, that if the term of a Work Order extends beyond the term of this Agreement, then this Agreement will continue in effect until the completion or termination of such Work Order and all wind-down CRO Services related to such Work Order.

 

5.2 Either Party may terminate a Work Order upon the other Party's material default under this Agreement with respect to such Work Order, provided that the terminating Party has given the defaulting Party no less than thirty (30) days' prior written notice of such default and the defaulting Party has not cured such default by the end of the notice period.

 

5.3 Either party may terminate a Work Order at any time upon no less than sixty (60) days' prior written notice to the other party.

 

5.4 Upon early termination of a Work Order, CLIENT shall pay CATO RESEARCH for all CRO Services rendered, all non-cancelable obligations of CATO RESEARCH to third parties related to the terminated Work Order and reasonable out-of-pocket expenses incurred through the date of termination in accordance with Section 4 above. In the event of early termination, CATO RESEARCH'S compensation under fixed fee arrangements or for partially completed milestones shall be made on a time and materials basis in accordance with its current rates and CATO RESEARCH shall be paid for all CRO Services performed and related expenses incurred through the date of termination.

 

5.5 Upon early termination of a Work Order, CATO RESEARCH shall inform CLIENT of the extent to which it expects work in progress to be completed as of the termination date and CATO RESEARCH shall (unless otherwise instructed by CLIENT) take steps to wind down work in progress in an orderly fashion. In addition to all other amounts payable to CATO RESEARCH, CLIENT shall pay CATO RESEARCH for such wind-down CRO Services on a time and materials basis at CATO RESEARCH'S current rates for all reasonable and customary wind-down CRO Services performed and expenses incurred by CATO RESEARCH. If CLIENT instructs CATO RESEARCH not to complete such wind-down CRO Services, CATO RESEARCH shall, upon notification of the termination of the Work Order, promptly cease providing CRO Services and incurring costs to the extent practicable. In any such event, CLIENT shall be deemed to have released CATO RESEARCH from all legal liability and to have covenanted not to sue CATO RESEARCH on any claims related to failure to perform and the failure to complete reasonable and customary wind-down CRO Services.

 

5.6 In addition to termination of this Agreement under Sections 5.1, 5.2 and 5.3, at any time CRO Services under all Work Orders have been completed and there is no request for CRO Services pending, either Party may terminate this Agreement by giving written notice of termination to the other Party.

 

  

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5.7 Upon early termination or expiration of a Work Order, CATO RESEARCH may return all files and other materials in its possession related to such Work Order to CLIENT at CLIENT'S reasonable expense.

 

5.8 The remedies provided in Sections 5.4 are not meant to limit any additional remedies, to the extent that they are not inconsistent with such Sections, available to a Party for breach of this Agreement by the other Party.

 

6. Location of CRO Services. CATO RESEARCH shall perform the CRO Services at CATO RESEARCH'S facilities or at such other places as are mutually agreed upon by CATO RESEARCH and CLIENT.

 

7. Confidential Information.

 

7.1 "Confidential Information" of the Disclosing Party is defined as all disclosures by the Disclosing Party or its Affiliates, whether written or oral, including, but not limited to, Disclosing Party's business plans, financial data, proprietary software, technology under development, and marketing information, and any information, software, or other materials created by Receiving Party using, reflecting or including any part of the Confidential Information. For purposes of this Section, the Party disclosing Confidential Information is known as "Disclosing Party" and the Party receiving information is known as "Receiving Party." Disclosing Party shall mark all tangible embodiments of Confidential Information as such prior to providing it to Receiving Party. Confidential Information does not include information that, as evidenced by Receiving Party's written records: (a) is in the public domain when Disclosing Party discloses it to Receiving Party; (b) enters the public domain after Disclosing Party's disclosure to Receiving Party and without any fault of Receiving Party; (c) was known to Receiving Party prior to the disclosure by Disclosing Party, free of any obligation of confidence as evidenced by Receiving Party's written records; (d) is independently developed by Receiving Party without reference to the Confidential Information; or (e) is communicated by a third party to Receiving Party free of any obligation of confidence. For the purposes of this Agreement, "Affiliate" means, with respect to any person, an entity which directly, majority controls, or is majority controlled by, or is under common control with, that person. As used herein, "control" means the power to direct, or cause the direction of, the management and policies of a corporation or other entity whether through the ownership of voting securities, by contract or otherwise.

 

7.2 Receiving Party shall neither use nor reproduce Disclosing Party's Confidential Information except as necessary for: (a) negotiations, discussions and consultations with the personnel or authorized representatives of Disclosing Party; (b) preparing estimates or proposals for submission to Disclosing Party; or (c) for the purpose of performing its obligations under this Agreement. Upon completion of the obligations under this Agreement that use the Confidential Information, or upon termination of this Agreement, Receiving Party shall, when requested by Disclosing Party in writing, promptly return to Disclosing Party all of the Confidential Information provided by Disclosing Party, except that Receiving Party may retain one (1) copy solely for recordkeeping purposes.

 

7.3 Receiving Party shall not disclose, without the prior written consent of Disclosing Party, any of Disclosing Party's Confidential Information to any third party other than Receiving Party's, and itsAffiliates', directors, officers, employees, agents and consultants, hospital authorities, Institutional Review Board members, clinical investigators, and others who must be involved in fulfilling Receiving Party's obligations under this Agreement and who, in each case, (a) need to know such information for the purposes of performing such obligations and (b) are bound by obligations of confidentiality and non-use at least as restrictive as those set forth herein. Receiving Party agrees that it shall take commercially reasonable steps to prevent the disclosure or use of any such Confidential Information by Receiving Party's, and its Affiliates', directors, officers, employees, agents or consultants except as provided in this Agreement.

  

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7.4 During the period in which an obligation of confidentiality exists, if any Disclosing Party Confidential Information is required to be disclosed by Receiving Party to any government or regulatory authority or court entitled by law to disclosure of the same, Receiving Party shall promptly notify Disclosing Party thereof, and Receiving Party shall cooperate with Disclosing Party so as to enable Disclosing Party to: (a) seek an appropriate protective order; (b) make the confidential nature of the Confidential Information known to such governmental or regulatory authority or court; and (c) make any applicable claim of confidentiality in respect of the Confidential Information.

 

7.5 For purposes of this Agreement, the Parties hereby acknowledge and agree that, subject to the exceptions set forth in Section 7.1, this Agreement, and, shall be considered CLIENT'S Confidential Information. Notwithstanding any of the foregoing to the contrary, either Party may disclose the terms of this Agreement hereto to advisors, investors and others on a need-to-know basis under circumstances that reasonably ensure the confidentiality thereof.

 

7.6 Receiving Party's obligations under this Section 7 shall terminate with respect to any Confidential Information of Disclosing Party seven (7) years after the date of disclosure.

 

8. Protected Health Information. The Parties recognize that the Federal Health Insurance Portability and Accountability Act of 1996 and implementing regulations ("HIPAA") require written confidentiality agreements to protect the privacy and security of protected health information (as defined under HIPAA) that may be acquired in the course of performing this Agreement. The parties agree to comply with HIPAA and other applicable laws and governmental regulations governing protected health information.

 

9. Ownership.

 

9.1 CLIENT shall own all right, title, and interest in and to all data, information, improvements, discoveries, inventions, printed materials, and other works, products, and deliverables that CLIENT provides to CATO RESEARCH hereunder as well as all right, title, and interest in and to all data, databases, records, reports, works, products, deliverables, information, improvements, discoveries or inventions that result or are generated from the CRO Services rendered by CATO RESEARCH to CLIENT hereunder (collectively, the "Materials"). CATO RESEARCH hereby assigns to CLIENT all of its copyright, trade secret, trademark, patent, and other propriety rights in such Materials. CATO RESEARCH shall, at CLIENT'S request and expense, assist CLIENT or its nominees to obtain United States and foreign copyright registrations, trademarks, patents, and other legal protection for the Materials. CATO RESEARCH shall execute all papers and give all facts known to it that are necessaryto secure such United States or foreign copyright registrations, trademarks, patents, or other legal protection for the Materials and to transfer to CLIENT all right, title, and interest in and to the Materials.

 

9.2 Notwithstanding the foregoing, CLIENT acknowledges that CATO RESEARCH possesses certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties and assets, including analytical methods, procedures and techniques, computer technical expertise and software, independently developed by CATO RESEARCH that are not related to CLIENT Materials and Confidential Information, including any of the foregoing developed during or incidental to performance of the CRO Services herein, which shall be deemed CATO RESEARCH'S proprietary rights (collectively, "CATO RESEARCH Proprietary Rights"). CLIENT and CATO RESEARCH agree that any of CATO RESEARCH'S Proprietary Rights which are used, improved or modified by CATO RESEARCH under or during the term of this Agreement shall be deemed CATO RESEARCH Proprietary Rights.

 

10.           Representations and Warranties.

 

10.1 CATO RESEARCH represents and warrants that it has the experience, capability, and resources necessary to perform CRO Services under this Agreement in a commercially reasonable manner and that it shall devote the necessary personnel to perform CRO Services hereunder in a commercially reasonable manner. CATO RESEARCH shall be deemed to make this representation and warranty each time it executes a Work Order Request.

  

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10.2 CLIENT represents and warrants that it has the ability to comply with and perform all financial obligations under this Agreement. CLIENT shall be deemed to make this representation and warranty each time it executes a Work Order Request.

 

10.3 Each Party represents and warrants that (a) it has the corporate power and authority to enter into and perform its obligations under this Agreement and any Work Order; (b) entering into and performing this Agreement and any Work Order will not conflict with or result in a violation of any of the terms or provisions, or constitute a default under any of its organizational documents, any mortgage, indenture, lease, contract or other agreement or instrument binding upon it or by which any of its properties are bound, or any permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to it or its properties. Each Party shall be deemed to make this representation and warranty upon entering into this Agreement and each time it executes a Work Order Request.

 

11.           Cato Research Personnel.

 

11.1 CATO RESEARCH is responsible for all aspects of the labor relations of its personnel, including, but not limited to, wages, benefits, discipline, hiring, firing, promotions, pay raises and overtime, as well as job and shift assignments. CLIENT shall have no power or authority in these areas. CATO RESEARCH agrees to pay all contributions and taxes imposed by any federal or state governmental authority with respect to or measured by wages, salaries, or other compensation paid by CATO RESEARCH to persons employed by CATO RESEARCH.

 

11.2 CLIENT understands that the performance of CRO Services requires special skills, training and experience. CLIENT further understands that CATO RESEARCH has expended considerable sums to train its personnel to perform the CRO Services requested by CLIENT from time to time under this Agreement, given them access to experienced and highly skilled practitioners at CATO RESEARCH to enable such personnel to acquire new skills and develop existing skills, and provided its personnel with opportunities to gain valuable experience in performing CRO Services. CLIENT understands that if it were to employ a CATO RESEARCH employee, CLIENT would acquire the advantages of such skills, training and experience; therefore, CLIENT agrees that, unless the Parties agree otherwise, if, during the term of this Agreement or within six (6) months after termination or expiration of this Agreement, CLIENT directly or indirectly employs or solicits and subsequently employs, as an employee or independent contractor, any person, other than Shawn K. Singh, J.D., who is or was employed by CATO RESEARCH during the term of this Agreement and who is or was involved in negotiating, administering or providing CRO Services to CLIENT under this Agreement, then CLIENT shall be required to pay CATO RESEARCH a fee equal to one-half of such person's annual base salary as of the last day of their employment with CATO RESEARCH. Such fee shall be paid to CATO RESEARCH in cash no later than sixty (60) days after the date on which such employee begins employment or contractual work with CLIENT.

  

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12. Indemnification.

