Document:

Exhibit 10.3

 

***Text
Omitted and Filed Separately

with the
Securities and Exchange Commission.

Confidential
Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and
240.24b-2.

 

COOPERATION AGREEMENT

 

This Cooperation Agreement (hereinafter called
the “Agreement”) made and entered into this 1st day of October, 2005 (the “Effective Date”), by and between
TorreyPines Therapeutics, Inc.,
a corporation organized and existing under the laws of Delaware (“TPTX”), with principal place of business
at 11085 North Torrey Pines Road, La Jolla, CA 92037, the United States of
America, and Eisai Co., Ltd., a corporation organized and existing under the
laws of Japan (“Eisai”), with its registered office at 6-10 Koishikawa 4-chome,
Bunkyo-ku, Tokyo, 112-8088, Japan.

 

WITNESSETH
THAT:

 

WHEREAS,
Eisai and TPTX executed
the Collaboration Agreement (hereinafter called the “Collaboration Agreement”) made and
entered into the 1st day of
October, 2002 and terminating as of the 1st
day of October, 2005, under which TPTX has engaged in a certain project for the discovery of certain gene targets in the field of
late-onset Alzheimer’s disease in humans
and Eisai obtains the first
negotiation right to license, collaborate, form alliances and/or
partnerships and/or all other forms of utilization of any and all intellectual
property claiming, disclosing or covering any validated target arising out of or resulting from such project and
obtain a right of first refusal on any term
sheet on the terms set forth in the Collaboration Agreement;

 

WHEREAS,
Eisai and TPTX wish to
continue a collaborative relationship between the parties in the field of late
onset Alzheimer’s disease, which is very similar to that set forth in the
Collaboration Agreement; and

 

WHEREAS, Eisai
and TPTX acknowledge that certain data set forth in Exhibit A arose from
or arose out of research activities under the Collaboration Agreement.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is acknowledged, the Parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

As
used in this Agreement, the following terms shall have the following respective
meanings, and except as explicitly noted, each definition shall apply
appropriately to the plural form of the word as well as to the singular:

 

1

 

1.1                               “Affiliate” shall mean any
corporation, firm, association, joint venture, partnership or other entity
which directly or indirectly Owns, is Owned by or is under common Ownership
with either Party. The terms “Owns”, “Owned” and “Ownership” for purpose of
determining status as an Affiliate shall mean ownership of at least fifty
percent (50%) of the voting equity or other ownership interest conferring on
the entity who holds it the power directly or indirectly to control or direct
the affairs of such corporation, firm, association, joint venture, partnership,
or other entity (or such lesser percentage in a particular jurisdiction that
provides such control).

 

1.2                               “Adverse Ruling” shall have the
meaning set forth in Section 6.2.

 

1.3                               “ADR” shall have the meaning set
forth in Section 8.3.

 

1.4                               “Dispute” shall have the meaning
set forth in Section 8.3.

 

1.5                               “Effective Date”
shall mean the date first set forth above.

 

1.6                               “Eisai Invention” shall have the
meaning set forth in Section 2.5.

 

1.7                               “Eisai’s Collaborative
Research Work” shall mean collaborative research work performed by
Eisai set forth in Section 2.5.

 

1.8                               “Extension Term”
shall have the meaning set forth in Section 6.1.

 

1.9                               “FTE” shall mean the
equivalent of work performed during a twelve (12)-month period on a full time
basis by a scientist or other professional (whether an employee or independent
contractor of TPTX) possessing
skills and experience necessary for TPTX to carry out the Project.

 

1.10                        “Gene Target” shall mean a nucleic acid comprising a
nucleotide sequence and its encoded gene product.

 

1.11                        “Indication of Interest” shall have the meaning set forth in Section 3.2(c).

 

1.12                        “Joint Invention” shall have the
meaning set forth in Section 2.5.

 

1.13                        “JSC” shall have the
meaning set forth in Section 2.2.

 

1.14                        “Negotiation
Period” shall have the meaning set
forth in Section 3.2(d).

 

2

 

1.15                        “Neutral” shall have
the meaning set forth in Exhibit B hereto.

 

1.16                        “Party”
and “Parties” shall mean Eisai or
TPTX or both, as applicable.

 

1.17                        “Project”
shall mean the project for the discovery of Gene Targets in the field of
treatment or prevention of Alzheimer’s disease in humans, which TPTX is performing
and will carry out during the Term, as specified in the Project Plan.

 

1.18                        “Project Plan” shall mean the plan
attached as Exhibit C hereto and incorporated herein.

 

1.19                        “Recipient” shall
have the meaning set forth in Section 7.1

 

1.20                        “Term”
shall have the meaning set forth in Section 6.1.

 

1.21                        “Term Sheet” shall have the
meaning set forth in Section 3.2(f).

 

1.22                        “TPTX Property” shall mean any and
all intellectual property (including, without limitation, all patents, patent
applications, trade secrets and know-how) owned or controlled by TPTX claiming,
disclosing or covering any Validated Target resulting from the Project and any
and all TPTX Proprietary Information with respect to any such Validated Target
(including, if applicable, TPTX’s interest in any Joint Invention with respect
to any such Validated Target).

 

1.23                        “TPTX Proprietary Information” shall
mean any and all scientific and technical information and data, know-how and
concepts owned or controlled by TPTX which (a) have been developed by or
on behalf of TPTX prior to the Effective Date in the course of its project for
the discovery of Gene Targets in the field of treatment or prevention of
Alzheimer’s disease in humans, including the project conducted under the
Collaboration Agreement, or (b) is developed by or on behalf of TPTX in
the course of the Project during the Term.

 

1.24                        “Validated
Target” shall mean any Gene Target discovered or identified in the course
of the Project, which is designated by the JSC as validated in accordance with
the Validation Criteria in effect at the time the applicable quarterly report
detailing such Gene Target is submitted to the JSC.

 

3

 

1.25                        “Validation
Criteria” shall mean the genetic and/or biochemical criteria for validating
Gene Targets identified pursuant to the Project attached hereto as Exhibit D
and incorporated by reference herein, as may be amended upon unanimous
agreement of the JSC.

 

ARTICLE 2

COLLABORATION AND GOVERNANCE

 

2.1                               TPTX shall be solely responsible for
conducting the Project and shall use reasonable efforts to conduct the Project
during the Term in accordance with the Project Plan. TPTX shall devote
at least [***]FTEs to the Project during each year of the Term, and Eisai shall
pay TPTX for the services of [***] FTEs as set forth in Section 4.2. TPTX
shall obtain the equipment and supplies necessary to conduct the Project.

 

2.2                               Promptly
following the Effective Date, the Parties shall form a Joint Steering
Committee (“JSC”) which shall, in good faith, manage the Project and the
Project Plan pursuant to the scientific objectives of the Project and the
Project Plan and shall have responsibilities including, but not limited to
those set forth below and as specified elsewhere in this Agreement:

 

(a)                                  establishment
of a working research plan for each year during the Term setting forth the
research activities to be accomplished each quarter during the Term;

 

(b)                                  monitoring
and modifying as necessary the working research plan established under Section 2.2(a);

 

(c)                                  determining
the composition of the FTEs funded by Eisai pursuant to Section 4.2 hereof
(meaning the areas of expertise for FTEs who work on the Project);

 

(d)                                  determining
the types of tasks to be performed by such FTEs;

 

(e)                                  designation
of Gene Targets identified pursuant to the Project as Validated Targets in
accordance with the Validation Criteria;

 

(f)                                    discussing
and determining details of Validation Criteria;

 

(g)                                 discussing
and determining details of Eisai’s Collaborative Research Work; and

 

(h)                                 general
oversight of the Parties’ efforts under this Agreement.

 

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2.3                               The
JSC shall consist of eight (8) members, four (4) of whom shall be
appointed by TPTX and four (4) of whom shall be appointed by Eisai. The
JSC shall be co-chaired by one of the members designated by each Party. The
chairpersons of the JSC will have overall responsibility for coordinating the
decisions of the JSC. All actions taken and decisions made by the JSC shall be
by unanimous written consent, with the representatives of TPTX collectively
having one (1) vote and the representatives of Eisai collectively having
one (1) vote. If the JSC fails to reach unanimous consent with regards to
certain of Eisai’s Collaborative Research Work and such work does not involve the use
of TPTX Property, TPTX Proprietary Information or other confidential
information of TPTX, then Eisai may proceed with such work on its
own and shall provide regular updates to the JSC regarding such work. If the
JSC fails to reach unanimous consent with regards to any action or
decision other than Eisai’s Collaborative Research Work as provided in the
immediately preceding sentence, the proposed action or decision shall
not be implemented; provided however,
that either party may seek resolution of the matter in accordance with Section 8.3.

 

2.4                               The JSC shall meet
at least four (4) times per year during the Term and the Extension Term,
as applicable, or at such greater frequency as the JSC agrees. Such meetings may be
conducted by videoconference, teleconference or in person, as agreed by the
Parties (except that at least two (2) of such meetings per year shall be
conducted in person), and the Parties shall agree upon the time of meetings. Within
thirty (30) days after each meeting, the JSC chairpersons will provide the
Parties with the minutes of such meeting of the JSC, which shall include the
items described in Section 2.2(c) through (g), as appropriate.

 

2.5                               In the event that
either Party reasonably believes that Eisai’s collaborative work can facilitate
accomplishment of the Project, such party can propose to the JSC
that Eisai perform the work. It is agreed and acknowledged that content of
Eisai’s collaborative work which can be proposed by each party shall be exemplified
in Exhibit E.
Upon
receipt of such proposal, the JSC shall discuss and determine a detailed plan
of Eisai’s Collaborative Research Work which includes, but is not limited to,
type of work, validation criteria and schedule, in accordance of Section 2.3.
Once the JSC determines a detailed plan of Eisai’s Collaborative Research Work,
Eisai shall make its reasonable efforts in performing it. In avoidance of
doubt, TPTX’s obligation to use reasonable efforts to conduct the Project set
forth in Section 2.1 shall continue to be effective as it has been even
after the JSC makes any decision with respect to Eisai’s Collaborative Work. Eisai
will provide a summary of Eisai’s Collaborative Research 

 

5

 

Work to the JSC in
conjunction with the quarterly reports submitted by TPTX pursuant
to Section 3.2(a), which summary shall be treated by TPTX as confidential information of Eisai, within the meaning of and
subject to the terms and obligations of Article 7 of this Agreement. If any
discovery and invention is made by Eisai in course of Eisai’s Collaborative
Research Work (an “Eisai Invention”), Eisai shall inform TPTX of such Eisai
Invention, and TPTX has a right to use it during the Term and Extension
Term. If any discovery and invention is made jointly by Eisai and TPTX in
course of Eisai’s Collaborative Research Work (a “Joint Invention”), the
Parties shall inform one another of such Joint Invention, and intellectual
property right arising from such Joint Invention is co-owned by Eisai and TPTX.
The Parties will agree upon which Party will take the lead in filing,
prosecuting and maintaining the intellectual property rights arising from such
Joint Inventions, and the Party that takes the lead in such activities will
keep the other Party informed regarding such activities and take into account
the comments of the other Party with regard to such activities. Each Party
shall have the right, as a co-owner of the intellectual property rights arising
from Joint Inventions, to use and practice such Joint Invention (and may license
to any third party such right to use and practice such Joint Invention and,
upon the grant of such license, will agree to payment of fair and reasonable
compensation to the other Party with respect to such Joint Invention in an
amount to be negotiated in good faith between the Parties), without accounting
to the other, subject to the rights granted to Eisai under Section 3.2(c),
(d), (e) and (f).