 

    12.1           CLIENT shall indemnify, defend and hold harmless CATO RESEARCH and its Affiliates,and the directors, officers, employees and agents of CATO RESEARCH and its Affiliates (each a"CATO RESEARCH Indemnified Party"), from and against all liability, loss, costs, claims, damages,expenses, judgments, awards, and settlements, including, without limitation, actual attorneys' fees orexpenses charged by counsel of the Indemnified Party's choosing (whether or not these are covered byinsurance), whether in tort or in contract, law or equity, that a CATO RESEARCH Indemnified Party mayincur by reason of or arising out of any claim made or response in any legal proceeding directly orindirectly resulting from or related to (a) CATO RESEARCH'S CRO Services, including deliverables,under this Agreement; (b) infringement of, or related to, any intellectual property or proprietary rights ofa third party in relation to CLIENTS Products, programs, procedures, materials, data, or otherinformation used by or on behalf of, or furnished by or on behalf of, CLIENT in connection with thisAgreement or the clinical trials or other projects related to CATO RESEARCH'S CRO Services underthis Agreement; (c) material breach of this Agreement by CLIENT or any other person for whose actionsCLIENT is liable under applicable law; (d) the negligence, intentional misconduct or intentional omissionof CLIENT or any employee, contractor, agent or representative of CLIENT; and (e) any request fordeposition, documents, or other information legally compelled, including, without limitation, by subpoenaor by agreement made in lieu of subpoena, in connection with CLIENTS litigation, arbitration or otherproceeding with any third party; provided, however, that this indemnification shall not extend to anyclaims arising out of (i) breach of this Agreement by CATO RESEARCH or any other person for whoseactions CATO RESEARCH is liable under applicable law; (ii) the violation by CATO RESEARCH, itsdirectors, officers, employees or agents, of applicable law or other governmental requirement; or (Hi) thenegligence, intentional misconduct or intentional omission of CATO RESEARCH or its directors,officers, employees, contractors, agents or representatives..

 

     12.2           CATO RESEARCH shall indemnify, defend and hold harmless CLIENT, its Affiliates, and the directors, officers, employees and agents of CLIENT and its Affiliates (each a "CLIENT Indemnified Party") from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements, including, without limitation, actual attorneys' fees and expenses (whether or not covered by insurance), whether in tort or in contract, law or equity, that a CLIENT Indemnified Party may reasonably incur by reason of or arising out of any claim made by a third party resulting from or related to (a) the negligence, intentional misconduct or intentional omission of CATO RESEARCH or any employee, contractor, agent or representative of CATO RESEARCH; (b) the material breach of this Agreement by CATO RESEARCH or any other person for whose actions CATO RESEARCH is liable under applicable law; or (c) the violation by CATO RESEARCH, its directors, officers, employees or agents, of applicable law or other governmental requirement; provided, however, that this indemnification shall not extend to any claims arising out of: (i) breach of this Agreement by CLIENT or any other person for whose actions CLIENT is liable under applicable law; (ii) the violation by CLIENT, its directors, officers, employees or agents, of applicable law or other governmental requirement; or (iii) the negligence, intentional misconduct or intentional omission of CLIENT or its directors, officers, employees, contractors, agents or representatives.

  

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13.            Insurance.

 

13.1 Prior to commencement of any clinical trials, CLIENT shall secure and then maintain in full force and effect, at no cost to CATO RESEARCH, its Affiliates, and their respective officers, directors and employees (collectively, "CATO RESEARCH Insureds"), customary insurance coverage for all CLIENT Products and clinical trials or other projects related to CRO Services, including, without limitation, errors and omissions, products liability, general liability, and related insurance coverage with policy limits in an amount CLIENT'S senior management reasonably determines to be sufficient to support CLIENT'S indemnification obligations hereunder. Upon completing each clinical trial for which CATO RESEARCH provides CRO Services (each, an "Agreement Clinical Trial"), CLIENT also shall maintain in full force and effect, at no cost to the CATO RESEARCH Insureds, an extended reporting policy for a term of no less than three (3) years after completion of each Agreement Clinical Trial, which policy shall cover claims first made and/or reported after completion of such Agreement Clinical Trial.

 

13.2 CLIENT shall use reasonable efforts to cause CLIENT'S insurance policy(ies) to name the CATO RESEARCH Insureds as additional named insureds and shall indicate that the policy will not be canceled or changed until thirty (30) days after written notice of such cancellation or change is delivered to CATO RESEARCH.

14.           Limitation of Liability. Except as set forth in this Agreement, CATO RESEARCH makes no warranty, either express or implied, including the warranties of merchantability, fitness for a particular purpose, title and non-infringement as to any matter, including, but not limited to, the CRO Services, results of CRO Services, deliverables, reports, analyses, documents, memoranda, or other matter produced or provided under this Agreement. CLIENT agrees that, regardless of the form of any claim, CLIENT'S sole remedy and CATO RESEARCH'S sole obligation with respect to any claims made related to or arising out of this Agreement shall be governed by this Agreement and, In all cases, CLIENT'S remedies shall be limited to, at CATO RESEARCH'S option, correction of the non-conforming CRO Services or reimbursement of payments (excluding payments for expenses) made by CLIENT to CATO RESEARCH for suchnon-conforming CRO Services under the applicable Work Order during the six (6) month period immediately preceding the event for which the claim is made. It is expressly agreed that in no event shall CATO RESEARCH or anyone else who has been involved in the performance of this Agreement on behalf of CATO RESEARCH be liable for any indirect, consequential, incidental, special, punitive, or exemplary damages arising from any legal theory, even if such person had been apprised of the likelihood of such damages occurring; provided that nothing herein shall limit CATO RESEARCH'S obligations under Section 12 hereof.

15.           Investigator Funds.

 

15.1 CATO RESEARCH may, at CLIENT'S request, disburse payments to investigators conducting a clinical study (each, an "Investigator") for which CATO RESEARCH is providing CRO Services to CLIENT. CATO RESEARCH will disburse all such payments (each an "Investigator Fee") in accordance with the provisions of the agreement between CLIENT and the Investigator (each, an "Investigator Agreement"). CATO RESEARCH agrees that it will not unreasonably withhold any Investigator Fee and it will not impose additional restrictions on the terms of payment for the Investigator Fee set forth in the Investigator Agreement.

 

15.2 CLIENT shall provide CATO RESEARCH with the funds to pay each Investigator Fee prior to the date on which CATO RESEARCH is scheduled to disburse such Investigator Fee. If CLIENT does not provide the funds to CATO RESEARCH, then CATO RESEARCH will not disburse such Investigator Fee until it receives the funds from CLIENT. In such event, CLIENT shall be deemed to have released CATO RESEARCH from all legal liability and to have covenanted not to sue CATO RESEARCH on any claims related to failure to disburse the Investigator Fee.

  

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15.3 If CLIENT provides CATO RESEARCH with funds in excess of the total Investigator Fees disbursed by CATO RESEARCH, then CATO RESEARCH shall prepare and send a reconciliation of such funds to CLIENT within ninety (90) days after the early termination or expiration of the Work Order under which CATO RESEARCH was disbursing such Investigator Fees and, upon CLIENT'S approval of the reconciliation, CATO RESEARCH shall return all excess funds to CLIENT.

 

16. Audit. CATO RESEARCH will, on no less than two (2) weeks' notice, during regular business hours, permit a regulatory auditor qualified by education, training, and experience, and who is acceptable to CATO RESEARCH, to have access to CATO RESEARCH'S records pertaining to the CRO Services provided pursuant to this Agreement for the purpose of auditing and verifying such CRO Services. The auditor shall report to CLIENT only those facts and conclusions from the audit that are directly related to CLIENT'S interests. CLIENT shall bear the cost of any audit and CLIENT shall, in addition to any other payment obligations under this Agreement, pay CATO RESEARCH on a time and materials basis at its current rates for the CATO RESEARCH personnel assigned to supervise such audit and any other CATO RESEARCH personnel who are required to participate in such audit. All information obtained from an audit shall be Confidential Information.

 

17. Force Majeure; Other Delays.

 

17.1 In the event that either party shall be delayed in, hindered in, or prevented from the performance of any act required under this Agreement by reason of strike, lockout, labor problems, restrictions of government, judicial orders or decrees, riots, insurrection, terrorism, war, acts of God, inclement weather, or other causes that are beyond the reasonable control of such party, then performance of such act shall be excused until the cause is remedied. The delayed party shall use commercially reasonable efforts to resume performance as soon as possible.

 

17.2 If the action or inaction of CLIENT, a government agency, clinical site, internal review board, or any party working for CLIENT or on CLIENT'S behalf delays CATO RESEARCH'S ability to provide CRO Services to CLIENT under a Work Order for thirty (30) days or more, then CLIENT shall pay CATO RESEARCH a fee (to be determined by CATO RESEARCH in good faith) to ensure that the existing CATO RESEARCH project team assigned to such Work Order is available to resume work when the delay ends. If CLIENT does not pay this retention fee, then CLIENT will pay CATO RESEARCH on an hourly basis at its current rates for all time spent by any new CATO RESEARCH project team members to become familiar with the delayed project.

 

18. Independent Contractor. CATO RESEARCH shall perform CRO Services as an independent contractor and not as CLIENT'S agent, representative or employee. Neither Party has authority to make any statement, representation, or commitment of any kind nor to take any action binding on the other Party without the other Party's prior written consent.

 

19. Use of CLIENT'S Name. CLIENT agrees that CATO RESEARCH may use CLIENTS name as a reference for prospective clients or in literature relating to CATO RESEARCH'S capabilities, provided that such use does not violate Section 7 above.

 

20. Notification. Any notices given hereunder shall be in writing and shall be deemed to have been given on the earlier of personal receipt by an authorized representative of the Party, or receipt at the Party's notice address. Notice may be given by any reliable means including, without limitation, by mail, overnight courier, facsimile, electronic mail, or personal delivery. All notices shall be sent to a Party at its address set forth on the signature page of this Agreement, or to such other address as is given by notice to the other Party.

 

21. Waiver. No waiver of any right or remedy with respect to any occurrence or event shall be valid unless it is in writing and executed by the waiving Party. No such valid waiver shall be deemed a waiver of such right or remedy with respect to such occurrence or event on a continuing basis or in the future unless the waiver states that it is intended to apply continuously or to future events. A waiver shall not excuse a subsequent breach of the same term, unless the waiver so states.

  

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22. Severability. If any provisions of this Agreement are determined to be invalid or unenforceable, those provisions shall be reformed to the extent necessary to comply with law and the parties' intent, or struck if necessary, and the validity and effect of the other provisions of this Agreement shall not be affected.

 

23. Governing Law; Jurisdiction. This Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of California. No conflict-of-laws provision shall be invoked topermit application of the laws of any other jurisdiction. All claims under this Agreement shall be brought in a judicial district that includes San Mateo County, California and the Parties hereby consent to the jurisdiction of such court.

 

24. Dispute Resolution. Any controversy, claim or dispute arising out of, in connection with or relating to this Agreement shall be resolved by binding arbitration pursuant to Exhibit A, with the arbitrator following the Commercial Arbitration Rules of the American Arbitration Association ("AAA") (the "Rules") in effect as of the day the arbitration demand is made. It is the intention of the Parties to resolve any such controversy, claim or dispute by private arbitration without submitting the matter to the AAA. In the event of any inconsistency between the Rules and Exhibit A. Exhibit A shall control. Notwithstanding the foregoing, if damages for a breach are not likely to be an adequate remedy, then either Party shall bring an injunction proceeding before a court of equity in a judicial district that includes San Mateo County, California. The Parties hereby consent to the jurisdiction of such court.

 

25. Survival. The representations and warranties of the Parties in Section 10 shall survive the events to which they relate and survive the expiration or earlier termination of this Agreement and the rights and obligations of the Parties set forth in Sections 4,5, 7,8, 9,11,12,13,14,19,23,24,25 and 26 shall survive expiration or earlier termination of this Agreement.

 

26. Client Obligations. CLIENT shall undertake the following obligations with respect to the performance of this Agreement, in addition to any other obligations outlined in the applicable Work Order, and failure to perform such obligations shall constitute a material breach of this Agreement.

 

(a) CLIENT shall use commercially reasonable efforts to deliver all information and materials required for CATO RESEARCH'S performance of CRO Services in accordance with mutually agreed upon timelines.

 

(b) CLIENT shall immediately apprise CATO RESEARCH of any safety concerns or serious adverse events related to a Product that is the subject of the CRO Services.

 

27.              Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party, which shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement in connection with a merger or the sale of all or substantially all of the assigning Party's assets or stock on the condition that such assignment shall be solely to the acquirer or purchaser of the assigning Party and such acquirer or purchaser must assume the assigning Party's obligations under this Agreement. Notwithstanding the foregoing, CATO RESEARCH may arrange for its Affiliates to perform CRO Services under this Agreement, with the understanding that CATO RESEARCH will remain legally responsible for such CRO Services.

 

28.            Freedom to Contract. Except with respect to CRO Services for which CLIENT specifically hires CATO RESEARCH to perform under this Agreement, (a) CLIENT is not required to use CATO RESEARCH for any specific work; (b) CLIENT is free to retain others to perform the same or similar CRO Services as offered by CATO RESEARCH; (c) CATO RESEARCH is not required to provide any CRO Services to CLIENT; and (d) CATO RESEARCH is free to provide CRO Services to other clients that are similar to CRO Services provided to CLIENT.

 

  

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29. Entire Agreement. Exhibits to this Agreement and Work Orders are incorporated into and made a part of this Agreement. This Agreement, including the incorporated Exhibits and Work Orders, constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes all prior agreements, whether written or oral, relating to the subject matter hereof. Except as otherwise authorized herein, changes, modifications, and amendments shall be valid only if made in writing and signed by both Parties. To be effective, any agreement between the Parties purporting to amend a term of this Agreement must specifically identify that term's Section number and state the Parties' specific intent to amend that term. CATO RESEARCH'S entry into this Agreement is expressly made conditional on CLIENT'S agreement to the terms set forth herein, not those in any purchase order, confirmation, or similar form, and CLIENT agrees that any additional or different terms in any such form, now or in the future, are void even if the form indicates that it shall control.

 

30. Execution of Agreement. This Agreement shall be void if it is not signed and returned to CATO RESEARCH within thirty (30) days after the date written above. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

 

31. Facsimile Signatures. Facsimile signatures shall be accepted as originals for the purposes of this Agreement and any and all Work Orders executed hereunder.

 

The Parties have executed this Agreement as of the date first written above.

 

CATO RESEARCH:                                CLIENT:

Cato Research Ltd.                                     VistaGen Therapeutics Inc.

4364 South Alston Avenue                         1450 Rollins Rd

Durham, North Carolina 27713-2280       

Name:  Daniel Cato                                   Burlingame, California 94010Name:

Vice President, Operations

 

Title:                                                                  Title:

  

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The Parties have executed this Agreement as of the date first written above.

 

CATO RESEARCH:

Cato Research Ltd.

4364 South Alston Avenue

 

Durham, North Carolina 27713-2280

 

CLIENT.

VistaGen Therapeutics Inc. 1450 Rollins Rd Burlingame, California 94010

 

By: . Name:. Title:

Name:

 

Title:                                                        

  

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EXHIBIT A ARBITRATION PROCEDURES

 

In the event of arbitration under Section 23, the following rules shall apply:

 

1. Limitations Period. The statute of limitations of the State of California applicable to the commencement of a lawsuit shall be applicable to the commencement of arbitration hereunder.

 

2. Location and Language. The location of the arbitration shall be in San Mateo County, California. The arbitration shall be conducted in English and any findings and/or decisions shall be rendered in English.

 

3. Selection of Arbitrator. The arbitration shall be conducted by one arbitrator who is independent and disinterested with respect to the parties, this Agreement, and the outcome of the arbitration (a "neutral arbitrator")- If the parties can not agree on a neutral arbitrator, then each party shall select a neutral arbitrator, who together shall select a third neutral arbitrator to conduct the arbitration. The arbitrator will be selected with consideration given to his or her experience with disputes of the type being submitted (e.g., the nature of the claim and the technology involved) and will, if possible, be a former judge. It is the intent of the parties that the final arbitrator be selected within thirty (30) days after the arbitration demand is first made.

 

4. Case Management. Prompt resolution of any dispute is important to both parties and the parties agree that the arbitration of any dispute shall be conducted expeditiously. The arbitrator is instructed and directed to assume case management initiative and control over the arbitration process (including scheduling of events, pre-hearing discovery and activities, and the conduct of the hearing), in order to complete the arbitration as expeditiously as is reasonably practical to obtain a just resolution of the dispute.

 

5. Remedies. The arbitrator shall follow and apply the applicable law. The arbitrator shall grant such legal or equitable remedies and relief in compliance with applicable law that the arbitrator deems just and equitable, but only to the extent that such remedies or relief could be granted by a state or federal court and as otherwise limited by the terms in this Agreement. No punitive damages may be awarded by the arbitrator. No court action may be maintained seeking punitive damages.

 

6. Expenses. The expenses of the arbitration, including the arbitrator's fees, expert witness fees, and attorney's fees, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator's fees as and when billed by the arbitrator.

 

7. Confidentiality. The parties shall keep confidential the fact of the arbitration, the dispute being arbitrated, and the decision of the arbitrator. Notwithstanding the foregoing, (a) the parties may disclose information about the arbitration to persons who have a need to know, such as directors, trustees, management employees, witnesses, experts, investors, attorneys, lenders, insurers, and others who may be directly affected; (b), if a party has stock that is publicly traded, the party may make

 

such disclosures as are required by applicable securities laws or listing rules; and (c) if a party is expressly asked by a third party about the dispute or the arbitration, the party may disclose and acknowledge in general and limited terms that there is a dispute with the other party which is being (or has been) arbitrated.

  

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EXHIBIT B

 

Strategic Equity-based Compensation Arrangement for CRO Services

 

1.      Background

 

1.1 CLIENT is involved in the development of CLIENT'S Products.

 

1.2 CLIENT has requested that CATO RESEARCH undertake certain strategic CRO Services in connection with CLIENT'S Product development program.

 

1.3 For strategic business development purposes, CATO RESEARCH wishes to accept a portion of its compensation for such strategic CRO Services in restricted Common Stock of CLIENT. "Common Stock" means restricted (i.e., the public resale of which is not yet registered or qualified in accordance with applicable securities regulations) CLIENT Common Stock. Solely for purposes of the SMSA, each share of Common Stock shall be priced at the average closing sale price of CLIENT'S Common Stock as reported on the OTC Bulletin Board (or other applicable securities market) for the ten (10) trading days ending on the first day of the invoice period for which CLIENT first elects to pay for a portion of the CRO Services under the Strategic Equity-Based Compensation Arrangement (as defined in Section 4 below).

 

1.4 Specifically, CLIENT has requested, and CATO RESEARCH has agreed, to enter into the "Strategic Equity-Based Compensation Arrangement" described in this Exhibit B.

 

1.5 References in this Exhibit B to "Paragraphs" are references to paragraphs in the body of the Agreement and references to "Sections" are references to sections in this Exhibit B.

 

2.      Definitions

 

Terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement. For purposes of this Exhibit B, the following definitions shall apply:

 

"Affiliate" means, with respect to any person, (i) any person directly or indirectly controlling, controlled by, or under common control with such person, (ii) any person owning or controlling ten percent (10%) or more of the outstanding voting interests of such person, (iii) any officer, director, manager or general partner of such person, or (iv) any person who is an officer, director, manager, general partner, trustee, or holder of ten percent (10%) or more of the voting interests of any person described in clauses (i) through (iii) of this sentence. For purposes of this definition, the term "controls", "is controlled by", or "is under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

  

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"Common Stock" means restricted (i.e., the public resale of which is not yet registered or qualified in accordance with applicable securities regulations) CLIENT Common Stock. Solely forpurposes of the SMSA, each share of Common Stock shall be priced at the average closing sale price of CLIENT'S Common Stock as reported on the OTC Bulletin Board (or other applicable securities market) for the ten trading days ending on the first day of the invoice period for which CLIENT first elects to pay for a portion of the CRO Services under the Strategic Equity-Based Compensation Arrangement (as defined in Section 4 below).

 

"CLIENT Program" means any of CLIENT'S product or technology development programs.

 

"CLIENT Program Services" means the CRO Services that CLIENT requires from CATO RESEARCH to advance its product or technology development programs.

 

"Qualified Financing" means the closing of CLIENT'S going public transaction, which going public transaction shall consist of both (a) the private placement of CLIENT'S Common Stock with gross proceeds to CLIENT of at least $10 million and (b) CLIENT'S merger with and into a public "shell" company which is subject to the U.S. Securities and Exchange Commission's public company reporting requirements under the Securities Exchange Act of 1934, as amended, and whose Common Stock currently trades on the OTC Bulletin Board (or other applicable securities market).

 

"Strategic Equity-Based Compensation Arrangement means the strategic equity-based compensation arrangement described in Section 4 of this Exhibit B.

 

3.           General Terms

 

3.1 Except as provided in this Exhibit B. CLIENT shall compensate CATO RESEARCH in cash for CLIENT Program Services rendered under the Agreement.

 

3.2 CLIENT shall at all times, (i) prior to the closing of the Qualified Financing, reserve Common Stock for issue to CATO BIOVENTURES, and (ii) at and after the closing of the Qualified Financing, reserve Common Stock for issuance to CATO BIOVENTURES, in each case, sufficient to satisfy CLIENT'S obligations under the Strategic Equity-Based Compensation Arrangement.

 

3.3 CATO BIOVENTURES agrees to enter into all agreements and execute all other documents and instruments required to be entered into and executed to comply with this Agreement and applicable securities laws and listing rules.

 

4.           Strategic Equity-Based Compensation Arrangement

 

4.1 With respect to the initial five million dollars ($5,000,000) of CLIENT Program Services rendered by CATO RESEARCH under this Agreement after the Qualified Financing, CLIENT shall have the option, at its sole discretion, to compensate CATO RESEARCH for the then applicable Strategic Equity-Based Compensation component of each monthly invoice with a combination of cash and CLIENT securities, eighty percent (80%) of which will be payable in cash and twenty percent (20%) of which may be paid in CLIENTS Common Stock. Prior to the closing of the Qualified Financing, CLIENT shall pay for CRO Services requested by CLIENT 100% in cash, unless the Parties agree otherwise in writing.

  

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4.2 Unless the Parties amend or restate this Agreement in writing, after CATO RESEARCH has rendered five million dollars ($5,000,000) of CLIENT Program Services to CLIENT after the date of the Qualified Financing, CLIENT shall compensate CATO RESEARCH one-hundred percent (100%) in cash for all additional CLIENT Program Services render by CATO RESEARCH to CLIENT.

 

4.3 Notwithstanding any of the foregoing to the contrary, the Strategic Equity-Based Compensation Arrangement shall apply only to CATO RESEARCH'S fees for the CLIENT Program Services and only to that portion of CATO RESEARCH'S invoices that cover fees for the CLIENT Program Services. CLIENT shall pay CATO RESEARCH one hundred percent (100%) in cash for all reasonable reimbursable travel, pass-through and out-of-pocket expenses incurred under this Agreement by CATO RESEARCH to perform the CLIENT Program Services

 

4.4 CATO RESEARCH will send its customary invoices to CLIENT on a monthly basis, which invoices will reflect both (a) actual CATO RESEARCH charges for the CLIENT Program and (b) the portion of the invoice covered by the Strategic Equity-Based Compensation Arrangement. CLIENT shall have the option, on an invoice-by-invoice basis, to apply all or a portion of the Strategic Equity-Based Compensation Arrangement to each such invoice; provided, however, that with respect to any particular invoice, the maximum amount that can be paid in Common Stock will be limited to eighty percent (80%).ex10-21.htm

Exhibit 10.21

 

LICENSE AGREEMENT

 

THIS AGREEMENT ("Agreement"), effective as of July __, 1999 ("Effective Date"), is entered into by and between NATIONAL JEWISH MEDICAL AND RESEARCH CENTER ("National Jewish"), a non-profit medical and research institution organized under the laws of Colorado and having principal offices at 1400 Jackson Street, Denver, Colorado 80206, and VistaGen, Inc., a corporation having an address at 325 MiddlePeld Road, Mountain View, California, 94043 ("VistaGen").

 

WHEREAS, VistaGen desires to obtain certain rights and license under intellectual property held or otherwise controlled by National Jewish covering the development and use of embryonic cell populations and cell lines invented by Gordon Keller, Ph.D. (hereinafter, "Inventor") and his co-inventors; and

 

WHEREAS, National Jewish is willing to grant such certain rights and license.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, National Jewish and VistaGen agree as follows:

 

SECTION 1 -DEFINITIONS

 

1.1 "Above Market Value" shall mean a dollar amount determined by multiplying the number of shares purchased in an equity investment times the difference between the per share price of the equity investment and the per share price of the immediately preceding equity investment. All references to "shares" in this Agreement shall refer to shares of VistaGen's capital stock calculated on a common stock equivalent basis.

 

1.2 "Biological Assays" shall include any genomics or functional approach, analyses, or determinations of the effects on genetics, phenotypes, genetic expression, and other endpomts of a biological composition using Licensed Technology for identifying or characterizing Discovered Molecules as non-cell based therapeutic or diagnostic products or as targets for identifying such products. In no case shall Biological Assays mean using Licensed Technology to develop genetic or proteomic databases or Screening Systems for marketing such databases or Screening Systems to third parties.

 

1.3 "Screening Systems" shall mean analyses and determinations of the effects on genetics, phenotypes, genetic expression, and other endpoints of chemical or biological compositions using Licensed Technology for: (i) generating commercial database information for marketing to third parties or (ii) prioritizing chemical or biological compositions for commercial development.