 

2.6                               TPTX has
the exclusive right to be the first to negotiate with Eisai a license or other
right to use each Eisai Invention. TPTX may exercise such right by
providing Eisai written notice within[***] days after receipt of notice of such
Eisai Invention from Eisai. If TPTX exercises the right of first negotiation
for an Eisai Invention within such [***] day period, the Parties shall discuss
and determine in good faith terms and conditions of the license within the
[***] days following the date of the notice of exercise by TPTX (or such longer
period as agreed in writing by the Parties). If the Parties fail to
agree on the terms and conditions of the license within such [***] day period
(as may be extended), then Eisai shall be free to grant a license or other
right to the Eisai Invention to a third party, except that for a period of
[***] months following the end of such [***] day period (as may be
extended), Eisai shall not grant a license or other right to the Eisai
Invention to any third party on terms more favorable to such third party than
those last offered by Eisai to TPTX without first offering TPTX such more
favorable terms for a period of at least [***] days.

 

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ARTICLE 3

FIRST NEGOTIATION RIGHT AND RIGHT OF FIRST
REFUSAL

 

3.1                               TPTX
hereby grants to Eisai, during the Term and the Extension Term, as applicable,
the exclusive right to be the first to negotiate terms and conditions to
license, collaborate, form alliances and/or partnerships and/or all other
forms of utilization of TPTX Property in accordance with Section 3.2. TPTX
also grants to Eisai a right of first refusal on any Term Sheet (as defined below) in
accordance with Section 3.2.

 

3.2                               The
Parties agree and acknowledge that Eisai’s exclusive right to be the first to
negotiate and Eisai’s right of first refusal on Term Sheet set forth in Section 3.1
shall be realized and implemented through the following procedures:

 

(a)                                  TPTX
shall submit to the JSC a quarterly report following the end of each quarter
during the Term which provides
true and accurate information regarding the following: (i) a description
of Gene Targets discovered or identified by TPTX in the course of the Project
during the applicable quarter; (ii) information regarding such Gene
Targets as appropriate to enable the JSC to determine whether such Gene Targets
satisfy the Validation Criteria; and (iii) a summary of research
activities under the Project during the applicable quarter. Within [***] days
after the date of such report, with respect to each Gene Target, the JSC shall (i) designate
the Gene Target as a Validated Target; (ii) indicate that the Gene Target
is not a Validated Target; or (iii) indicate that additional experiments
are required before it can determine whether the Gene Target is a Validated
Target. Such additional experiments will be agreed upon by the JSC, and the
results thereof will be described in a report in accordance with this Section 3.2(a).
The contents of reports provided to Eisai hereunder shall be treated by Eisai
as confidential information of TPTX, within the meaning of and subject to the
terms and obligations of Article 7 of this Agreement. Except as provided
in Section 3.2(e), TPTX will not disclose to third parties any information
described in the quarterly report
or summaries without prior written consent of Eisai during the Term, except
that (i) TPTX may disclose information described in the quarterly
report or summaries to potential third party financial investors in TPTX
(provided that any such third party agrees to maintain the confidentiality of
any such information of TPTX provided to such third party by TPTX), and (ii) TPTX
may issue press releases and make scientific presentations and
publications in the ordinary course of its business that generally describe the
status of its research and development activities, provided that such press
releases or scientific presentations do not disclose any Validated Targets to
which Eisai continues to have rights under 

 

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7

 

this Section 3.2
or any Gene Targets discovered or identified in the course of the Project that
the JSC has not yet reviewed to determine whether or not they are Validated
Targets.

 

(b)                                  TPTX
shall allow Eisai’s employees or agents to visit research facilities of TPTX
during the Term and the Extension Term, as applicable, with reasonable prior
notice and at reasonable times and reasonable length of stay in order to enable
Eisai to understand the status of the Project. Such Eisai employees or agents
shall be subject to TPTX’s standard policies regarding visitors to its
facilities and shall be obligated to hold any confidential information of TPTX
in confidence and not to use any such confidential information of TPTX for any
purpose other than as contemplated by this Agreement in accordance with the
provisions of Article 7. In addition, TPTX and Eisai will have regular
communications by telephone and e-mail as reasonably necessary during the Term
regarding the status of the Project.

 

(c)                                  During the Term and the Extension Term, as
applicable, Eisai may express its interest in negotiating the terms and
conditions to license, collaborate, form alliances and/or partnerships
and/or all other forms of utilization of one (1) or more specific
Validated Target within the TPTX Property by providing written notice to TPTX specifying the applicable Validated
Targets of interest within the TPTX Property (an “Indication of Interest”). Eisai
must provide an Indication of Interest with respect to a Validated Target
within [***]) days after the date that the JSC designates such Validated Target.
If Eisai does not provide an Indication of Interest with respect to a Validated
Target within such period, then the right of first negotiation with respect to
such Validated Target shall expire at the end of such period, and Eisai shall
have no further rights with respect to such Validated Target.

 

(d)                                  For
a period of [***] days following the date of an Indication of Interest (the “Negotiation
Period”), the Parties shall negotiate in good faith regarding a proposal for a
license, collaboration, formation of alliances and/or partnerships and/or other
forms of utilization of the TPTX Property specified in such Indication of
Interest. The Negotiation Period may be extended upon written mutual
agreement of the Parties for an additional [***] days, and such additional
[***] day period shall be included in the defined term “Negotiation Period.”  The terms and subject matter of such
negotiations shall be treated by the Parties as confidential information of
both Parties, within the meaning of, and subject to the terms and obligations
of Article 7 of this Agreement.

 

***   Confidential Treatment Requested

 

8

 

(e)                                  In
the event that, by the end of such Negotiation Period, the Parties reach an
agreement with respect to the terms and conditions of a license, collaboration,
formation of alliances and/or partnerships and/or other forms of utilization of
the TPTX Property specified in the applicable Indication of Interest, then the
Parties will enter into a definitive agreement reflecting the terms and
conditions mutually agreed to by the Parties. In the event that, by the end of
such Negotiation Period, the Parties do not reach an agreement with respect to
the terms and conditions of a license, collaboration, formation of alliances
and/or partnerships and/or other forms of utilization of the TPTX Property
specified in such Indication of Interest, then, subject to compliance with the
right of first refusal set forth in Section 3.2(f), Eisai shall have no
rights with respect to TPTX Property specified in such Indication of Interest,
and TPTX shall be free to discuss and enter into an agreement with a
third party with respect to a license, collaboration, formation of alliances
and/or partnerships and/or other forms of utilization of TPTX Property
specified in such Indication of Interest, and to disclose such TPTX Property,
including, without limitation, information described in the relevant
quarterly report and summaries as necessary to facilitate such actions.

 

(f)                                    For
a period of [***] months following the end of such Negotiation Period, TPTX may not
enter into an agreement with respect to the terms and conditions of a license,
collaboration, formation of alliances and/or partnerships and/or other forms of
utilization of the TPTX Property specified in the applicable Indication of
Interest unless (i) TPTX first provides to Eisai a copy of the Term Sheet (as
defined below) for such agreement and (ii) Eisai does not make a
proposal to TPTX in writing that is equivalent or superior to the Term Sheet within
[***]
days after the date that TPTX provided such Term Sheet. As used herein, “Term Sheet”
means the term sheet agreed to by TPTX and a third party in connection with negotiations
with such third party, which describes material terms and conditions of a
definitive agreement regarding specific TPTX Property that was previously
identified in such Indication of Interest. In avoidance of doubt, in the event that Eisai
makes
a proposal to TPTX in writing that is equivalent or more favorable to TPTX than
the Term
Sheet within [***] days after the date that TPTX provided
such Term Sheet, Eisai and TPTX shall enter into good faith negotiations for a
definitive agreement with respect to the TPTX Property specified in such
Term Sheet on the terms set forth in such proposal. In this case, TPTX shall not
enter into a definitive agreement with a third party that is equivalent or less
favorable to TPTX than Eisai’s proposal, unless TPTX and Eisai
do not enter into a definitive agreement with respect to TPTX Property
specified in such Term Sheet within [***] days after such proposal is provided
by Eisai to TPTX. If 

 

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TPTX
consummates a transaction with a third party in compliance with this Section 3.2(f),
then Eisai shall have no rights with respect to the TPTX Property specified in
such Indication of Interest.

 

(g)                                 At
the end of the Term or the Extension Term, as applicable, Eisai shall have no
rights with respect to any TPTX Property, except (i) rights granted under
any license, collaboration, formation of alliances and/or partnerships and/or
other forms of utilization of specific TPTX Property specified in an Indication
of Interest entered into by the Parties in accordance with the procedures
described in this Section 3.2, and (ii) solely during the applicable
Negotiation Period, the right of first negotiation granted under this Section 3.2,
and, if applicable, solely for the [***] month period following the end of such
Negotiation Period, the right of first refusal granted under this Section 3.2,
with respect to TPTX Property specified in any Indication of Interest dated
prior to the end of the Term or the Extension Term as applicable.

 

(h)                                 For
clarification, the Parties acknowledge and agree that both the right of first
negotiation and the right of first refusal granted under this Section 3.2
shall apply only to the TPTX Property and only to a license, collaboration, alliance and/or partnership and/or other form of
utilization of a Validated Target within the TPTX Property (but not to any sale of all of TPTX’s business, or any
portion of its business that includes the TPTX Property, through a merger, sale
of assets or similar transaction), and
shall not apply to any other intellectual property of TPTX, including, without
limitation, any intellectual property of TPTX claiming, disclosing or covering
any Gene Targets other than Validated Targets.