 

1.4 "Discovered Molecule" shall mean any separately patentable invention, that is gene, DNA, RNA, protein, or peptide and excluding Novel Derived Cell Lines, the discovery of which relied principally upon the practice of Licensed Technology.

  

  

  

 

1 5    "licensed Technology" shall mean cell populations, cell lines, immortalized cell lines, National Jewish Derived Cell Lines and methods for obtaining, propagating, culuiting, producing, and modifying the same, the use or practice of which in the absence of this Agreement would infringe one or more valid claims of Patent Rights.

 

1.6 "National Jewish Derived Cell Lines" shall mean any cell lines derived or held by National Jewish prior to the Effective Date by methods claimed under Patent Rights and comprising characteristics covered by one or more claims in the Patent Rights and which cell lines are identified as Cell Lines EBHX 1 through EBHX 15 (inclusive) or Cell Line D4T.

 

1.7 "Novel Derived Cell Lines" shall mean cell lines derived or immortalized after the Effective Date by methods claimed under Patent Rights and comprising characteristics covered by one or more claims in the Patent Rights

 

1.8 "Patent Rights" shall mean PA no 08/843,686 and all continuations, CIPs, divisional, foreign counterparts, extensions, and any patents issued therefrom, for which the costs of filing, prosecution, and maintenance has been paid by VistaGen, or by VistaGen and other licensees.

 

1.9 "VistaGen Technology" shall mean inventions, know-how, information, and other property owned or controlled by VistaGen which is not a National Jewish Derived Cell Line or a Novel Derived Cell Line and which, together with Licensed Technology provides a basis for interpretation of a Screening System.

 

1.10 "Territory" shall mean all the countries of the world.

 

1.11 "Sublicensee" shall mean any third party licensed by VistaGen to use Licensed Technology.

 

1.12 "VistaGen Revenues" shall mean (i) all revenues or other income received by VistaGen, and (ii) all gross proceeds received by VistaGen pursuant to the issuance of VistaGen securities (other than common stock issued to employees and consultants), including, without limitation, (a) sales of products or services; (b) research agreement revenues; (c) sales of equity, as calculated below; (d) any gross proceeds (at the time of the transaction) received from the sale of all or part of VistaGen's business, including the fair market value of any property, including securities, received upon such sale; (e) sale of debentures or other convertible instruments, and any other proceeds, revenues, or other income that would normally be disclosed by public companies under Federal securities laws. VistaGen Revenues derived from sales of equity shall include one hundred percent (100%) of all equity issued by VistaGen subsequent to the Effective Date up to 38,000,000; shall include gross proceeds received by VistaGen pursuant to that equity that is Above Market Value on equity raised in excess of $8,000,000; and shall not apply to and shall terminate upon the conclusion of the first equity issuance pursuant to an effective registration statement filed with the Securities and Exchange Commission. Any property other than cash or marketable securities included in VistaGen Revenues shall be valued at the fair market value of such property.

  

  

  

 

1.13   "Net Sales'* shall mean gross revenues for any product, comprising in whole or in part a Discovered Molecule, sold by VistaGen or by any Sublicensee, less the sum of the following:

 

(a)   discounts allowed in amounts customary in the trade;

 

(b)  sales, tariff duties and/or use taxes directly imposed and with reference to particular sales;

 

(c) outbound transportation prepaid or allowed, and

 

(d) amounts allowed or credited on returns.

 

No deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by VistaGen or any Sublicensee, and on its payroll, or for cost of collections. Products shall be considered "sold" when billed out or invoiced.

 

If any such product is sold as a component of a combination of active ingredients, the Net Sales price shall be calculated by multiplying the Net Sales price of the combination product by the fraction A over A + B, in which "A" is the invoiced price of the product portion of the combination and "B" is the invoiced price of the other active ingredients of the combination when sold separately during the same accounting period. In the event that either the product portion of the combination or any of the other active ingredients of the combination were not sold separately during the same accounting period, the Net Sales price shall be calculated by multiplying the net sales price of the combination product by the fraction C over C + D, in which *C* is the standard fairy-absorbed cost of the product portion of the combination, and "D" is the standard fully-absorbed cost of the other active ingredients of the combination, with such costs being determined in accordance with generally accepted accounting practices.

 

SECTION 2 - GRANT OF RIGHTS

 

    2.1     Subject to the terms and conditions of this Agreement, National Jewish hereby grants to VistaGen an exclusive worldwide right and license under Patent Rights, with the right to sublicense, (i) to make, have made, use, sell, offer to sell, and import Screening Systems using Licensed Technology, and <ii) to National Jewish rights to Novel Derived Cell Lines derived solely by parties other than National Jewish employees worldwide for use in Screening Systems. At least thirty days prior to entering into any sublicense for the rights granted under this Section 2.1, VistaGen agrees to inform National Jewish of the terms of such sublicense.   National Jewish shall have the right to comment upon the terms of such sublicenses within ten days of receiving such terms from VistaGen and VistaGen agrees to respond in good faith to such comments within 10 days of receiving them,

 

2.2 Subject to the terms and conditions of this Agreement, National Jewish hereby grants to VistaGen a non-exclusive worldwide right and license under Patent Rights, with the right to grant sublicenses, to make and use Licensed Technology for Biological Assays.

  

  

  

 

2.3 National Jewish hereby grants VistaGen a time-limited, exclusive option to negotiate a license or licenses, under commercially reasonable terms, to National Jewish* s interests in additional applications of Licensed Technology for products and methods other than Screening Systems, Biological Assays, and Novel Derived Cell Lines. Such products and applications shall include, but are not limited to, cell-based therapeutics and gene therapy and gene delivery systems. Such option grant shall remain in effect for 18 months following the effective date of this Agreement and shall be renewable for two additional periods of 18 months each subject to (i) a renewal payment to National Jewish of $15,000 by VistaGen within 30 days of each renewal, and (ii) submission of satisfactory evidence of reasonable commercial due diligence with respect to the commercial potential of such additional applications by VistaGen over the course of the preceding 18-month time period.

 

2.4 National Jewish hereby grants VistaGen a time-limited, exclusive option to negotiate a license, under commercially reasonable terms and consistent with the exclusivity and uses granted in this Agreement, to National Jewish's interests in Novel Derived Cell Lines derived by employees of National Jewish or derived jointly by employees of National Jewish and VistaGen. Such option must be exercised, and a license negotiated, within nine months from the date any such Novel Derived Cell Line is disclosed to VistaGen, after which time National Jewish shall be free to license such Novel Derived Cell Line to any third party for any use other than for use in Screening Systems.

 

2.5 Notwithstanding any other provision of this Agreement, National Jewish hereby reserves the perpetual, royalty-free right for its employees and for Inventor to conduct research and other academic, non-commercial activities using Licensed Technology and Novel Derived Cell Lines licensed to VistaGen hereunder. It is the intent of the parties that National Jewish and Inventor shall be entitled to use Licensed Technology and Novel Derived Cell Lines to the fullest extent, including the right of National Jewish, and any other academic or non-profit employer of Inventor, to contract with third parties to obtain funding for farther research and development, provided that such parties are not granted any rights or licenses or options to the Licensed Technology which are inconsistent with the rights and licenses granted to VistaGen under this Agreement. Further, nothing in this Agreement shall restrict National Jewish, Inventor, or any other academic or non-profit employer of Inventor from distributing National Jewish Derived Cell Lines or Novel Derived Cell Lines to other researchers at academic or non­profit institutions for non-commercial research purposes; provided that National Jewish shall notify VistaGen within 10 days of such distribution for any such distributions from National Jewish, and such parties receiving such distributions from National Jewish are restricted from further distribution of the technology.

 

SECTION 3 - DILIGENCE AND MILESTONES

 

3.1 VistaGen shall use its reasonable best efforts to develop Screening Systems using Licensed Technology and to market high throughput toxicity and efficacy screening services to the biotechnology and pharmaceutical industries,

 

3.2 In addition to the general diligence obligations m Section 3.1, VistaGen shall achieve the following milestones:

	
(a)  

	
No later that the first anniversary of the Effective Date, VistaGen shall (i) establish a VistaGen corporate office and laboratory; (ii) complete technology transfer; and (iii) initiate drug profiling for the database.

  

  

  

	
(b)  

	
No later than the second anniversary of the Effective Date, VistaGen shall: (i) execute at least one third party corporate agreement; (ii) develop the microliter version of the technology for high throughput screening, (iii) bring on line the cDNA profile technology, (iv) grow the company up to at least 25 people, and (v) have populated the database with a reasonable number of drug profiles.

	
(c)  

	
No later than the third anniversary of the Effective Date, VistaGen shall: (i) execute at least two additional third party corporate agreements; and (ii) grow VistaGen consistent with the then current business plan.

 

3.3 National Jewish shall make reasonable efforts to inform VistaGen on a timely basis of the development of Novel Derived Celt Lines produced by National Jewish and disclosed to the Technology Transfer Program.

 

3.4 VistaGen shall make reasonable efforts to inform National Jewish on a timely basis of the development of Novel Derived Cell Lines produced by VistaGen or any Sublicensees.

 

3.5 National Jewish shall inform VistaGen on a timely and reasonable basis of the licensing of any retained Patent Rights to third parties. Such disclosure shall be made in a manner that does not disclose confidential information.

 

SECTION 4 - PAYMENTS AND RECORDS

 

4.1     In partial consideration for the rights and license granted to VistaGen in this Agreement, VistaGen agrees to pay National Jewish the following:

 

   (a)     A non-refundable, non-creditable License Fee of ten thousand dollars

($10,000), due within ten (10) days of the Effective Date;

 

	
(b)  

	
A non-renindable, non-creditable License Fee of sixty-five thousand dollars ($65,000), due within thirty (30) days after VistaGen receives at least one million dollars ($1,000,000) of VistaGen Revenues or within 18 months after the effective date of this Agreement, whichever occurs earlier;

	
(c)  

	
Full reimbursement for all reasonable and customary documented third party costs, not to exceed $65,000, incurred by National Jewish prior to the Effective Date of drafting, filing, prosecution, and maintenance of patent applications and issued patents under Patent Rights, due and payable upon the earliest of (i) thirty (30) days after VistaGen receives at least one million dollars ($1,000,000) of VistaGen Revenues, or (ii) upon the second anniversary of the Effective Date;

	
(d)  

	
Full reimbursement for all reasonable and customary documented third party patent filing, prosecution, and maintenance costs incurred by National Jewish after the Effective Date for patent applications and issued patents under Patent Rights, subject to the provisions of Section 5.5 of this Agreement, due and payable within 30 days of the date such charges are invoiced to VistaGen by National Jewish;

	
(e)  

	
National Jewish shall equally prorate and adjust all past and ftiture patent costs charged to VistaGen as a result under Sections 4.1(c) and 4.1(d) based upon the number of exclusive licensees of the Licensed Technology. This adjustment will be made within 30 days of National Jewish executes a new exclusive license agreement.

  

  

  

	
(f)  

	
Annual Payments of one percent (1%) of VistaGen Revenues up to twenty million dollars ($20,000,000) in each year, plus one half of one percent (0.5 %) of VistaGen Revenues greater than twenty million dollars ($20,000,000) in each year, due and payable on June 1 of each year during the term of this agreement, beginning June 1, 2000; provided that VistaGen shall be obligated to pay a minimum annual payment of at least twenty-five thousand dollars ($25,000) each year.

 

4.2 If VistaGen sublicenses Licensed Technology, National Jewish Derived Cell Lines or Novel Derived Cell Lines derived solely by National Jewish to a third party to practice Screening Systems or Biological Assays, VistaGen shall pay National Jewish sublicense fees equal to fifty percent (50%) of VistaGen Revenue actually received by VistaGen from each such Sublicensee, due and payable within 30 days of receiving such VistaGen Revenue from such Sublicensees. Payments to National Jewish under this Section 4.2 shall be tn addition to any other payments due under this Agreement.

 

4.3 If VistaGen sublicenses Licensed Technology together with VistaGen Technology to a third party to practice Screening Systems or Biological Assays, VistaGen shall pay National Jewish sublicense fees equal to ten percent (10%) of VistaGen Revenues actually received by VistaGen from each such Sublicensee, due and payable within 30 days of receiving such VistaGen Revenue from such Sublicensees. Payments to National Jewish under this Section 4 3 shall be in addition to any other payments due under this Agreement

 

4.4 If VistaGen identifies and characterizes a Discovered Molecule and subsequently licenses rights to such Discovered Molecule to one or more third parties, VistaGen shall pay National Jewish five percent (5%) of any VistaGen Revenues actually received under the terms of such license. In no case shall VistaGen be obligated to pay more than fifty percent (50%) of any VistaGen Revenues actually received. Payments to National Jewish under this Section 4.4 shall be in addition to any other payments due under this Agreement.