 

(i)                                    If,
during the Term or the Extension Term, as applicable (which, for purposes of
this Section 3.2(i) shall mean the Original Term but shall include
the Additional Period only if TPTX informs Eisai in writing that this Section 3.2(i) is
applicable to the Additional Period pursuant to the procedures described in Section 6.1),
the Board of Directors of TPTX determines to consider the sale of all of its
business, or any portion of its business that includes the TPTX Property,
through a merger, sale of assets or similar transaction (a “Proposed
Transaction”), then before TPTX agrees to the principal terms of a Proposed
Transaction with any third party, TPTX will first advise Eisai in writing that
TPTX is considering a Proposed Transaction. If Eisai does not provide written
notice to TPTX within [***] days after the date of the written notice provided
by TPTX to Eisai regarding a Proposed Transaction that Eisai is interested in
discussing a Proposed Transaction between the Parties, then TPTX may proceed
with a Proposed Transaction with any third party without further obligation to
Eisai under this 

 

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Section 3.2(i).
If Eisai provides written notice to TPTX within [***] days after the date of
the written notice provided by TPTX to Eisai regarding a Proposed Transaction
that Eisai is interested in discussing a Proposed Transaction between the
Parties, then, for a period of [***] days following the date of such written
notice from Eisai (the “Discussion Period”), the Parties shall negotiate in
good faith regarding a Proposed Transaction between TPTX and Eisai. The
Discussion Period may be extended upon written mutual agreement of the
Parties for an additional [***] days, and such additional [***] day period
shall be included in the defined term “Discussion Period.”  The terms and subject matter of such
negotiations shall be treated by the Parties as confidential information of
both Parties, within the meaning of, and subject to the terms and obligations
of, Article 7 of this Agreement. In the event that, by the end of such
Discussion Period, the Parties reach an agreement with respect to the terms and
conditions of a Proposed Transaction between the Parties, then the Parties will
enter into a definitive agreement reflecting the terms and conditions mutually
agreed to by the Parties. In the event that, by the end of such Discussion Period,
the Parties do not reach an agreement with respect to the terms and conditions
of a Proposed Transaction between the Parties, then TPTX may proceed with
a Proposed Transaction with any third party without further obligation to Eisai
under this Section 3.2(i), and TPTX may make disclosures to such
third party of information regarding TPTX, including, without limitation,
information described in reports provided pursuant to Section 3.2(a) (provided
that such third party agrees to maintain the confidentiality of any such
information of TPTX provided to such third party by TPTX). In the event that
TPTX completes a Proposed Transaction with a third party, the rights granted by
TPTX to Eisai under this Agreement shall remain in effect, and such transaction
shall not limit or restrict the rights granted to Eisai under this Agreement. This
Section 3.2(i) shall automatically terminate upon the initial public
offering of Common Stock of TPTX.

 

ARTICLE 4

PAYMENT

 

4.1                               In
consideration for (i) the exclusive right of first negotiation and (ii) the
right of first refusal on Term Sheets set forth in Section 3.1, Eisai
shall pay TPTX [***] U.S. dollars (US$[***]) within [***] days after the
Effective Date.

 

4.2                               Eisai
shall pay TPTX [***] U.S. dollars (US$[***]) per year during the Term as
payment for the [***] FTEs per year used by TPTX for the Project. Such amounts
shall be 

 

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11

 

payable
in equal quarterly installments of [***]U.S. dollars (US$[***]
in advance, with the first quarterly installment due and payable within thirty
(30) days after the Effective Date.

 

4.3                               All
payments made hereunder shall be paid by wire transfer of funds to an account
at TPTX’s designated bank in California, and shall be paid in U.S. dollars.

 

4.4                               The
payments set forth in this Article 4 shall be made without reduction for
any taxes, charges, or remittance fees, provided that TPTX shall be responsible
for any income taxes payable by TPTX on payments received by TPTX under this
Agreement. Eisai shall pay over to the appropriate taxing authorities the
withholding taxes or charges deducted from the payments to TPTX and shall
deliver to TPTX true copies of receipt or tax return covering such tax
payments, and TPTX shall provide Eisai with documentation necessary for Eisai
to file an application with the Japanese Tax Office to avoid or reduce
withholding or other applicable taxes (which TPTX has previously provided to
Eisai).

 

ARTICLE 5

WARRANTIES

 

5.1                               Each
Party warrants that the performance by such Party of any of the terms and
conditions of this Agreement on its part to be performed does not and will
not constitute a breach of any other material agreement or understanding,
written or oral, to which it is a party.

 

5.2                               TPTX
warrants that there are no adverse proceedings, claims or actions pending, or
to the best of TPTX’s knowledge, threatened, relating to any TPTX Proprietary
Information as of the Effective Date, and TPTX shall, to the best of its
knowledge, have the full right and legal capacity to disclose and deliver TPTX
Proprietary Information pursuant to the terms of this Agreement without
violating the rights of third parties. TPTX further warrants that it has the
full right and legal capacity to execute this Agreement, without violating the
rights of third parties.

 

5.3                               Each
Party warrants that it will observe all applicable regulations, rules, codes,
legal and regulatory guidance and laws in performing the Project or Eisai’s
Collaborative Research Work, as applicable.

 

5.4                               TPTX
warrants that each report required to be delivered pursuant to Section 3.2(a) shall
be prepared by TPTX in good faith.

 

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5.5                               Except as expressly set forth herein, EACH
PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, each Party expressly does not warrant
the success of the Project.

 

ARTICLE 6

TERM AND TERMINATION

 

6.1                               This
Agreement shall become effective on the Effective Date and, unless earlier
terminated or extended hereunder, shall continue in effect until the second
anniversary of the Effective Date (the “Term”) and, solely for purposes of Section 3.2
with respect to TPTX’s quarterly report submitted to the JSC following the last
quarter of the Term and activities to be completed pursuant to Section 3.2
following submission of such report, shall continue after the Term until the
date upon which all such activities have been completed in accordance with Section 3.2
(the “Extension Term”). Eisai shall have the one-time right, in its sole
discretion, to extend the original Term, which ends on the second
anniversary of the Effective Date (the “Original Term”), for a period of [***]
months immediately following the end of the Original Term (the “Additional
Period”). If Eisai wishes to exercise such right to extend the Term by the
Additional Period by providing TPTX written notice of such intention on or
prior to the date that is [***] days after TPTX submits the quarterly report
for the quarter immediately preceding the last quarter of the Original Term
pursuant to Section 3.2(a); provided that, if a Gene Target presented in
the quarterly report for the last quarter of the Original Term is designated a
Validated Target by the JSC pursuant to Section 3.2(a), Eisai shall have
[***] days from the date the JSC makes such designation to exercise its right
to extend the Term by the Additional Period pursuant to this Section 6.1. In the
event that TPTX receives Eisai’s intention within the fifteen-day period, TPTX
shall inform Eisai in writing of whether subsection (i) of Section 3.2
is applicable to the Additional Period. Upon receipt of TPTX’s information set
forth in the preceding sentence, Eisai may exercise its right to extend
the Term by written notice to TPTX within [***] days of receipt thereof. If
Eisai extends the Term pursuant to this Section 6.1, Eisai shall pay TPTX (a) an
amount equal to [***] U.S. dollars (US$[***]) on the first day of the 

 

***   Confidential Treatment Requested

 

13

 

Additional
Period and (b) [***] U.S. dollars (US$[***]) per quarter of the
Additional Period, payable quarterly in advance, for FTEs used by TPTX for the
Project during the Additional Period. All such payments shall be made in
accordance with the terms of Article 4. If Eisai extends the Term pursuant
to this Section 6.1, the term “Term” shall automatically include the
Additional Period.

 

6.2                               It
is the Parties’ express intent that consideration shall first and foremost be
given to remedying any breach of this Agreement through the payment of monetary
damages or such other legal or equitable remedies as shall be appropriate under
the circumstances and that there shall only be a limited right to terminate
this Agreement under the following circumstances as a matter of last resort. In
the event that the Neutral, in accordance with the procedures set forth in Section 8.3
and Exhibit B attached hereto and incorporated herein, has rendered a
ruling that a Party has materially breached this Agreement, which ruling
specified the remedies imposed on such breaching Party for such breach (the “Adverse
Ruling”), and the breaching Party has failed to comply with the terms of the
Adverse Ruling within the time period specified therein for compliance, or if
such compliance cannot be fully achieved by such date, the breaching Party has
failed to commence compliance and/or has failed to use diligent efforts to
achieve full compliance as soon thereafter as is reasonably possible, then the
non-breaching Party shall have the right to terminate this Agreement by
providing written notice thereof to the breaching Party.

 

6.3                               The
rights and obligations arising from Sections 2.5 (last three sentences
only), 2.6, 3.2(g) and (h), 5.5 and 6.3, and Articles 7 and 8
(including Exhibit B) and, solely for the period of time and for the
purposes described in such sections, Sections 3.2(d), (e) and (f),
shall survive expiration or termination of this Agreement. Expiration or
termination of this Agreement shall not relieve the Parties of any obligation
accruing prior to such expiration or termination.

 

ARTICLE 7

EXCHANGE OF INFORMATION AND CONFIDENTIALITY

 

7.1                               During
the Term and for [***] years thereafter (and notwithstanding any termination or
expiration of this Agreement), TPTX and Eisai shall not use or reveal or
disclose to third parties any confidential information received from the other
Party or otherwise developed by the other Party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the other Party. For clarification, Joint Inventions 

 

***   Confidential Treatment Requested

 

14

 

shall
be considered confidential information of both Parties. Notwithstanding the
above, the Party to whom confidential information was disclosed (the “Recipient”)
shall not be in violation of this Agreement with regard to disclosure of
information that Recipient can evidence by competent written proof:  (a) is or becomes part of the
public domain subsequent to the time it was communicated to the Recipient by
the other Party through no fault of the Recipient, (b) is already in
Recipient’s possession free of any obligation of confidence at the time it was
communicated to the Recipient, (c) is disclosed to the Recipient by a
third party having the right to do so, which third party did not obtain the
same, directly or indirectly, from the other Party, or (d) is in response
to a valid order by a court or other governmental body (but solely to the
extent of and pursuant to such order), provided that the Recipient provides the
other Party with prior written notice of such disclosure pursuant to Section 7.1(d) in
order to permit the other Party to seek confidential treatment of such
information. The Parties shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others to whom access to such
information is granted.

 

7.2                               Nothing
herein shall be construed as preventing either Party from disclosing any
information received from the other Party to its employees, consultants, agents
and Affiliates, provided that such employees, consultants, agents and
Affiliates have undertaken a similar obligation of confidentiality with respect
to the confidential information.

 

7.3                               No
public announcement or other disclosure to any third party concerning the
existence of or terms of this Agreement shall be made, either directly or
indirectly, by any Party to this Agreement, except as required by applicable
law, rule or regulation, without first obtaining the approval of the other
Party and agreement upon the nature and texts of such announcement or
disclosure. The Party desiring to make any such public announcement or other
disclosure shall inform the other Party of the proposed announcement or
disclosure (pursuant to legal requirement, for recording purposes or otherwise)
in reasonably sufficient time prior to public release, and shall provide the
other Party with a written copy of the proposed public statement, in order to
solicit such other Party’s written approval. TPTX may disclose the
existence and terms of this Agreement to potential third party financial investors
in TPTX or a potential third party acquiror of all or substantially all of the
business TPTX (provided that any such third party agrees to maintain the
confidentiality of any such information provided to such third party by TPTX).

 

15

 

ARTICLE 8

GENERAL

 

8.1                               If
the performance of any part of this Agreement by either Party, or of any
obligation under this Agreement (other than payment), is prevented, restricted,
interfered with or delayed by reason of any casualties or contingencies beyond
the control of the Parties and their suppliers, including Acts of God,
government regulations, laws, orders or decrees, labor disputes, floods, fires,
civil commotion, embargoes, quotas, shortage of labor, power or materials or
any delays in transportation or detention by customs and health authorities
which are also beyond the control of the Parties and their suppliers, unless
conclusive evidence to the contrary is provided, the Party so affected shall,
upon giving written notice to the other Party, be excused from such performance
to the extent of such prevention, restriction, interference or delay, provided
that the affected Party shall use commercially reasonable efforts to avoid or
remove such causes of non-performance and shall continue performance with the
utmost dispatch whenever such causes are removed. When such circumstances
arise, the Parties shall discuss what, if any, modification of the terms of
this Agreement may be required in order to arrive at an equitable
solution.

 

8.2                               This
Agreement shall be governed by and interpreted in accordance with laws of
California, without regard to conflicts of laws principles.

 

8.3                               In
the event a dispute (“Dispute”) arises between the Parties arising out of or
relating to this Agreement, the Parties shall use all reasonable efforts to
resolve the Dispute through direct discussions of the respective Presidents of
TPTX and Eisai in the manner described in Exhibit B, and any dispute that
has not been amicably resolved by such settlement discussions shall be resolved
by binding Alternative Dispute Resolution (the “ADR”) in the manner described
in Exhibit B. Notwithstanding the foregoing, each Party acknowledges that
its breach of Article 7 of this Agreement may cause irreparable
damage and hereby agrees that the other Party shall be entitled to seek
injunctive relief under this Agreement with respect to such breach, as well as
such further relief as may be granted by a court of competent
jurisdiction, and any such Disputes may be brought in the state courts and
the Federal courts located in San Diego County, California and the Parties
hereby consent to the personal jurisdiction and venue of these courts.

 

8.4                               In
the event any portion of this Agreement shall be held illegal, void or
ineffective, the remaining portions hereof shall remain in full force and
effect. If any of the 

 

16

 

terms
or provisions of this Agreement are in conflict with any applicable statute or rule of
law, then such terms or provisions shall be deemed inoperative to the extent
that they may conflict therewith and the Parties shall consult with one
another in order to reach a new agreement that conforms with the applicable
statute or rule of law in the relevant jurisdiction.

 

8.5                               This
Agreement, entered into as of the Effective Date, constitutes the entire
agreement between the Parties relating to the subject matter hereof and
supersedes all previous writing and understandings (including the Alliance
Agreement between the Parties, dated March 31, 2001 and the Collaboration
Agreement) with respect to the subject matter hereof. Except as superseded by
this Agreement with respect to the subject matter hereof, the Alliance
Agreement between the Parties, dated March 31, 2001, and the Collaboration
Agreement remain in effect in accordance with their respective terms. No terms
or provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the Parties, except that the
Parties may amend this Agreement by mutually acceptable written
instruments specifically referred to and executed in the same manner as this
Agreement.

 

8.6                               The
Parties recognize and agree that nothing contained in this Agreement shall be
construed as granting any property rights, by license or otherwise, to any TPTX
Property, or to any invention or any patent, copyright, trademark, or other
intellectual property right that has issued or that may issue, based on
such TPTX Property.

 

8.7                               Any
notice required to be given or made under this Agreement by one of the Parties
hereto to the other shall be in writing, by personal delivery, registered U.S.
mail, or overnight courier, or facsimile, addressed to such other Party at its
address indicated below, or to such other address as the addressee shall have
last furnished in writing to the addressor and shall be effective upon the date
of receipt.

 

	
  To Eisai:

  	
  Eisai Co., Ltd.

  
	
   

  	
  6-10 Koishikawa
  4-chome, Bunkyo-ku

  
	
   

  	
  Tokyo 112-8088, Japan

  
	
   

  	
  Attention: Vice President, Corporate Business
  Development

  
	
   

  	
   

  
	
  To TPTX:

  	
  TorreyPines Therapeutics, Inc.

  
	
   

  	
  11085 North Torrey
  Pines Rd. Suite 300

  
	
   

  	
  La Jolla, CA 92037, U.S.A.

  
	
   

  	
  Attention: President
  and Chief Executive Officer

  

 

17

 

8.8                               Neither
this Agreement nor any interest hereunder shall be assignable by either Party
without the written consent of the other Party (which consent shall not be
unreasonably withheld); provided, however,
that either Party may assign this Agreement and its rights and obligations
hereunder without the other Party’s consent in connection with the transfer or
sale of all or substantially all of the business of such Party to which this
Agreement relates to a third party, whether by merger, sale of stock, sale of assets
or otherwise. In the event of such transaction, however, intellectual property
rights of the acquiring party to such transaction (if other than one of the
Parties to this Agreement) shall not be included in the intellectual property
rights which are subject to this Agreement. The rights and obligations of the
parties under this Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the parties. Any assignment not in
accordance with this Agreement shall be void.

 

8.9                               This
Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

18

 

IN WITNESS WHEREOF, the Parties through their authorized
representatives, have executed this Agreement as of the Effective Date.

 

 

	
  TorreyPines Therapeutics, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/Neil M. Kurtz

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
  Neil M. Kurtz, M.D.

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
  President and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Eisai Co., Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Kentaro Yoshimatsu 

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
  Kentaro Yoshimatsu 

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
  Discovery &
  Development Research

  	
   

  
							

 

19

 

Exhibit A

 

[***]

 

***   Confidential Treatment Requested

 

20

 

EXHIBIT B

 

ALTERNATIVE DISPUTE RESOLUTION

 

The
Parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement which relates to either
Party’s rights and/or obligations. To have such a dispute resolved by this ADR
provision, a Party first must send written notice of the dispute to the other
Party for attempted resolution by good faith negotiations between the President
of TPTX and the President of Eisai within thirty (30) days after such notice is
received (all references to “days” in this Exhibit B are to calendar
days).

 

Any
negotiations regarding a dispute shall be treated as settlement negotiations
for purposes of the Federal Rules of Evidence and any similar state rules of
evidence. Such negotiations shall not be admissible in any subsequent ADR
hearing.

 

If
the matter has not been resolved within thirty (30) days of the notice of
dispute, or if the Parties fail to meet within such thirty (30) days, either
Party may initiate an ADR proceeding as provided herein. The Parties shall
have the right to be represented by counsel in such a proceeding.

 

1.                                       To begin an
ADR proceeding, a Party shall provide written notice to the other Party of the
issues to be resolved by ADR. Within fourteen (14) days after its receipt
of such notice, the other Party may, by written notice to the Party initiating
the ADR, add additional issues to be resolved within the same ADR.

 

2.                                       Within
twenty-one (21) days following receipt of the original ADR notice, the Parties
shall select a mutually acceptable neutral (the “Neutral”) to preside in the
resolution of any disputes in this ADR proceeding. If the Parties are unable to
agree on a mutually acceptable Neutral within such period, the parties shall
request the President of the Center for Public Resources (“CPR”), 366 Madison
Avenue, New York, New York 10017, to select a Neutral pursuant to the following
procedures:

 

(a)                                  The CPR
shall submit to the Parties a list of not less than five (5) candidates
within fourteen (14) days after receipt of the request from the Parties, along
with a Curriculum Vitae for each candidate. No candidate shall be an employee,
director, or shareholder of either Party or any of their subsidiaries or
Affiliates.

 

(b)                                 Such list
shall include a statement of disclosure by each candidate of any circumstances
likely to affect his or her impartiality.

 

(c)                                  Each Party
shall number the candidates in order of preference (with the number one (1) signifying
the greatest preference) and shall deliver the list to the CPR within seven (7) days
following receipt of the list of candidates. If a Party believes a conflict of
interest exists regarding any of the candidates, that Party shall provide a
written explanation of the conflict to the CPR along with its list showing its
order of preference for the candidates. Any Party failing to return a list of
preferences on time shall be deemed to have no order of preference.

 

(d)                                 If the
Parties collectively have identified fewer than three (3) candidates
deemed to have conflicts, the CPR immediately shall designate as the Neutral
the candidate for whom the Parties collectively have indicated the greatest
preference. If a tie should result between two candidates, the CPR may designate
either candidate. If the Parties collectively have identified 

 

21

 

three
(3) or more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may either (i) immediately
designate as the Neutral the candidate for whom the Parties collectively have
indicated the greatest preference, or (ii) issue a new list of not less
than five (5) candidates, in which case the procedures set forth in
subsections 2(a) - 2(d) shall be repeated.

 

3.                                       No earlier
than twenty-eight (28) days or later than fifty-six (56) days after selection,
the Neutral shall hold a hearing to resolve each of the issues identified by
the Parties. The ADR proceeding shall take place in Honolulu, Hawaii, or at
such other location agreed upon by the Parties. The language of the ADR shall
be English.

 

4.                                       At least
seven (7) days prior to the hearing, each Party shall submit the following
to the other Party and the Neutral:

 

(a)                                  a copy of
all exhibits on which such Party intends to rely in any oral or written
presentation to the Neutral;

 

(b)                                 a list of
any witnesses such Party intends to call at the hearing, and a short summary of
the anticipated testimony of each witness;

 

(c)                                  a proposed
ruling on each issue to be resolved, together with a request for a specific
damage award or other remedy for each issue, provided, the proposed rulings and
remedies shall not contain any recitation of the facts or any legal arguments
and shall not exceed one (1) page per issue;

 

(d)                                 a brief in
support of such Party ‘s proposed rulings and remedies, provided that the brief
shall not exceed twenty (20) pages, provided, this page limitation shall
apply regardless of the number of issues raised in the ADR proceeding.

 

Except
as expressly set forth in subsections 4(a) - 4(d), no discovery shall be
required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.

 

5.                                       The hearing
shall be conducted on two (2) consecutive days and shall be governed by
the following rules:

 

(a)                                  Each Party
shall be entitled to five (5) hours of hearing time to present its case. The
Neutral shall determine whether each party has had the five (5) hours to
which it is entitled.

 

(b)                                 Each Party
shall be entitled, but not required, to make an opening statement, to present
regular and rebuttal testimony, documents or other evidence, to cross-examine
witnesses, and to make a closing argument. Cross-examination of witnesses shall
occur immediately after their direct testimony, and cross-examination time
shall be charged against the party conducting the cross-examination.

 

(c)                                  The Party
initiating the ADR shall begin the hearing and, if it chooses to make an
opening statement, shall address not only issues it raised but also any issues
raised by the responding Party. The responding Party, if it chooses to make an
opening statement, also shall address all issues raised in the ADR. Thereafter,
the presentation of regular and rebuttal 

 

22

 

testimony
and documents, other evidence, and closing arguments shall proceed in the same
sequence.