 

4.5 If VistaGen sells any products comprising, in whole or in part, a Discovered Molecule, VistaGen shall pay National Jewish a royalty of five percent (5%) of Net Sales of such products. Payments to National Jewish under this Section 4.5 shall be in addition to any other payments due under this Agreement.

 

4.6 If VistaGen derives a Novel Derived Cell Line and National Jewish wants to license such Novel Derived Cell Line to any third party for Biological Assays, VistaGen shall not unreasonably withhold its agreement to such licenses as long as such license does not represent a reasonable commercial threat to VistaGen's business plan. National Jewish shall pay VistaGen fifty percent (50%) of any cash payments National Jewish actually receives from each such licensee.

  

  

  

 

4.7 National Jewish acknowledges that VistaGen may be required to acquire rights to additional intellectual property, without which the practice of Licensed Technology would be impossible ("Necessary Intellectual Properly"). For the purposes of this Section, "Necessary Intellectual Property" shall not include any intellectual property which provides an improved means of practicing Licensed Technology or is primarily related to the practice of VistaGen Technology. The Annual Payments and royalties due and payable to National Jewish under Sections 4.1(f), and 4.5, respectively, may be reduced by the fees and royalties payable to other licensees for Necessary Intellectual Property on a dollar for dollar basis up to fifty percent (50%) of the amounts payable to National Jewish in any year (or quarter, in the case of royalties). The Annual Payment paid to National Jewish, after adjustments provided for by this Section 4.7, shall not be less than the Minimum Annual Payment or fifty percent (50%) of the earned Annual Payment, whichever is greater. And in no event shall royalties paid under Sections 4.2 through 4.5, adjusted for the payment of Necessary Intellectual Property be less than fifty percent (50%) of that which is otherwise due to National Jewish for the calendar quarter, as calculated in the reports required by Section 4 9 below.

 

4.8 No later than June 1 of each year after the Effective Date, VistaGen shall submit an annual report to National Jewish containing financial information sufficient for National Jewish to reasonably verify the accuracy of payments to National Jewish under this Agreement. At a minimum, the annual report will include all information that would normally be disclosed by public companies to the Securities and Exchange Commission.

 

4.9 If VistaGen receives revenues from sales of products comprising a Discovered Molecule, VistaGen shall pay royalties quarterly and provide royalty reports to National Jewish, beginning on the last day of the first calendar quarter after the first sale of a product comprising such Discovered Molecule. The quarterly royalty reports shall itemize, for each product, the date and quantity of each sale, the price invoiced or received, the royalty due to National Jewish, deductions allowed under Section 1.12 of this Agreement, offsetting payments as allowed under Section 4.7, and the net amount payable to National Jewish.

 

4.10 Upon National Jewish's request and at National Jewish's sole expense, VistaGen shall permit an independent Certified Public Accountant selected by National Jewish (except one to whom VistaGen has reasonable objections) to have access during ordinary business hours to such of VistaGen's records as may be necessary to determine, in respect of any year ending not more than three (3) years prior to the date of such request, the correctness of any payment made by VistaGen to National Jewish under this Agreement. Such a request can be made no more than once a year. If a discrepancy in payments favoring either party is discovered, appropriate adjustments will be made to correct the error in a timely fashion. If a discrepancy is discovered which is greater than twenty (10) percent of the amount paid National Jewish, VistaGen shall refund reasonable expenses of a 3rd party auditor within 30 days of receiving an invoice for such expenses from National Jewish.

 

4.11 Interest on Past Due Amounts. VistaGen shall pay National Jewish interest on all payments and royalties past due, at an annual rate equal to the lesser often (10) percent/or the highest rate permitted under applicable law. Any such payments made by VistaGen under this Section 4.10 shall not be construed to cure any breach of this Agreement.

  

  

  

 

4.12 Taxes Withheld. Any income or other tax that VistaGen is required to withhold on behalf of National Jewish with respect to the payments made to National Jewish under this Agreement shall be deducted from said payments prior to remittance to National Jewish; provided, however, that in regard to any tax so deducted, VistaGen shall give or cause to be given to National Jewish such assistance as may reasonably be necessary to enable National Jewish to claim exemption therefrom or credit therefor, and in each case shall furnish National Jewish proper evidence of the taxes paid on its behalf.

 

4.13 VistaGen grants to National Jewish a continuing security interest in VistaGen Technology and Licensed Technology, and any proceeds therefrom, to secure the obligations set forth in Section 4.1 (c). VistaGen agrees to execute all other agreements and documents deemed necessary by National Jewish to effect such security interest within two months of the execution of this Agreement. Such security interest will be subordinated only to the security interests of equipment lessors, but otherwise shall have priority over all other security interests until VistaGen's obligations under Section 4.1 (c) are fully satisfied.

 

SECTION 5 - INTELLECTUAL PROPERTY AND PATENT PROSECUTION

 

5.1 Ownership. The parlies acknowledge that National Jewish is the owner of Patent Rights, and VistaGen shall have no rights whatsoever in Patent Rights or Licensed Technology except as provided for under this Agreement.

 

5.2 Government Rights. This Agreement is subject to all of the terms and conditions of Public Law 96-517, as amended, and VistaGen agrees to take all action necessary on its part to enable National Jewish to satisfy its obligations thereunder. In addition, VistaGen agrees to comply with all applicable laws and regulations regarding exports and patent labeling of products.

 

5.3 Except as provided in this Section 5, National Jewish shall retain the responsibility for prosecution and maintenance of Patent Rights and shall retain authority for decisions regarding such prosecution and maintenance. If National Jewish decides not to maintain and prosecute Patent Rights, VistaGen has the right, but not the obligation, to maintain and prosecute Patent Rights at its discretion.

 

5.4 National Jewish agrees use its reasonable best efforts to provide VistaGen with copies of all official communications related to prosecution and maintenance of Patent Rights within a reasonable time after receiving the communications, and to provide VistaGen with meaningful and timely opportunities to participate in patent prosecution and maintenance decisions and to review and comment on all official patent communications.

 

5.5 VistaGen may, with advance written notice to National Jewish 90 days prior to any non-extendable patent prosecution or maintenance deadline, decline to support the further costs of patent prosecution and maintenance for any patent application under Patent Rights, as otherwise required by Section 4.1(d), provided that the rights embodied in said application granted to VistaGen under this Agreement shall revert to National Jewish, and VistaGen shall have no further rights therein.

  

  

  

 

5.6.           If National Jewish elects to pursue prospective claims by seeking an appeal to the U.S. Federal Circuit or U.S. Supreme Court or if National Jewish elects to pursue prospective claims in an international jurisdiction by appeal or if National Jewish elects to respond to an inter parties interference or opposition proceeding, VistaGen may refuse further payment without loss of existing rights until such time that the appeal or proceeding is successful, if VistaGen has already spent in excess of $30,000 for the prosecution of the claims on appeal in that very jurisdiction or forum

 

SECTION 6 - REPRESENTATIONS AND WARRANTIES

 

6.1 Representations and Warranties bv National Jewish. National Jewish represents and warrants that: (i) to the best of its knowledge, National Jewish is the owner of the entire right, title and interest in and to Licensed Technology and National Jewish

 

Derived Cell Lines; (ii) to the best ofits knowledge, National Jewish is the owner of the entire right, title and interest in and to any and all intellectual property, including without limitation patent applications and patents, under Patent Rights; (iii) National Jewish has the full power, right and authority to grant the right and license granted to VistaGen hereunder, (iv) to the best ofits knowledge. National Jewish has obtained all necessary assignments from all inventors named in applications under Patent Rights prior to the Effective Date, and (v) National Jewish has the full power, right, and authority to enter into this Agreement and to carry out its obligations hereunder.

 

6.2 Representation and Warranty by VistaGen. VistaGen represents and warrants that VistaGen has the full power, right, and authority to enter into this Agreement and to carry out its obligations hereunder

 

6.3 Limitation of Warranty EXCEPT FOR THE EXPRESS WARRANTEES SET FORTH IN SECTIONS 6.1 AND 6.2, NATIONAL JEWISH AND VISTAGEN GRANT NO WARRANTEES, EXPRESS OR IMPLIED, EITHER IN FACT OF BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND NATIONAL JEWISH AND VISTAGEN EACH SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTY OF QUALITY, WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF NONINFRINGEMENT.

 

SECTION 7 - INFRINGEMENT

 

7.1 Each party shall inform the other promptly in writing of any alleged infringement of the Patent Rights by a third party and of any available evidence thereof Each party shall use reasonable efforts, and cooperate with the other party, to terminate any infringement without litigation.

 

7.2 VistaGen shall have the right, but shall not be obligated, to prosecute at its own expense all infringements of the Patent Rights for use in Screening Systems. No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the consent of National Jewish, which consent shall not unreasonably be withheld. VistaGen may include National Jewish as a party in any such suit subject to indemnifying National Jewish and its affiliates against any order for costs or other damages that may be made against National Jewish or its affiliates in such proceedings.

  

  

  

 

7.3 In the event that VistaGen shall undertake the enforcement and/or defense of the Patent Rights by litigation, VistaGen may withhold up to fifty percent (50%) of all Annual Payments otherwise due National Jewish under Article 4 hereunder and apply the same toward reimbursement of up to half of VistaGen's reasonable and customary, documented, third party expenses, including reasonable attorneys' fees, in connection therewith, incurred during that reporting period. VistaGen shall not withhold any additional amounts under this paragraph than are necessary to reimburse fifty (50) percent of expenses and attorneys' fees actually incurred as of the date such amounts are payable

 

to National Jewish, and in no case shall National Jewish be paid less than fifty (50) percent of the amount due.

 

7.4 If within six (6) months after having been notified of any alleged infringement, VistaGen shall have been unsuccessful in persuading the alleged infringer to desist or shall not have brought and shall not be diligently prosecuting an infringement action, or if VistaGen shall notify National Jewish at any time prior thereto of its intention not to bring suit against any alleged infringer in the Territory, then, and in those events only, National Jewish shall have the right, but shall not be obligated, to prosecute at its own expense any infringement of the Patent Rights in the Territory. The total cost of any such infringement action commenced or defended solely by National Jewish shall be borne by National Jewish. Any award paid by infringers as a result of such action shall be retained by National Jewish, except for any reasonable and customary, documented, third party legal expenses incurred by VistaGen for cooperative actions taken at the written request of National Jewish.

 

7.5 In the event VistaGen initiates or carries on legal proceedings to enforce Patent Rights against any alleged infringer, any award paid by third parties as result of such proceedings (whether by way of settlement or otherwise) shall First be applied to reimbursement of unreimbursed, reasonable and customary, documented, third party legal fees and expenses incurred by VistaGen, then toward reimbursement of any unreimbursed reasonable and customary, documented, third party legal fees and expenses of National Jewish, then, if applicable, toward reimbursement of National Jewish for the amount of any payments withheld pursuant to Section 7.3, and then the remainder shall be divided among the parties in direct proportion to each party's Risked Capital For the purposes of this Section 7.5 only, "Risked Capital" shall mean (i) for National Jewish, the unreimbursed third party legal fees of this Section 7.5 plus amounts withheld by VistaGen pursuant to Section 7.3, and (ii) for VistaGen, the unreimbursed third party legal fees of this Section 7.5.

 

7.6 In the event that a declaratory judgment action alleging invalidity or noninfringement of any of the Patent Rights shall be brought against VistaGen, National Jewish, at its option, shall have the right, within thirty (30) days after commencement of such action, to intervene and participate in defense of the action at its own expense.

 

7.7 In any infringement suit as either party may institute to enforce the Patent Rights pursuant to this Agreement, the other party hereto shall, at the request and expense of the party initiating such suit, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

  

  

  

 

7.8 VistaGen shall have the sole right in accordance with the terms and conditions herein to sublicense any alleged infringer in the Territory for future use of the Patent Rights in Screening Systems. Any payments or royalties as part of any suchsublicense shall be shared with National Jewish by mutual agreement, under terms as consistent with Article 4 as possible.

 

SECTION 8 - TERM AND TERMINATION

 

8.1 Term. The term of this Agreement shall commence on the Effective Date and continue in fiill force and effect until expiration of the last valid claim under Patent Rights, unless earlier terminated as otherwise provided in this Agreement.