 

(d)                                 Except when
testifying, witnesses shall be excluded from the hearing until closing arguments.

 

(e)                                  Settlement
negotiations shall not be admissible under any circumstances. Affidavits
prepared for purposes of the ADR hearing also shall not be admissible. As to
all other matters, the Neutral shall have sole discretion regarding the
admissibility of any evidence.

 

6.                                       Within seven
(7) days following completion of the hearing, each Party may submit
to the other Party and the Neutral a post-hearing brief in support of its
proposed rulings and remedies, provided that such brief shall not contain or discuss
any new evidence and shall not exceed ten (10) pages. This page limitation
shall apply regardless of the number of issues raised in the ADR proceeding.

 

7.                                       The Neutral
shall rule on each disputed issue within fourteen (14) days following
completion of the hearing. Such ruling shall adopt in its entirety the proposed
ruling and remedy of one of the Parties on each disputed issue but may adopt
one Party ‘s proposed rulings and remedies on some issues and the other Party’s
proposed rulings and remedies on other issues. The Neutral shall not issue any
written opinion or otherwise explain the basis of the ruling.

 

8.                                       The Neutral
shall be paid a reasonable fee plus expenses. These fees and expenses, along
with the reasonable legal fees and expenses of the prevailing Party (including
all expert witness fees and expenses), the fees and expenses of a court
reporter, and any expenses for a hearing room, shall be paid as follows:

 

(a)                                  If the
Neutral rules in favor of one Party on all disputed issues in the ADR, the
losing Party shall pay 100% of such fees and expenses.

 

(b)                                 If the
Neutral rules in favor of one Party on some issues and the other Party on
other issues, the Neutral shall issue with the rulings a written determination
as to how such fees and expenses shall be allocated between the Parties. The
Neutral shall allocate fees and expenses in a way that bears a reasonable
relationship to the outcome of the ADR, with the Party prevailing on more
issues, or on issues of greater value or gravity, recovering a relatively
larger share of its legal fees and expenses.

 

9.                                       The rulings
of the Neutral and the allocation of fees and expenses shall be binding,
non-reviewable, and non-appealable, and may be entered as a final judgment
in any court having jurisdiction.

 

10.                                 Except as
provided in Article 7 of the Agreement to which this Exhibit is
attached or as required by law, the existence of the dispute, any settlement
negotiations, the ADR hearing, any submissions (including exhibits, testimony,
proposed rulings, and briefs), and the rulings shall be deemed confidential
information. The Neutral shall have the authority to impose sanctions for
unauthorized disclosure of confidential information.

 

23

 

EXHIBIT C

 

[***]

 

***   Confidential Treatment Requested

 

 

Appendix I.

 

[***]

 

Appendix
II.

 

[***]

 

Appendix
III.

 

[***]

 

***   Confidential Treatment Requested

 

 

EXHIBIT D

 

[***]

 

***   Confidential Treatment Requested

 

 

Exhibit E

 

[***]

 

***   Confidential Treatment RequestedExhibit 10.4

 

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 240.24b-2.

 

COLLABORATION AGREEMENT

 

This Collaboration Agreement (hereinafter
called the “Agreement”) made and entered into this 28th day of February 2005
(the “Effective Date”), by and between Neurogenetics, Inc., a corporation
organized and existing under the laws of Delaware (“Neurogenetics”), with
principal place of business at 11085 North Torrey Pines Road, La Jolla, CA
92037, the United States of America, and Eisai Co., Ltd., a corporation
organized and existing under the laws of Japan (“Eisai”), with its registered
office at 6-10 Koishikawa 4-chome, Bunkyo-ku, Tokyo 112-8088, Japan.

 

WITNESSETH
THAT:

 

WHEREAS,
Neurogenetics is engaged in a certain project for the discovery of Compounds (as
defined below) in the field of Alzheimer’s disease in humans; and

 

WHEREAS, Eisai
wishes to participate in such project in the manner and to the extent described
below, to obtain the first negotiation right with respect to any and all
intellectual property of Neurogenetics claiming, disclosing or covering any
Validated Compounds (as defined below), or the manufacture, use, sale, offer
for sale or import of any Validated Compounds, arising out of or resulting from
such project and to obtain a right of first refusal with respect to any Term
Sheet (as defined below), on the terms set forth in this Agreement.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged, the Parties hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

As used in
this Agreement, the following terms shall have the following respective
meanings, and except as explicitly noted, each definition shall apply
appropriately to the plural 

 

 

form of the word as well as to the singular:

 

1.1                               “Affiliate”
shall mean any corporation, firm, association, joint venture, partnership or
other entity which directly or indirectly Owns, is Owned by or is under common
Ownership with either Party. The terms “Owns”, “Owned” and “Ownership” for
purpose of determining status as an Affiliate shall mean ownership of at least
fifty percent (50%) of the voting equity or other ownership interest conferring
on the entity who holds it the power directly or indirectly to control or
direct the affairs of such corporation, firm, association, joint venture,
partnership, or other entity (or such lesser percentage in a particular
jurisdiction that provides such control).

 

1.2                               “Adverse
Ruling” shall have the meaning set forth in Section 6.2

 

1.3                               “ADR”
shall have the meaning set forth in Exhibit B hereto.

 

1.4                               “Compound”
shall be a chemical entity that lowers amyloid beta 42 peptide without significantly
affecting Notch processing. For clarification, the definition of “Compounds”
excludes Neurogenetics’ muscarinic receptor agonist compounds, including,
without limitation, NGX267 and NGX292.

 

1.5                               “Dispute”
shall have the meaning set forth in Section 8.3.

 

1.6                               “Effective
Date” shall mean the date first set forth above.

 

1.7                               “Eisai’s
Counsel” shall mean Eisai’s designated outside counsel, who is identified in Exhibit C.

 

1.8                               “Eisai’s
Proprietary Information” shall mean any and all scientific and technical
information and data, know-how and concepts which have been developed prior to
the Effective Date or hereafter developed during the term of this Agreement by
or on behalf of Eisai.

 

1.9                               “Extension
Term” shall have the meaning set forth in Section 6.1.

 

 

1.10                        “FTE”
shall mean the equivalent of work performed during a twelve (12)-month period
on a full time basis by a scientist or other professional (whether an employee
or independent contractor of Neurogenetics) possessing skills and experience
necessary for Neurogenetics to carry out the Project.

 

1.11                        “Indication
of Interest” shall have the meaning set forth in Section 3.2(c).

 

1.12                        “Negotiation
Period” shall have the meaning set forth in Section 3.2(d).

 

1.13                        “Neurogenetics’
Property” shall mean any and all intellectual property (including, without
limitation, all patents, patent applications, trade secrets and know-how)
claiming, disclosing or covering
any Validated Compound resulting from the Project and any and all Neurogenetics’
Proprietary Information with respect to any such Validated Compound.

 

1.14                        “Neurogenetics’
Proprietary Information” shall mean any and all scientific and technical
information and data, know-how and concepts which have been developed prior to
the Effective Date by or on behalf of Neurogenetics in the course of its
project for the discovery of Compounds in the field of treatment or prevention
of Alzheimer’s disease in humans, or are hereafter developed during the term of
this Agreement by or on behalf of Neurogenetics in the course of the Project.

 

1.15                        “Neutral”
shall have the meaning set forth in Exhibit B hereto.

 

1.16                        “Party”
and “Parties” shall mean Eisai or
Neurogenetics or both, as applicable.

 

1.17                        “Project”
shall mean the project for the discovery of Compounds in the field of treatment
or prevention of Alzheimer’s disease in humans, which Neurogenetics is
performing and will carry out during the Term, as specified in the Project
Plan.

 

1.18                        “Project
Plan” shall mean the plan attached as Exhibit A hereto and
incorporated herein.

 

 

1.19                        “Recipient”
shall have the meaning set forth in Section 7.1.

 

1.20                        “Response
Period” shall have the meaning set forth in Section 3.2(f).

 

1.21                        “Term”
shall have the meaning set forth in Section 6.1.

 

1.22                        “Term
Sheet” shall have the meaning set forth in Section 3.2(f).

 

1.23                        “Validated
Compound” shall mean (a) any Compound discovered or identified by or on behalf of Neurogenetics prior
to the Effective Date or in the course of the Project, which is designated by Neurogenetics
as validated in accordance with the Validation Criteria in effect at the time
the applicable quarterly report detailing such Compound is submitted to Eisai’s
Counsel where such designation is confirmed by Eisai pursuant to Section 3.2(a),
and (b) hydrates, solvates, salts,
stereoisomers, prodrugs and polymorphs of such Compound.

 

1.24                        “Validation
Criteria” shall mean the biochemical, toxicological and/or pharmacological criteria
for validating a Compound identified in the course of the Project that are
attached hereto as Exhibit D
and incorporated by reference herein, as they may be amended upon written
agreement of the Parties.

 

ARTICLE 2

 

COLLABORATION AND GOVERNANCE

 

2.1                               Neurogenetics
shall use all reasonable efforts to conduct the Project during the Term in
accordance with the Project Plan. However, it is agreed and acknowledged that, so
long as it conducts the Project in accordance with the Project Plan, Neurogenetics
shall be solely responsible for conducting the Project, and shall, in its sole
discretion, select the research tools and methods that are used in the course
of the Project. Eisai shall not control the Project. Neurogenetics shall devote
such personnel and other resources to the Project during each year of 

 

 

the Term as is appropriate to perform or support the work to be
conducted under the Project in accordance with the Project Plan.

 

2.2                               Neurogenetics
acknowledges that Eisai has developed and possesses its own proprietary
chemical entities resulting from its own project whose purpose is to discover
lead compounds that selectively lower amyloid beta peptide without significantly
affecting Notch processing and that Eisai will continue to develop its own
chemical entities in an effort to obtain pharmaceutical compounds which will be
suitable for clinical development in the field of Alzheimer’s disease. In this
respect, the Parties agree to establish mutually acceptable procedures to prevent
the disclosure of Eisai’s Proprietary Information to Neurogenetics and, except
as provided herein, to prevent the disclosure of Neurogenetics’ Proprietary
Information to Eisai.

 

ARTICLE 3

 

FIRST NEGOTIATION RIGHT AND
RIGHT OF FIRST REFUSAL

 

3.1                               Neurogenetics
hereby grants to Eisai, during the Term and the Extension Term, as applicable,
the exclusive right to be the first to negotiate terms and conditions to
license, collaborate, form alliances, joint ventures and/or partnerships
or other similar business arrangements with respect to a Validated Compound and
Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale,
offer for sale or import in accordance with Section 3.2. Neurogenetics
also grants to Eisai a right of first refusal on any Term Sheet (as defined
below) in accordance with Section 3.2.

 

3.2                               The
Parties agree and acknowledge that Eisai’s exclusive right, set forth in Section 3.1,
to be the first to negotiate and Eisai’s right of first refusal on any Term
Sheet shall be realized and implemented through the following procedures:

 

 

(a)                                  Neurogenetics shall
submit to Eisai and Eisai’s Counsel a report promptly following the end of each
calendar quarter during the Term, which provides true and accurate information
regarding the following:  (i) a statement whether, as
to each Compound referenced in the report, the Compound is believed
by Neurogenetics to satisfy Validation Criteria, together with a detailed
explanation of the performance and characteristics of the Compound as
compared to each of the Validation Criteria; and (ii) a summary of
research activities under the Project during the applicable period, provided
that Neurogenetics shall not disclose to Eisai, but will disclose to Eisai’s
Counsel, the identity and structure of each Compound referenced in the
report. Upon receipt of the report, Eisai may ask questions regarding such
Compounds and other matters referenced in the report directly or through Eisai’s
Counsel to Neurogenetics, who shall respond in good faith to such questions
promptly. In the event that Eisai does not designate as a Validated
Compound a Compound which is referenced in the report, which Neurogenetics
states it believes satisfies the Validation Criteria, and for which information
relating to the Validation Criteria is provided in that report, within [***])
days after the date of such report or [***] days after receipt of Neurogenetics’
good faith responses to such questions asked by Eisai, then such Compound will
be deemed not to be a Validated Compound. If Eisai reasonably believes that additional experiments are required before
it can determine whether a Compound is a Validated Compound, Eisai informs Neurogenetics of such additional
experiments and then Neurogenetics shall perform the experiments in a
timely manner. The results of any such additional experiments on such Compound will be described in a
report provided in accordance with this Section 3.2(a). The contents of
reports provided to Eisai and Eisai’s Counsel hereunder shall be treated by them
as confidential information of Neurogenetics, within the meaning of and subject
to the terms and obligations of Article 7 hereof and the agreement between
Eisai’s Counsel and 

 

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Neurogenetics, which is attached hereto as Exhibit E, respectively.
Except as provided in Section 3.2(e), Neurogenetics will not disclose to
third parties any information described in the quarterly report or summaries
without prior written consent of Eisai during the Term, except that (i) Neurogenetics
may disclose information described in the quarterly report or summaries to
potential third party financial investors in Neurogenetics (provided that Neurogenetics shall not disclose chemical
structure of the Compounds to any such third party financial investor and any
such third party financial investor agrees
to maintain the confidentiality of any such information of Neurogenetics
provided to such third party financial
investor by Neurogenetics), and (ii) Neurogenetics
may issue press releases and make scientific presentations and
publications in the ordinary course of its business that generally describe the
status of its research and development activities, provided that such press
releases or scientific presentations do not disclose any Validated Compounds to
which Eisai continues to have rights under this Section 3.2 or any Compounds
discovered or identified in the course of the Project that Eisai has not completed yet their review to determine whether or not they are Validated Compounds.
It is agreed and acknowledged that the particular compounds disclosed by
Neurogenetics to Eisai’s Counsel on February 14, 2005 shall be governed by
this Agreement.

 

(b)                                 Neurogenetics shall
allow Eisai’s Counsel or their agents to visit research facilities of
Neurogenetics during the Term and the Extension Term, as applicable, with
reasonable prior notice and at reasonable times and for a reasonable length of
stay in order to enable Eisai’s Counsel or
their agent to understand the status of the Project. Eisai’s Counsel or their
agents shall be subject to Neurogenetics’ standard policies regarding visitors
to its facilities and shall be obligated to hold any confidential information
of Neurogenetics in confidence in accordance with the letter between Eisai’s
Counsel and Neurogenetics, and neither Eisai nor 

 

 

Eisai’s Counsel or their agents shall use any such confidential information
of Neurogenetics for any purpose other than as contemplated by this Agreement
in accordance with the provisions of Article 7. In addition, Neurogenetics
and Eisai or Eisai’s Counsel, as applicable, will have regular communication by
video, telephone and e-mail as reasonably necessary during the Term regarding
the status of the Project.

 

(c)                                  During the Term and
the Extension Term, as applicable, Eisai may express its interest in
negotiating the terms and conditions of a license, collaboration, alliance,
joint venture, partnership or other similar business arrangement with respect
to one (1) or more specific Validated Compounds within the Neurogenetics’
Property by providing written notice to Neurogenetics specifying the applicable
Validated Compounds of interest (an “Indication of Interest”). Eisai must
provide an Indication of Interest with respect to a Validated Compound within
[***] days after the date that Eisai designates such Validated Compound. If
Eisai does not provide an Indication of Interest with respect to a Validated Compound
within such period, then the right of first negotiation with respect to such
Validated Compound shall expire at the end of such period, and Eisai shall have
no further rights with respect to such Validated Compound.

 

(d)                                 For a period of [***]
days following the date of an Indication of Interest (the “Negotiation Period”),
the Parties shall negotiate in good faith regarding a proposal for a license,
collaboration, alliance, joint venture, partnership or other similar business
arrangement with respect to the Validated Compound specified in such Indication
of Interest and the Neurogenetics’ Property claiming, disclosing or covering
such Validated Compound or its manufacture, use, sale, offer for sale or import.
The Negotiation Period may be extended upon written mutual agreement of
the Parties for an additional [***] days, and such additional [***] 

 

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day period shall be included in the defined term “Negotiation Period.”  The terms and subject matter of such
negotiations shall be treated by the Parties as confidential information of
both Parties, within the meaning of, and subject to the terms and obligations
of, Article 7 of this Agreement. During the Negotiation Period, Neurogenetics
will provide to Eisai current information, and will respond to Eisai’s
reasonable inquiries, regarding any Validated Compound as to which Eisai has
provided an Indication of Interest.

 

(e)                                  In the event that, by
the end of such Negotiation Period, the Parties reach an agreement with respect
to the terms and conditions of a license, collaboration, alliance, joint
venture, partnership, or other similar business arrangement with respect to the
Validated Compound specified in the applicable Indication of Interest and the
Neurogenetics’ Property claiming, disclosing or covering such Validated
Compound or its manufacture, use, sale, offer for sale or import, then the
Parties will enter into a definitive agreement reflecting the terms and
conditions mutually agreed to by the Parties. In the event that, by the end of
such Negotiation Period, the Parties do not reach an agreement with respect to
the terms and conditions of a license, collaboration, alliance, joint venture,
partnership or other business arrangement with respect to the Validated
Compound specified in such Indication of Interest and the Neurogenetics’
Property claiming, disclosing or covering such Validated Compound or its
manufacture, use, sale, offer for sale or import, then, except as set forth in Section 3.2(f) with
respect to the right of first refusal, Eisai shall have no rights with respect
to the Validated Compound specified in such Indication of Interest or any
Neurogenetics’ Property claiming, disclosing or covering such Validated
Compound or its manufacture, use, sale, offer for sale or import, and
Neurogenetics shall be free to discuss and, subject to compliance with Section 3.2(f),
as applicable, enter into with a third party the terms and conditions of a
license, collaboration, 

 

 

alliance, joint venture, partnership or other similar business
arrangement with respect to the Validated Compound specified in such Indication
of Interest and the Neurogenetics’ Property claiming, disclosing or covering
such Validated Compound or its manufacture, use, sale, offer for sale or
import, and to disclose such Neurogenetics’ Property, including, without
limitation, information described in the relevant quarterly report and
summaries as necessary to facilitate such actions.

 

(f)                                    For a period of
[***] months following the end of such Negotiation Period, Neurogenetics may not
enter into an agreement with respect to the terms and conditions of a license,
collaboration, alliance, joint venture, partnership, transfer or other similar business arrangement with respect to the
Validated Compound that was the subject of an Indication of Interest and the
Neurogenetics’ Property claiming, disclosing or covering such Validated
Compound or its manufacture, use, sale, offer for sale or import (for
clarification, excluding any Proposed Transaction, which shall be addressed in Section 3.2(i)) unless (i) Neurogenetics
first provides to Eisai the Term Sheet (as defined below) for such agreement,
and (ii) Eisai does not make a proposal to Neurogenetics in writing that
is equivalent or superior to the Term Sheet within the Response Period (as
defined below). As used herein, “Term Sheet” means the term sheet (or if there
is no term sheet, a written summary of the terms) agreed to by Neurogenetics
and a third party in connection with negotiations with such third party, which
describes the material terms and conditions of a definitive agreement for a
transaction described above regarding specific Neurogenetics’ Property relating
to a Validated Compound that was previously identified in such Indication of
Interest. As used herein, “Response Period” means the [***] day period
immediately following the date that Neurogenetics first provided the Term Sheet
to Eisai; provided that, if such Term Sheet is amended or modified in any
material respect 

 

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prior to the end of such [***] day period, such Response Period shall
be extended, if necessary, so that such Response Period ends no earlier than
[***] business days after the date that Neurogenetics provided the Term Sheet
as so amended or modified to Eisai. If the Term Sheet is amended or modified in
any material respect prior to the end of the Response Period, Neurogenetics
shall provide to Eisai the Term Sheet as amended or modified, and references to
such Term Sheet in this Section 3.2(f) shall thereafter refer to the
Term Sheet as amended or modified. During the Response Period, Neurogenetics will provide to Eisai current
information, and will respond to Eisai’s inquiries, regarding any Validated
Compound as to which is subject of the Term Sheet. For avoidance of
doubt, in the event that Eisai makes a proposal to Neurogenetics in writing
that is equivalent or more favorable to Neurogenetics than the Term Sheet
within the Response Period, Eisai and Neurogenetics shall enter into good faith
negotiations for a definitive agreement with respect to that proposal. In that
event, Neurogenetics shall not enter into discussions about a definitive agreement with the third party
regarding a transaction described in this Section 3.2(f) for a period
of [***] days after such proposal is provided by Eisai to Neurogenetics. If
Neurogenetics consummates such a transaction with a third party in compliance
with this Section 3.2(f), then Eisai shall have no rights with respect to
the Validated Compound and the Neurogenetics’ Property relating to the
Validated Compound specified in such Indication of Interest.

 

(g)                                 At the end of the Term
or the Extension Term, as applicable, Eisai shall have no rights with respect
to any Neurogenetics’ Property, except (i) rights granted under any
license, collaboration, alliance, joint venture, partnership or other similar
business arrangement with respect to the Validated Compound specified in an
Indication of Interest and the Neurogenetics’ Property claiming, disclosing or
covering such Validated Compound or its 

 

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manufacture, use, sale, offer for sale or import entered into by the
Parties in accordance with the procedures described in this Section 3.2,
and (ii) solely during the applicable Negotiation Period, the right of
first negotiation granted under this Section 3.2, and, if applicable,
solely for the [***] month period following the end of such Negotiation Period,
the right of first refusal granted under this Section 3.2, with respect to
the Validated Compound specified in any Indication of Interest dated prior to
the end of the Term or the Extension Term, as applicable, and the Neurogenetics’
Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale,
offer for sale or import.