 

8.2 Termination bv VistaGen. VistaGen may terminate this Agreement at any time for any reason, such termination to be effective sixty (60) days after the date of receipt by National Jewish of VistaGen's written notice of termination.

 

8.3 Termination for Breach or Default. In the event that either party to this Agreement shall be in breach or default of an obligation under this agreement and shall fail to remedy such breach or default within sixty (60) days after receipt of written notice thereof by the other party, where such notice will contain a full description of the event or occurrence constituting a breach of the Agreement, the non-breaching party to this Agreement shall be entitled to terminate this Agreement upon written notice to the party in breach or default at any time after such sixty (60) day period. Either party may immediately terminate this agreement for fraud, willful misconduct or illegal conduct of the other party upon written notice of same to the other party.

 

8.4 Termination Upon Bankruptcy. If, during the term of this Agreement, VistaGen shall become bankrupt or insolvent or if the business of VistaGen shall be placed in the hands of a receiver or trustee, whether by voluntary act of VistaGen or otherwise, or if VistaGen shall cease to exist as an active business, this Agreement shall, to the extent permitted by law, immediately terminate.

 

8.5 If VistaGen fails to pursue commercialization of the Licensed Technology substantially as described in Section 3, National Jewish shall have the option of terminating this Agreement.

 

8.6 Consequences of Termination. Termination of this Agreement shall not affect the financial obligations of the parties that have accrued prior to the effective date of termination. If VistaGen has sublicensed the rights to any Discovered Molecules to any third parties, such sublicenses shall survive termination of this Agreement, provided that the Sublicensee is not in breach of such sublicense at the time this Agreement is terminated, and provided that the Sublicensee agrees to renegotiate the license with National Jewish, in good faith, for substantially the same terms as it agreed to with VistaGen, taking into account changes which may be necessary to protect National Jewish's mission and non-profit status.

  

  

  

 

8.7 Survival. The following sections of this Agreement are the only sections that shall survive termination of this Agreement for any reason: Section 1; any financial obligations of VistaGen under Sections 4.1,4.2, 4.3, 4.4, or 4.5 which accrued prior to termination; any financial obligations of National Jewish under Section 4.6 that accrued prior to termination; Sections 4.8 and 4.9, for one year following termination; Section 4.10, for three years following termination; Sections 4.11, 4.12, and 4.13; Sections 5,1 and 5.2; any financial obligations of the parties under Section 7 which accrued prior to termination; Section 7.7; Sections 9.1, 9.2, 9.4, 9.6; Section 9.8 , for five years following the termination; Section 9.9; and Section 10.

 

SECTION 9 - MISCELLANEOUS

 

9.1     Notices. It shall be a sufficient giving of any notice, request, report, statement disclosure, or other communication hereunder, if the party giving the same shall deposit a copy thereof in the United States Post Office in certified mail, postage prepaid, addressed to the other party at its address hereinafter set forth or at any other address as the other party shall have theretofore in writing designated:

 

National Jewish:

 

James D. Crapo, M.D.

Executive Vice President for Academic Affairs National Jewish Medical and Research Center 1400 Jackson Street Denver, Colorado 80206

 

VistaQen:

 

H. Ralph Snodgrass President & CEO VistaGen, Inc. 325 Middlefield Road Mounatin View, CA 94043

 

The date of giving any such notice, request, report, statement, disclosure, or other communications, and the date of making any payment hereunder required (provided such payment is received), shall be the actual date of receipt.

 

9.2     Indemnity and Insurance. VistaGen agrees to indemnify, hold harmless and defend National Jewish, its trustees, officers, employees and agents against any and all claims, suits, losses, damages, costs, fees and expenses, including attorney fees, resulting from or arising out of the exercise of this license. VistaGen shall not be responsible for the negligence or intentional wrongdoing of National Jewish. National Jewish agrees to

 

indemnity, hold harmless and defend VistaGen, its officers, directors and agents against any and all claims, suits, losses, damages, costs, fees and expenses, including attorney fees, resulting from or arising out of the breach of any representation of National Jewish in this Agreement. In the event VistaGen or any Sublicensee develops, with the intent to produce, transfer or offer for sale, any product comprising, in whole or in part, a Discovered Molecule or any National Jewish Derived Cell Line or Novel Derived Cell Line, VistaGen or its Sublicensee shall obtain and carry in full force and effect liability insurance which shall protect VistaGen and National Jewish with respect to any and all claims and expenses indemnified in this Section 9,2. The nature and extent of such insurance coverage shall be commensurate with usual and customary industry practices.

  

  

  

 

9.3 Status of Parties. Neither party hereto is an agent of the other party for any purpose whatsoever.

 

9.4 Use of Names. Neither party will, without the prior written consent of the other party, use in advertising, publicity or otherwise, any trade name, trademark, trade device, service mark, symbol, or any abbreviation, contraction or simulation thereof owned by the other party, use the name of any employee or agent of the other party in any publication, publicity, advertising or otherwise, or represent, either directly or indirectly, that any product or service of the other party is a product or service of the representing party, or that it is made in accordance with or utilizes information or documents of the other party. However, each party may acknowledge the existence of this Agreement and the parties hereto, publicly or privately, as necessary for carrying out its business or as required by law. VistaGen shall allow National Jewish to review alt relevant portions of any documents filed with the U.S. Securities and Exchange Commission that contain references to National Jewish Medical and Research Center or this Agreement, such review to be conducted in a timely manner so as not to unreasonably delay such filings.

 

9.5 Entire Agreement. This Agreement, including any schedules or other attachments that are incorporated herein by reference, contains the entire agreement between the parties as to its subject matter. This Agreement merges all prior discussions between the parties and neither party shall be bound by conditions, definitions, warranties, understandings or representations concerning such subject matter except as provided in this Agreement or as may be specified later in writing and signed by the properly authorized representatives of the parties. This Agreement can be modified or amended only by written agreement duly signed by persons authorized to such agreements on behalf of the parties.

 

9.6 Waiver. The failure of a party in any instance to insist upon the strict performance of the terms of this Agreement shall not be construed to be a waiver or relinquishment of any of the terms of this Agreement, either at the time of the party's failure to insist upon strict performance or at any time in the future, and such term or terms shall continue in full force and effect.

 

9.7 Titles. Ail titles and article headings contained in this Agreement are inserted only as a matter of convenience and reference. They do not define, limit, extend, or describe the scope of this Agreement or the intent of any of its provisions.

 

9.8 Confidentiality. All confidential information concerning the subject matter of this Agreement disclosed to one party by the other orally or in written form shall be maintained in confidence by the other party and shall not be disclosed to any other person, firm or agency, governmental or private, or used for purposes other than those set forth in this Agreement, without the prior written consent of the other party, except to the extent such information;

	
(i)  

	
is known at the time of its receipt by the receiving party as documented by written records dated prior to such disclosure; or

	
(ii)  

	
is in the public domain other than through the fault of the receiving party; or

	
(iii)  

	
is subsequently disclosed to the receiving party by a third party who may lawfully do so and who is not under an obligation of confidentiality to the supplying party; or

  

  

  

 

	
(iv)  

	
is required to be disclosed to the Securities and Exchange Commission in tilings by VistaGen therewith or to other governmental agencies to facilitate the issuance of marketing approvals for Products;

	
(v)  

	
is disclosed by VistaGen to potential Sublicensees within the terms of this Agreement, which Sublicensees shall first agree to be bound by the confidentiality obligations contained in this Agreement;

	
(vi)  

	
must reasonably be disclosed by National Jewish to third parties as part of efforts to secure other non-exclusive licenses for identification and characterization of Discovered Molecules; or

	
(vii)  

	
is required to be disclosed in a judicial or administrative proceeding after legal remedies for maintaining the subject matter in confidence have been exhausted.

 

9.9 Financial Terms. Neither party shall disclose the financial terms of this Agreement to any third party (other than the employees of either party) without the prior written consent of the other party, unless such disclosure is otherwise required by law or applicable regulation.

 

9.10 Publications. VistaGen agrees to supply National Jewish with copies of all written confidential documents or presentation materials at least thirty (30) days prior to any publication or oral presentation of those materials, in order to allow National Jewish to review those materials for the purposes of protecting confidential information and intellectual property.

 

9.11 Force Majeure. No failure or omission by the parties hereto in the performance of any obligation of this Agreement shall be deemed a breach of this Agreement or create any liability if the same shall arise from any cause or causes beyond the control of the parties, including, but not limited to, the following: act of God; fire;

 

storm; flood, earthquake; accident; war, rebellion; insurrection; riot; invasion; strike, and lockouts, and provided that such failure or omission resulting from one of the above causes is cured as soon as is practicable after the occurrence of one or more of the above-mentioned causes.

 

9.12 Assignability. This Agreement shall be binding upon and inure to the benefit of respective successors and assigns of the parties hereto, however, a party may only assign its rights hereunder with the prior written consent of the other party, such consent not to be unreasonably withheld or delayed. In order to obtain the other party's written consent, the assigning party shall advise the other party in writing as to the entity to which it wishes to assign this Agreement. The other party shall respond to the assigning party's request within ten (10) days of receipt of the assigning party's notice. If the other party shall refuse to provide its consent, it shall provide its reasons in writing. Failure by the other party to respond within said ten (10) day period shall be deemed consent to the assigning party's request. Notwithstanding the foregoing, VistaGen shall have the right to Assign this Agreement without the prior written consent of National Jewish in connection with the sale or merger of all or substantially all of its assets, provided that VistaGen is not in breach and that the assignee agrees in writing to the terms of this Agreement.

  

  

  

 

 

9.13 Severance. Each clause of this Agreement is a distinct and severable clause and if any clause is deemed illegal, void, or unenforceable, the validity, legality, or enforceability of any other clause or portion of this Agreement will not be affected thereby.

 

SECTION 10 - DISPUTE RESOLUTION

 

10.1    If one of the parties hereto declares that a dispute between the parties has arisen related to this Agreement, such dispute shall, in the first instance, be the subject of good faith negotiations between the parties to resolve such dispute. Meetings to resolve disputes shall be held within thirty (30) days of notice in the jurisdiction of the party that did not first allege the existence of a dispute, unless another location is selected that is mutually acceptable to the parties. Should the negotiations not lead to a settlement of the dispute within thirty (30) days of the date of the meeting, the parties shall refer the dispute to a mutually acceptable mediation service in Salt Lake City, Utah to resolve the dispute. The mediation shall be attended by individuals from within each party who have decision­making authority with respect to the matter in question. If the mediation does not lead to a settlement of the dispute within sixty (60) days after the date of the last meeting to resolve the dispute, then the parties shall submit the issue to final and binding arbitration before a panel of arbitrators under the rules of the American Arbitration Association. Unless the parties otherwise agree, arbitration will be held in the jurisdiction of the party that did not first allege the existence of the dispute. The panel of arbitrators shall consist of three parties: one selected by each party, as well as a disinterested third party that the two arbitrators shall name. The third arbitrator shall be a person who has had experience in the business of biotechnology or pharmaceutical licensing. If a qualified person in thisfield cannot be found and agreed upon, the two arbitrators shall use their own discretion and select a third arbitrator with qualifications as they deem appropriate- The throe arbitrators shall be given full power to hear and finally determine and dispose of all disputes between the parties that may arise from or that are related to this Agreement. The parties agree that, any provision of applicable law notwithstanding, they will not request, and the arbitrators shall have no authority to award, punitive or exemplary damages against any party. The arbitrators shall make their ruling in writing no later than thirty (30) days after the hearing. The decision of two of the three arbitrators shall be binding on the parties. No party has the right to appeal the ruling, to any court or otherwise. Judgment upon the decision rendered may be entered in any court having jurisdiction or application may be made to such court of a judicial acceptance of the award and an order of enforcement, as the case may be. AH fees and expenses payable with respect to the mediation and arbitration proceedings shall be shared by both parties during the course of the mediation and arbitration proceedings, but, in the case of the arbitration, shall be reimbursed in favor of the prevailing party after the arbitration ruling is rendered.

  

  

  

 

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

 

National Jewish Medical and Research Center

 

By: James Crapo

 

Executive Vice President for Academic Affairs

 

VistaGen, Inc.

 

By: H. Ralph Snodgrass

 

President & CEO

	
Executive Vice President for Academic Affairs

Date:   July 12, 1999

  

  

  

 

AMENDMENT TO LICENSE AGREEMENT

 

THIS AMENDMENT TO LICENSE AGREEMENT (the "Amendment"), effective as of January 25, 2001 ("Effective Date"), is entered into by and between NATIONAL JEWISH MEDICAL AND RESEARCH CENTER ("National Jewish"), a non-profit medical and research institution organized under the laws of Colorado and having principal offices at 1400 Jackson Street, Denver, Colorado 80206, and VistaGen, Inc., a corporation having an address at 325 Middlefield Road, Mountain View, California, 94043 ("VistaGen").

 

WHEREAS, National Jewish and VistaGen executed a License Agreement dated July 12, 1999 related to National Jewish technologies and patents ("the 1999 License Agreement"); and

 

WHEREAS, the parties wish to amend the 1999 License Agreement

 

NOW, THEREFORE, National Jewish and VistaGen agree to amend the 1999 License Agreement as follows:

 

	
1.  

	
In the second paragraph of the 1999 License Agreement, fourth line, delete "(hereinafter, "Inventor")" and add the following language to the end of the clause, after the word "co-inventors" Kyunghee Choi, Ph.D., Meri Firpo, Ph.D., Robert Hawley, Ph.D., and Marion Kennedy, M.Sc. (collectively, "Inventor")".

 

	
2.  

	
In Section 1.8 of the 1999 License Agreement, first line, change the number "08/843,686" to the number "08/343,686", and in the second line, after the words "and any patents issued therefrom" insert the words: "(including, without limitation, issued patent numbers 5,914,268, 5,874,301, and 6,110,739)".

 

	
3.  

	
Replace Section 1.12 of the 1999 License Agreement in its entirety with the following:

 

"1.12 "VistaGen Revenues" shall mean (i) all revenues or other income received by VistaGen and any Subsidiaries (as hereinafter defined), and (ii) all gross proceeds received by VistaGen and its Subsidiaries pursuant to the issuance of VistaGen (and its Subsidiaries) securities (other than common stock issued to employees and consultants), including, without limitation, (a) sales of products or services; (b) research agreement revenues; (c) sales of equity, as calculated below; (d) any gross proceeds (at the time of the transaction) received from the sale of all or part of VistaGen's business (including the sale of any Subsidiaries), including the fair market value of any property, including securities, received upon such sale; (e) sale of debentures or other convertible instruments; and any other proceeds, revenues, or other income that would normally be disclosed by public companies under Federal securities laws. VistaGen Revenues derived from sales of equity shall include one hundred percent (100%) of all equity issued by VistaGen and its Subsidiaries subsequent to the Effective Date up to fifteen million dollars ($15,000,000); shall include gross proceeds received by VistaGen and its Subsidiaries pursuant to that equity that is Above Market Value on equity raised in excess of fifteen million dollars ($! 5,000,000); and shall not apply to and shall terminate upon the conclusion of the first equity issuance pursuant to an effective registration statement filed with the Securities and Exchange Commission. Any property other than cash or marketable securities included in VistaGen Revenues shall be valued at the fair market value of such property."

  

  

  

 

        4. Add a new Section 1.14 to the 1999 License Agreements which shall read:

 

"1.14      "Subsidiary" shall mean any corporation or other entity: which is wholly owned by VistaGen; in which VistaGen holds more than fifty percent (50%) of the issued and outstanding equity; or over which VistaGen has decision making control (e-g-> by virtue of authority to select a majority of the members of the Board of directors).

 

	
5.  

	
In Section 2.1 of the 1999 License Agreement replace the first sentence which currently states "Subject to the terms and conditions of this Agreement, National Jewish hereby grants to VistaGen an exclusive worldwide right and license under Patent Rights, with the right to sublicense, (i) to make, have made, use, sell, offer to sell, and import Screening Systems using Licensed Technology, and (ii) to National Jewish rights to Novel Derived Cell Lines derived solely by parties other than National Jewish employees worldwide for use in Screening Systems." with the following language:

 

"Subject to the terms and conditions of this Agreement, National Jewish hereby grants to VistaGen an exclusive worldwide right and license under Patent Rights, with the right to sublicense to make, have made, use, sell, offer to sell, and import Screening Systems and Biological Assays using Licensed Technology."

 

	
6.  

	
Delete Section 2.2 of the 1999 License Agreement that currently states "Subject to the terms and conditions of this Agreement, National Jewish hereby grants to VistaGen a non-exclusive worldwide right and license under Patent Rights, without the right to grant sublicenses, to make and use Licensed Technology for Biological Assays."

 

	
7.  

	
In Section 2,3 of the 1999 License Agreement, replace Section 2.3 which currently states "National Jewish hereby grants VistaGen a time-limited, exclusive option to negotiate a license or licenses, under commercially reasonable terms, to National Jewish's interests in additional applications of Licensed Technology for products and methods other than Screening Systems, Biological Assays, and Novel Derived Cell Lines. Such products and applications shall include, but are not limited to, cell-based therapeutics and gene therapy and gene delivery systems. Such option grant shall remain in effect for 18 montlis following the effective date of this Agreement and shall be renewable for two additional periods of 18 months each subject to (i) a renewal payment to National Jewish of $15,000 by VistaGen within 30 days of each renewal, and (ii) submission of satisfactory evidence of reasonable commercial dueamend diligence with respect to the commercial potential of such additional applications by VistaGen over the course of the preceding 18-month time period/', with the following language;

  

  

  

 

"Notwithstanding anything to the contrary in this Agreement, prior to granting any rights or license in, to or under the Licensed Technology, excluding licenses to employees and to Inventors as permitted by Section 2.5 of this Agreement but including licenses to Third Parties for funded or sponsored research, for applications other than Screening Systems, Biological Assays and Novel Derived Cell Lines ("Other Applications"), such Other Applications including without limitation cell-based therapeutics and gene therapy and gene delivery systems, National Jewish will first offer to enter into a license agreement with VistaGen for the exclusive rights to the Licensed Technology for Other Applications and all intellectual property covering such applications. For purposes of this Agreement, "Third Party" shall mean any entity or person other than National Jewish, National Jewish1 s employees, an Inventor or VistaGen. To implement the foregoing right of first refusal, National Jewish shall notify VistaGen no later than thirty (30) days after any Third Party expresses to National Jewish a bona fide interest in negotiating a license agreement under Patent Rights for "Other Applications". In the event that VistaGen and National Jewish have not entered into an agreement within sixty (60) days after National Jewish provides such notification to VistaGen ("Negotiation Period"), National Jewish shall be free to enter into a license with respect to - Other Applications with such Third Party, provided that tlie terms ai>d conditions for granting rights and license to such Third Party shall not be more favorable to the Third Party than the terms and conditions last offered to VistaGen in the Negotiation Period without first offering such more favorable terms and conditions to VistaGen for VistaGen's consideration and possible acceptance. If National Jewish has not entered into a license agreement with a Third Party for Other Applications within 120 days after the end of the Negotiation Period, National Jewish shall again comply with the procedures set forth in this Section 2.3 upon receiving from a Third Party a bona fide expression of interest in negotiating any right or license in, to or under the Licensed Technology for Other Applications."

 

8. In Section 3.1. first line, of the 1999 License Agreement, after the words "Screening Systems" insert the words: "and Biological Assays". In Section 3.1, third Hue, after "services", insert the words: "and Biological Assay-related products and services".

 

9. Replace Section 3.2 (b)(ii) of the 1999 License Agreement in its entirety with the following:

 

"develop a format of the technology suitable for high screening consistent with the business plan,"

 

10. Replace Section 3.2 (c)(i) of the 1999 License Agreement in its entirety with the following:

 

  

  

  

 

"execute at least three additional third parry corporate agreements of which at least one is a biological assay discovery-based agreement."

 

	
  

	
11. In Section 4.1 (b), third line of the 1999 License Agreement, replace the words "one million dollars ($1,000,000)" with "three million dollars ($3,000,000)".

 

	
12.  

	
Replace Section 4.1 (f) of the 1999 License Agreement in its entirety with the following:

 

"(f) Annual cash payments (hereinafter "Annual Payments") of one percent (1%) of VistaGen Revenues up to thirty million dollars ($30,000,000) in each calendar year, plus one half of one percent (0.5%) of VistaGen Revenues greater than thirty million dollars ($30,000,000) in each calendar year, due and payable on February 1 of each year for the prior calendar year during the term of this Agreement. The minimum Annual Payment in any year shall be twenty-five thousand dollars ($25,000). The first such Annual Payment shall be made on or before February 16,2001, calculated from the total of all cumulative VistaGen Revenues received prior to January 1,2001."

 

	
13.  

	
In Section 4.2, third line of the 1999 License Agreement, after the words "Screening Systems or Biological Assays", insert the following words:

 

"(but not if sublicensed together with VistaGen Technology)"

 

	
14.  

	
In Section 4.10, tenth line of the 1999 License Agreement, replace the phrase twenty (10)" with "five (5)".

 

	
15.  

	
Section 8.5 of the 1999 License Agreement shall be restated in its entirety to state as follows:

 

"If VistaGen fails to pursue commercialization of the Licensed Technology substantially as described in Section 3, and does not cure such failure within sixty (60) days after written notice thereof is provided to VistaGen by National Jewish, then National Jewish shall have the option of terminating tins Agreement. Notwithstanding the foregoing, if VistaGen's failure is not curable within sixty (60) days, but VistaGen presents to National Jewish, in good faith, a plan for curing such failure in a longer period of time (in any event not to exceed nine (9) months), National Jewish shall not unreasonably withhold its consent to allow VistaGen to pursue such plan (and not to terminate if VistaGen successfully implements such plan) prior to exercising its rights to terminate hereunder."

 

	
16.  

	
Section 9,12, fourteenth line, of the 1999 License Agreement shall be amended by inserting after the word "Agreement" the following:

 

and also provided that the assignee - prior to acquiring the assets of VistaGen --negotiates in good faith with National Jewish an amendment to Section 4.1(f) of this Agreement that provides for compensation to National Jewish that is substantially equivalent and no less favorable to National Jewish than is provided in this Agreement."

  

  

  

 

IN WITNESS THEREOF, the parties hereto have executed this Agreement as of the day

 

and year first written above-

 

National Jewish Medical and Research Center                                                                                                

istaGen, Inc.

James D. Crapo, MD

Executive

H. Ralph Snodgrass, Ph.D. President and CEO

1/29/01

	
'Vice President for Academic Affairs

  

  

  

National Jewish

Medical and Research Center

 

Global Leader in Lung, Allergic and Immune Diseases

 

1400 Jackson Street

Denver, CO 80206

303 388 4461

800 423 ftfi91 http://www.njc.org

 

November 6, 2002

 

Ralph Snodgraas, Ph.D.

CEO

Vistagen, Inc.

1450 Rollins Road

Burlingame, CA 94010

Dear Ralph:

 

As you know, National Jewish Medical and Research Center and Vistagen, Inc. entered into a license agreement dated July 12, 1999 and amended January 25,2001 (hereinafter, the "License Agreement"). The purpose of this letter is;

 

    • to transmit the attached Second Amendment to the License Agreement; and

 

    •  to acknowledge that National Jewish Medical and Research Center agrees that VistaGen has> to National Jewish's satisfaction as of the date of this letter, sufficiently achieved the diligence milestones set forth in the License Agreement under Section 3.2 (a) and (b), based upon your description of the status of those milestones in the attached schedule.

 

National Jewish shall not take any action that may be authorized by the License Agreement in the event of any failure of Vistagen to meet the milestones in Section 3.2 (a) and (b)

 

Sincerely,

 

James D. Crapo, MD

 

Executive Vice President for Academic Affairs

  

  

  

 

 

May 30, 2002

 

Summary of Diligence Milestones: NJMC License Agreement

 

Effective Date: July 1, 1999 amended January 25, 2001

 

Section 3 Diligence and Milestones

 

3.1 Reasonable Best Efforts Clause

 

3.2 Additional Diligence Obligations

 

  

  

  

 

SECOND AMENDMENT TO LICENSE AGREEMENT

 

THIS SECOND AMENDMENT TO LICENSE AGREEMENT (the "Amendment"), effective as of November 4, 2002 ("Effective Date"), is entered into by and between NATIONAL JEWISH MEDICAL AND RESEARCH CENTER ("National Jewish"), a non-profit medical and research institution organized under the laws of Colorado and having principal offices at 1400 Jackson Street, Denver, Colorado 80206, and VistaGen, Inc., a corporation having an address at 1450 Rollins Road. Burlingame, California, 94010 ("VistaGen").