 

(h)                                 For clarification, the
Parties acknowledge and agree that the right of first negotiation in this Section 3.2
shall apply only to the Validated Compound specified in an Indication of
Interest and the Neurogenetics’ Property claiming, disclosing or covering such
Validated Compound or its manufacture, use, , sale, offer for sale or import,
and the right of first refusal granted in this Section 3.2 shall apply
only to a transaction described in Section 3.2(f) with respect to a
Validated Compound specified in an Indication of Interest and the Neurogenetics’
Property claiming, disclosing or covering such Validated Compound or its
manufacture, use, sale, offer for sale or import, and shall not otherwise apply
to any other intellectual property of Neurogenetics.

 

(i)                                     If, during the
Term or the Extension Term, as applicable, the Board of Directors of
Neurogenetics determines to consider the sale of all of its business, or any
portion of its business that includes the Neurogenetics Property, through a
merger, sale of assets or similar transaction (a “Proposed Transaction”), then
before Neurogenetics agrees to the principal terms of a Proposed Transaction
with any third party, Neurogenetics will first advise Eisai in writing that
Neurogenetics is considering a Proposed Transaction. If Eisai does not provide
written 

 

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notice to Neurogenetics within [***] days after the date of the written
notice provided by Neurogenetics to Eisai regarding a Proposed Transaction that
Eisai is interested in discussing a Proposed Transaction between the Parties,
then Neurogenetics may proceed with a Proposed Transaction with any third
party without further obligation to Eisai under this Section 3.2(i). If
Eisai provides written notice to Neurogenetics within [***] days after the date
of the written notice provided by Neurogenetics to Eisai regarding a Proposed
Transaction that Eisai is interested in discussing a Proposed Transaction
between the Parties, then, for a period of [***] days following the date of
such written notice from Eisai (the “Discussion Period”), the Parties shall
negotiate in good faith regarding a Proposed Transaction between Neurogenetics
and Eisai. The Discussion Period may be extended upon written mutual
agreement of the Parties for an additional[***] days, and such additional [***]
day period shall be included in the defined term “Discussion Period.”  The terms and subject matter of such negotiations
shall be treated by the Parties as confidential information of both Parties,
within the meaning of, and subject to the terms and obligations of, Article 7
of this Agreement. In the event that, by the end of such Discussion Period, the
Parties reach an agreement with respect to the terms and conditions of a
Proposed Transaction between the Parties, then the Parties will enter into a
definitive agreement reflecting the terms and conditions mutually agreed to by
the Parties. In the event that, by the end of such Discussion Period, the
Parties do not reach an agreement with respect to the terms and conditions of a
Proposed Transaction between the Parties, then Neurogenetics may proceed
with a Proposed Transaction with any third party without further obligation to
Eisai under this Section 3.2(i), and Neurogenetics may make
disclosures to such third party of information regarding Neurogenetics,
including, without limitation, information described in reports provided
pursuant to Section 3.2(a) (provided that Neurogenetics shall not disclose chemical
structure of 

 

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the Compounds to any such third party and any
such third party agrees to maintain the confidentiality of any such information
of Neurogenetics provided to such third party by Neurogenetics). In the event
that Neurogenetics completes a Proposed Transaction with a third party, the
rights granted by Neurogenetics to Eisai under this Agreement shall remain in
effect, and such transaction shall not limit or restrict the rights granted to
Eisai under this Agreement. This Section 3.2(i) shall automatically
terminate upon the initial public offering of Common Stock of Neurogenetics.

 

ARTICLE 4

 

PAYMENT

 

4.1                               In
consideration for (i) the exclusive right of first negotiation and (ii) the
right of first refusal set forth in Section 3.1, Eisai shall pay
Neurogenetics ten million U.S. dollars (US$10,000,000) within thirty (30) days
after the Effective Date. It is agreed and acknowledged that, if the Parties
reach an agreement with respect to the terms and conditions of a license,
collaboration, alliance, joint venture, partnership or other similar business
arrangement with respect to a Validated Compound specified in the applicable
Indication of Interest in accordance with Section 3.2(e) within one (1) year
from the Effective Date, Neurogenetics shall credit up to the following amount towards
any future upfront payment to be made by Eisai to Neurogenetics under that agreement:  (a) if Neurogenetics has spent less than
[***] U.S. dollars ($[***]) on conducting the Project between the Effective
Date and the time the Parties enter into that agreement, the amount of such
credit shall be [***] U.S. dollars ($[***]); and (b) if Neurogenetics has
spent more than [***] U.S. dollars ($[***]) on conducting the Project between
the Effective Date and the time the Parties enter into that agreement, the
amount of such credit shall be equal to (i) [***] U.S. dollars ($[***]),
less (ii) the amount by which 

 

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Neurogenetics’ total expenditures on the Project between the Effective
Date and the time the Parties enter into that agreement (as documented by
Neurogenetics) exceed [***] U.S. dollars ($[***]).

 

4.2                               All
payments made hereunder shall be paid by wire transfer to an account at
Neurogenetics’ designated bank in California, and shall be paid in U.S.
dollars.

 

4.3                               The
payments set forth in this Article 4 shall be made without reduction for
any taxes, charges, remittance fees, withholding taxes, provided that
Neurogenetics shall provide Eisai with documentation necessary for Eisai to file
an application with the Japanese Tax Office to avoid or reduce withholding or
other applicable taxes.

 

4.4                               Neurogenetics
shall provide Eisai a quarterly report within thirty (30) days of the end of
each quarter, which describes Neurogenetics’ research expenses on the Project
during the applicable quarter so that Eisai can confirm that Neurogenetics is
conducting the Project in accordance with the Project Plan. In order to confirm
the accuracy of the quarterly report, Eisai’s designated outside accountants may visit
Neurogenetics to confirm the information included in the quarterly report during
Neurogenetics’ business hours with one (1)month prior notice; provided that such
visits may not occur more frequently than once in any six (6) month
period. Neurogenetics shall cooperate in good faith with Eisai’s designated
outside accountants during their stay in Neurogenetics. All information
provided to Eisai or its designated outside accountants pursuant to this Section 4.4
shall be deemed confidential information of Neurogenetics and shall be subject
to the provisions of Article 7 of this Agreement.

 

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ARTICLE 5

 

WARRANTIES

 

5.1                               Each
Party warrants that the performance by such Party of any of the terms and
conditions of this Agreement on its part to be performed does not and will
not constitute a breach of any other material agreement or understanding,
written or oral, to which it is a party
and , to the best of such Party’s
knowledge, will not otherwise violate the rights of any third party.

 

5.2                               Neurogenetics
warrants that there are no adverse proceedings, claims or actions pending, or
to the best of Neurogenetics’ knowledge, threatened, relating to any
Neurogenetics’ Proprietary Information as of the Effective Date, and
Neurogenetics shall, to the best of its knowledge, have the full right and
legal capacity to conduct the Project and to disclose and deliver Neurogenetics’
Proprietary Information pursuant to the terms of this Agreement without
violating the rights of third parties. Neurogenetics further warrants that it
has the full right and legal capacity to execute this Agreement, without
violating the rights of third parties.

 

5.3                               Neurogenetics
warrants that Neurogenetics will observe all applicable regulations, rules,
codes, legal and regulatory guidance and laws in performing the Project.

 

5.4                               Neurogenetics
warrants that each report required to be delivered pursuant to Section 3.2(a) and
any other information and data provided by Neurogenetics under this Agreement
shall be truthful and accurate, and prepared by Neurogenetics in good faith.

 

5.5                               Except
as expressly set forth herein, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY COMPOUND, DATA,
INFORMATION, INTELLECTUAL PROPERTY OR OTHERWISE, INCLUDING WITHOUT LIMITATION
THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT 

 

 

OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A
COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO.
Without limiting the generality of the foregoing, each Party expressly does not
warrant the success of the Project.

 

ARTICLE 6

 

TERM AND TERMINATION

 

6.1                               This
Agreement shall become effective on the Effective Date and, unless earlier
terminated or extended hereunder, shall continue in effect until the second
anniversary of the Effective Date (the “Term”) and, solely for purposes of Section 3.2
with respect to Neurogenetics’ quarterly report submitted to Eisai following
the last quarter of the Term and activities to be completed pursuant to Section 3.2
following submission of such report, shall continue after the Term until the
date upon which all such activities have been completed in accordance with Section 3.2
(the “Extension Term”). Eisai shall have the one-time right, in its sole
discretion, to extend the original Term, which ends on the second anniversary
of the Effective Date (the “Original Term”), for a period of twelve (12) months
immediately following the end of the Original Term (the “Additional Period”).
Eisai may exercise such right to extend the Term by the Additional Period
by providing Neurogenetics written notice of such extension on or prior to the
date that is [***] ([***]) days after Neurogenetics submits the quarterly
report pursuant to Section 3.2(a) for the quarter immediately
preceding the last quarter of the Original Term; provided that, if a Compound
presented in the quarterly report for the last quarter of the Original Term is
designated a Validated Compound by Eisai pursuant to Section 3.2(a), Eisai
shall have [***] ([***]) days from the date that Eisai make such designation to
exercise its right to extend the Term by the Additional Period pursuant to this
Section 6.1. If Eisai extends the 

 

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Term pursuant to this Section 6.1, Eisai shall pay Neurogenetics
[***] U.S. dollars (US$[***]) within [***] days from
the first day of the Additional Period. Such payment shall be made in
accordance with the terms of Sections 4.2 and 4.3. If Eisai extends the
Term pursuant to this Section 6.1, the term “Term” shall automatically
include the Additional Period.

 

6.2                               It
is the Parties’ express intent that consideration shall first and foremost be
given to remedying any breach of this Agreement through the payment of monetary
damages or such other legal or equitable remedies as shall be appropriate under
the circumstances and that there shall only be the limited right to terminate
this Agreement that is expressly provided in this Section 6.2. In the
event that the Neutral, in accordance with the procedures set forth in Section 8.3
and Exhibit B hereto and incorporated herein, has rendered a ruling that a
Party has materially breached this Agreement, which ruling specifies the
remedies, which shall not include termination, imposed on such breaching Party
for such breach (the “Adverse Ruling”), and the breaching Party has failed to
comply with the terms of the Adverse Ruling within the time period specified
therein for compliance, or if such compliance cannot be fully achieved by such
date, the breaching Party has failed to commence compliance and/or failed to
use diligent efforts to achieve full compliance as soon thereafter as is
reasonably possible, then the non-breaching Party shall have the right to
terminate this Agreement by providing written notice thereof to the breaching
Party.

 

6.3                               The
rights and obligations arising from Sections 3.2(g) and 6.3, and Articles 5, 7 and 8 (including Exhibit B)
and, solely for the period of time and for the purposes described in such
sections, Sections 3.2(d), (e) and (f), shall survive expiration or
termination of this Agreement. Expiration or termination of this Agreement
shall not relieve the Parties of any obligation accruing prior to such
expiration or termination.