 

WHEREAS, National Jewish and VistaGen executed a License Agreement dated July 12, 1999, and further amended January 25,2001, related to National Jewish technologies and patents ("the 1999 License Agreement"); and

 

WHEREAS, the parties wish to further amend the 1999 License Agreement.

 

NOW, THEREFORE, National Jewish and VistaGen agree to a second amendment of the 1999 License Agreement as follows:

 

1. In Section 3.2 (c) line 1 of the 1999 License Agreement, replace the word " third "

with the word "fourth".

 

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

 

James D. Crapo, M.D.

Executive Vice President for Academic Affairs

 

H. Ralph Snodgrass; Ph.D. President and CEO

Date

 

  

  

  

 

THIRD AMENDMENT TO LICENSE AGREEMENT

 

THIS THIRD AMENDMENT TO LICENSE AGREEMENT (the "Amendment"), effective as of March 3, 2003, is entered into by and between NATIONAL JEWISH MEDICAL AND RESEARCH CENTER ("National Jewish"), a non-profit medical and research institution organized under the laws of Colorado and having principal offices at 1400 Jackson Street, Denver, Colorado 80206, und VistaGen Therapeutics, Inc., a corporation having an address at 1450 Rollins Road, Burlingame, California, 94010 ("VistaGen").

 

WHEREAS, National Jewish and VistaGen executed a License Agreement dated July 12. 1999, as amended January 25, 2001 and November 4, 2002, related to National Jewish technologies and patents ("the 1999 License Agreement"); and

 

WHEREAS, the parties wish to further amend the 1999 License Agreement to clarify certain aspects of the agreement related to sublicensee payments and exclusion of sublicensee purchases of VistaGen equity from the definition thereof.

 

NOW, THEREFORE, National Jewish and VistaGen agree to a third amendment of the 1999 License Agreement as follows:

 

1.0     Add a new Section 1.15 to read as follows:

 

"Sublicensee Payments” shall mean all cash payments received by VistaGen directly in connection with a sublicense to Sublicensees and/or investors of rights hereunder relating to Biological Assays or Screening Systems, including, but not limited to license or sublicense fees, option fees, technology access fees, milestone payments and royalties for the sale of products or services using Patent Rights or Licensed Technology. For the sake of clarity, 'Sublicensee Payments' shall not include any bona fide research and development funding or any payments received by VistaGen from a Sublicensee and/or investor in exchange for issuance of shares of VistaGen's capital stock or options to purchase shares of VistaGen's capital stock or other securities convertible into or exercisable for shares of VistaGen's capital stock, provided that the net proceeds of any such payments for stock or options in excess of the market value for such stock or options at the time such stock is issued or such options are granted shall be included in Sublicensee Payments if the payments arc part of an agreement related to research or development related to Biological Assays or Screening Systems. National Jewish and VistaGen agree to negotiate in good faith an equitable pro-rata portion of such proceeds in excess of market value to be included as Sublicensee Fees provided that such agreement with a Sublicensee and/or investor is related to research and development of technology other than Biological Assays and Screening Systems using Patent Rights and Licensed Technology."

  

  

  

 

2.0     Replace Section 4.2 of the 1999 License Agreement entirely with:

 

"4.2   If VistaGen sublicenses Licensed Technology, National Jewish Derived Cell Lines or Novel Derived Cell Lines derived solely by National Jewish to a third party (o practice Screening Systems or Biological Assays (but not if sublicensed together with VistaGen Technology), VistaGen shall pay National Jewish sublicense fees equal to fifty percent (50%) of any Sublicensee Payments received from each such Sublicensee. Such sublicense fees shall be due and payable to National Jewish within thirty days of receiving such Sublicensee Payments from such Sublicensees. Payments to National Jewish under this Section 4.2 shall be in addition to any other payments due under this Agreement."

 

3.0     Replace Section 4.3 of the 1999 License Agreement entirely with:

 

"4.3   If VistaGen sublicenses Licensed Technology, National Jewish Derived Cell Lines or Novel Derived Cell Lines derived solely by National Jewish, together with VistaGen Technology, to a third party to practice Screening Systems or Biological Assays, VistaGen shall pay National Jewish sublicense fees equal to ten percent (1Q9&) of any Sublicensee Payments received from each such Sublicense executed prior to July 1, 2003 and fifteen percent (15%) of any Sublicensee Payments received from each such Sublicensee executed after July 1,2003. Such sublicense fees shall be due and payable to National Jewish within thirty days of receiving such Sublicensee Payments from such Sublicensees. Payments to National Jewish under this Section 4.3 shall be in addition to any other payments due under this Agreement."

 

4-0     Add a new Section 4.14 to Section 4, which shall read:'

 

"4.14 VistaGen agrees to pay National Jewish One Hundred Thousand Dollars ($100,000) in the form of VistaGen Series C Prcfened stock under terms of its Series C Preferred Stock Purchase Agreement dated December 28, 2004 attached hereto as Exhibit A. VistaGen also agrees to issue National Jewish a 5-year warrant to purchase 80,000 shares of VistaGen Common Stock at a price of $0.60 per share. Within 30 days from the execution date of this 3"1 Amendment, VistaGen will issue all documents necessary to affect such purchase and Notional Jewish shall within 30 days thereafter execute and return such documents.

  

  

  

IN WITNESS THEREOF, the panics hereto have executed this Amendment as of the day and year first written above.

 

National Jewish Medical and Research Center       VistaGen Therapeutics, Inc.

 

[signature sheet to 3 Amendment to License Agreement]

 

IN WITNESS WHEREOF, the parties have executed this Series C Preferred Stock Purchase Agreement as of the date first above written.

 

INVESTOR:

 

NATIONAL JEWTSH MEDICAL AND RESEARCH CENTER

 

Signature Page to the VistaGen Therapeutics, Inc. Series C Preferred Stock Purchase Agreement

 

IN WITNESS WHEREOF, the parties have executed this Fourth Amended and Restated Investors' Rights Agreement as of the date first above written.

 

INVESTOR:

 

NATIONAL JEWISH MEDICAL AND RESEARCH CENTER

 

Signature Page to the VistaGen Therapeutics, Inc. Fourth Amended and Restated Investors' Rights Agreement

 

  

  

  

INSTRUMENT OF CANCELLATION OF INDEBTEDNESS

 

OCTOBER 2005

 

National Jewish Medical and Research Center ("NJMRC") hereby acknowledges that the delivery by VistaGen Therapeutics, Inc. (the "Company") of a certificate representing 166,666 shares of the Company's Series C Preferred Stock (the "Shares") to NJMRC constitutes full satisfaction of $100,000 of the outstanding principal balance owed by the Company to NJMRC pursuant to that certain note, invoice, or other evidence of obligation, a copy of which is attached hereto as Exhibit A. and NJMRC hereby agrees to cancel and forgive such obligation as full consideration for the issuance of the Shares. NJMRC further hereby acknowledges receipt of said certificate representing the Shares.

 

This instrument shall be effective as of the date first written above.

  

  

  

NATIONAL JEWISH  HEALTH                                                                                                            

Technology Science 

Transforming Life                                                                                                                                

Transfer Office

1400 Jackson Street-M206

Denver, CO 80206National Jewish Health

Phone: 303.398.1045

 

4/15/2010

 

 

H. Ralph Snodgrass, Ph.D. President & CSO VistaGen Therapeutics, Inc. 384 Oyster Point Blvd, #8 South San Francisco, CA 94080

 

Dear Dr. Snodgrass,

 

Please find the attached agreement amendment. If you have any questions, please don't hesitate to contact Dr. Emmanuel Hilaire, Manager, Technology Transfer Office at HilaireE@NJHealth.org and:

 

Emmanuel Hilaire, Ph.D. Manager, Technology Transfer Office National Jewish Health, Room M206B 1400 Jackson Street Denver, CO 80206 USA

 

Or myself.

Thank you very much!

 

Sincerely, Stephanie Piersma

 

Program Administrator National Jewish Health Technology Transfer Office 303.398.1045 PiersmaS@NJHealth.org

 

  

  

  

 

FOURTH AMENDMENT TO LICENSE AGREEMENT

 

This Fourth Amendment to License Agreement (the "Amendment"), effective as of April 15, 2010, is entered into by and between National Jewish Health, formally National Jewish Medical and Research Center, ("NJH"), a non-profit medical and research institution organized under the laws of Colorado and having a principal offices at 1400 Jackson Street, Denver, Colorado 80206, and VistaGen Therapeutics, Inc., a California corporation having an address at 384 Oyster Point Blvd., # 8, South San Francisco, CA 94080 ("VistaGen").

 

RECITALS

 

WHEREAS, NJH and VistaGen executed that certain License Agreement dated July 12, 1999, as amended by that certain First Amendment to License Agreement dated January 25, 2001, as further amended by that certain Second Amendment to License Agreement dated November 4, 2002 and as further amended by that certain Third Amendment to License Agreement dated March 1, 2003, pursuant to which NJH granted VistaGen a license to certain of its technologies and patents (collectively, the "1999 License Agreement");

 

WHEREAS, the 1999 License Agreement provides that VistaGen must make royalty payments based upon its receipt of VistaGen Revenues (as defined therein), which excludes gross proceeds VistaGen receives from the sale of its equity securities pursuant to an effective registration statement filed with the Securities and Exchange Commission;

 

WHEREAS, the Company is currently contemplating a possible initial public offering in Canada; and

 

WHEREAS, VistaGen and NJH now desire to further amend the 1999 License Agreement to clarify the definition of "VistaGen Revenues" to exclude from the definition gross proceeds VistaGen receives from the sale of its securities any initial public offering regardless of jurisdiction and any proceeds from the sale of its securities following such initial public offering.

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, VistaGen and NJH hereby agree to amend the 1999 License Agreement as follows:

 

AMENDMENT

 

1,          Definitions. Except as otherwise provided herein, capitalized terms used in this Amendment shall have the definitions set forth in the 1999 License Agreement.

 

2.          Amendment. Effective immediately, Section 1.12 of the 1999 License Agreement shall be deleted in its entirety and amended to read in its entirety as follows:

  

  

  

 

"1.12 "VistaGen Revenues" shall mean (i) all revenues or other income received by istaGen and any Subsidiaries (as hereinafter defined), and (ii) all gross proceeds received by istaGen and its Subsidiaries pursuant to the issuance of VistaGen (and itsSubsidiaries) securities (other than common stock issued to employees and consultants), including, without limitation, (a) sales of products or services; (b) research agreement revenues; (c) sales of equity, as calculated below; (d) any gross proceeds (at the time of the transaction) received from the sale of all or part of VistaGen's business (including the sale of any Subsidiaries), including the fair market value of any property, including securities, received upon such sale; (e) sale of debentures or other convertible instruments; and any other proceeds, revenues, or other income that would normally be disclosed by public companies under Federal securities laws. VistaGen Revenues derived from sales of equity shall include one hundred percent (100%) of all equity issued by VistaGen and its Subsidiaries subsequent to the Effective Date up to fifteen million dollars ($15,000,000), and shall include gross proceeds received by VistaGen and its Subsidiaries pursuant to that equity that is Above Market Value on equity raised in excess of fifteen million dollars ($15,000,000); provided however, that subsection (ii) of this Section 1.12 shall terminate and be of no further force or effect immediately prior to the closing of any initial public offering of the Company's securities in the United States, Canada or any other jurisdiction (the "IPO") and neither the proceeds received by VistaGen in the IPO nor the proceeds received by VistaGen in any offering of its securities (public or private) thereafter shall be deemed "VistaGen Revenues" for purposes of this Section 1.12. Any property other than cash or marketable securities included in VistaGen Revenues shall be valued at the fair market value of such property as determined by VistaGen's Board of Directors."

 

3. Acknowledgment. NJH hereby acknowledges that the Company is currently pursuing an initial public offering in Canada and that it may disclose certain material terms of the 1999 License Agreement as amended by this Amendment.

 

4. Terms of Agreement. Except as expressly modified hereby, all terms, conditions and provisions of the 1999 License Agreement and shall continue in full force and effect.

 

5. Conflicting Terms. In the event of any inconsistency or conflict between the 1999 License Agreement and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control.

 

 

[Signature Page to Follow]

  

  

  

 

IN WITNESS THEREOF, the parties hereto have executed this Amendment as of the day and year first written above.

Name: Title:

 

NATIONAL JEWISH HEALTH

 

By: /s/ Gregory F. Downey, MD

Name: EVP, Academic Affairs

 

VISTAGEN THERAPEUTICS, INC.

 

By: /s/ H. Ralph Snodgrass

Name: H. Ralph Snodgrass, Ph.D.

Title: President

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