 

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ARTICLE 7

 

EXCHANGE OF INFORMATION AND
CONFIDENTIALITY

 

7.1                               During
the Term and for [***] years thereafter (and notwithstanding any termination or
expiration of this Agreement), Neurogenetics and Eisai shall not use or reveal
or disclose to third parties any confidential information received from the
other Party or otherwise developed by the other Party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the other Party. Notwithstanding the above, the Party to whom
confidential information was disclosed (the “Recipient”) shall not be in
violation of this Agreement with regard to disclosure of information that
Recipient can evidence by competent written proof: (a) is or becomes part of
the public domain subsequent to the time it was communicated to the Recipient
by the other Party through no fault of the Recipient, (b) is already in
Recipient’s possession free of any obligation of confidence at the time it was
communicated to the Recipient, (c) is disclosed to the Recipient by a
third party having the right to do so, which third party did not obtain the
same, directly or indirectly, from the other Party, or (d) is in response
to a valid order by a court or other governmental body (but solely to the
extent of and pursuant to such order), provided that the Recipient provides the
other Party with prior written notice of any disclosure in response to a court
or other governmental order so as to permit the other Party to seek
confidential treatment of such information. The Parties shall take reasonable
measures to assure that no unauthorized use or disclosure is made by others to
whom access to such information is granted.

 

7.2                               Nothing
herein shall be construed as preventing either Party from disclosing any
information received from the other Party to its employees, consultants, agents
and Affiliates, 

 

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provided that such employees, consultants, agents and Affiliates have
undertaken a similar obligation of confidentiality with respect to the
confidential information.

 

7.3                               No
public announcement or other disclosure to any third party concerning the
existence of or terms of this Agreement shall be made, either directly or
indirectly, by any Party to this Agreement, except as required by applicable
law, rule or regulation, without first obtaining approval of the other
Party and agreement upon the nature and text of such announcement or
disclosure. The Party desiring to make any public announcement or other
disclosure shall inform the other Party of the proposed announcement or
disclosure (pursuant to legal requirement, for recording purposes or otherwise)
a reasonable time prior to public release, and shall provide the other Party
with a written copy of the proposed public statement, in order to solicit such
Party’s written approval. Neurogenetics may disclose the existence and
terms of this Agreement to potential third party financial investors in
Neurogenetics or a potential third party acquiror of all or substantially all
of the business Neurogenetics (provided that any such third party agrees to
maintain the confidentiality of any such information provided to such third
party by Neurogenetics).

 

ARTICLE 8

 

GENERAL

 

8.1                               If
the performance of any part of this Agreement by either Party, or of any
obligation under this Agreement (other than payment), is prevented, restricted,
interfered with or delayed by reason of any event beyond the control of that
Party or its suppliers, including Acts of God, government regulations, laws,
orders or decrees, labor disputes, floods, fires, civil commotion, embargoes,
quotas, shortage of labor, power or materials or any delays in transportation
or detention by customs and health authorities which are also beyond the
control 

 

 

of the Party or its suppliers, the Party so affected shall, upon giving
written notice to the other Party, be excused from such performance to the
extent of such prevention, restriction, interference or delay, provided that
the affected Party shall use commercially reasonable efforts to avoid or remove
such causes of non-performance and shall continue performance with the utmost
dispatch whenever such cause is removed. When such circumstances arise, the
Parties shall discuss what, if any, modification of the terms of this Agreement
may be required in order to arrive at an equitable solution.

 

8.2                               This
Agreement shall be governed by and interpreted in accordance with the laws of
California, without regard to conflicts of laws principles.

 

8.3                               In
the event a dispute (“Dispute”) arises between the Parties arising out of or
relating to this Agreement, such Dispute shall be resolved in the manner
described in Exhibit B. Notwithstanding the foregoing, each Party
acknowledges that its breach of Section 3.2(d) or 3.2(f) or Article 7
of this Agreement (or the breach by Eisai’s accountants or Eisai’s Counsel of
confidentiality obligations under Section 4.4 or the letter agreement
attached hereto as Exhibit #, as applicable) may cause irreparable
damage and hereby agrees that the other Party shall be entitled to seek
injunctive relief under this Agreement with respect to such breach, as well as
such further relief as may be granted by a court of competent
jurisdiction, and any such Disputes may be brought in the state courts and
the Federal courts located in San Diego County, California and the Parties
hereby consent to the personal jurisdiction and venue of these courts.

 

8.3                               In
the event any portion of this Agreement shall be held illegal, void or
ineffective, the remaining portions hereof shall remain in full force and
effect. If any of the terms or provisions of this Agreement are in conflict
with any applicable statute or rule of law, then such terms or provisions
shall be deemed inoperative to the extent that they may conflict 

 

 

therewith and the Parties shall consult with one another in order to
reach a new agreement that conforms with the applicable statute or rule of
law in the relevant jurisdiction.

 

8.4                               This
Agreement, entered into as of the Effective Date, constitutes the entire
agreement between the Parties relating to the subject matter hereof and
supersedes all previous writings and understandings with respect to the subject
matter hereof. For clarification, the Collaboration Agreement between the
Parties, dated October 1, 2002, remains in effect in accordance with its
terms. The terms or provisions of this Agreement shall not be varied or
modified by any prior or subsequent statement, conduct or act of either of the
Parties, except that the Parties may amend this Agreement by mutually
acceptable written instruments that specifically refer to this Agreement and
are executed in the same manner as this Agreement.

 

8.5                               The
Parties recognize and agree that, except as expressly stated in this Agreement,
nothing contained in this Agreement shall be construed as granting any property
rights, by license or otherwise, to any Neurogenetics’ Property, or to any
invention or any patent, copyright, trademark, or other intellectual property
right that has issued or that may issue, based on such Neurogenetics’
Property.

 

8.7                               Any
notice required to be given or made under this Agreement by one of the Parties
hereto to the other shall be in writing, by personal delivery, registered U.S.
mail or its Japanese equivalent, or overnight courier, or facsimile, addressed
to such other Party at its address indicated below, or to such other address as
the addressee shall have last furnished in writing to the addressor and shall
be effective upon the date of receipt.

 

	
  TO EISAI:

  	
  Eisai Co., Ltd.

  
	
   

  	
  6-10 Koishikawa 4-chome, Bunkyo-ku

  
	
   

  	
  Tokyo 112-8088, Japan

  
	
   

  	
   

  
	
   

  	
  Attention: Corporate Officer, Corporate
  Business Development

  

 

 

	
  TO NEUROGENETICS:

  	
  Neurogenetics, Inc.

  
	
   

  	
  11085 North Torrey Pines Rd. Suite 300

  
	
   

  	
  La Jolla, CA 92037, U.S.A.

  
	
   

  	
   

  
	
   

  	
  Attention: President and Chief Executive
  Officer

  

 

8.8                               Neither
this Agreement nor any interest hereunder shall be assignable by either Party
without the written consent of the other Party (which consent shall not be
unreasonably withheld); provided, however,
that either Party may assign this Agreement and its rights and obligations
hereunder without the other Party’s consent in connection with the transfer or
sale of all or substantially all of the business of such Party to which this
Agreement relates to a third party, whether by merger, sale of stock, sale of
assets or otherwise. In the event of such transaction, however, intellectual
property rights of the acquiring party to such transaction (if other than one
of the Parties to this Agreement) shall not be included in the intellectual
property rights which are subject to this Agreement. The rights and obligations
of the parties under this Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties. Any assignment
not in accordance with this Agreement shall be void.

 

8.9                               This
Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

IN WITNESS WHEREOF,
the Parties through their authorized representatives, have executed this
Agreement as of the Effective Date.

 

	
   

  	
  NEUROGENETICS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/Neil Kurtz

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Neil M. Kurtz, M.D

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President and CEO

  	
   

  
									

 

 

	
   

  	
  EISAI CO., Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s. Kentaro Yoshimatsu

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Kentaro Yoshimatsu

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Senior Vice President

  	
   

  
	
   

  	
  Discovery &
  Development Research

  	
   

  
								

 

 

EXHIBIT A

 

PROJECT
PLAN

 

Neurogenetics Program to Find Compounds
that Selectively Lower A42

 

[***]

 

EXHIBIT B

 

ALTERNATIVE DISPUTE
RESOLUTION

 

The Parties recognize that a bona fide
dispute as to certain matters may arise from time to time during the term
of this Agreement which relates to either Party’s rights and/or obligations. To
have such a dispute resolved by this Alternative Dispute Resolution (the “ADR”)
provision, a Party first must send written notice of the dispute to the other
Party for attempted resolution by good faith negotiations between the President
of Neurogenetics and the President of Eisai within thirty (30) days after such
notice is received (all references to “days” in this Exhibit B are to
calendar days).

 

Any negotiations regarding a dispute shall be
treated as settlement negotiations for purposes of the Federal Rules of
Evidence and any similar state rules of evidence. Such negotiations shall
not be admissible in any subsequent judicial or ADR proceeding.

 

If the matter has not been resolved within
thirty (30) days of the notice of dispute, or if the Parties fail to meet
within such thirty (30) days, either Party may initiate an ADR proceeding
as provided herein. The Parties shall have the right to be represented by
counsel in such a proceeding.

 

1.                                       To begin an ADR
proceeding, a Party shall provide written notice to the other Part of the
issues to be resolved by ADR. Within fourteen (14) days after its receipt
of such 

 

***   Confidential
Treatment Requested

 

 

notice, the other Party may, by written notice to the Party initiating
the ADR, add additional issues to be resolved within the same ADR.

 

2.                                       Within
twenty-one (21) days following receipt of the original ADR notice, the Parties
shall select a mutually acceptable neutral (the “Neutral”) to preside in the
resolution of any disputes in this ADR proceeding. If the Parties are unable to
agree on a mutually acceptable Neutral within such period, the parties shall
request the President of the Center for Public Resources (“CPR”), 366 Madison
Avenue, New York, New York 10017, to select a Neutral pursuant to the following
procedures:

 

(a)                                  The CPR shall submit
to the Parties a list of not less than five (5) candidates within fourteen
(14) days after receipt of the request from the Parties, along with a
Curriculum Vitae for each candidate. No candidate shall be an employee,
director, or shareholder of either Party or any of their subsidiaries or
Affiliates.

 

(b)                                 Such list shall
include a statement of disclosure by each candidate of any circumstances likely
to affect his or her impartiality.

 

(c)                                  Each Party shall
number the candidates in order of preference (with the number one (1) signifying
the greatest preference) and shall deliver the list to the CPR within seven (7) days
following receipt of the list of candidates. If a Party believes a conflict of
interest exists regarding any of the candidates, that Party shall provide a
written explanation of the conflict to the CPR along with its list showing its order
of preference for the candidates. Any Party failing to return a list of
preferences on time shall be deemed to have no order of preference.

 

(d)                                 If the Parties
collectively have identified fewer than three (3) candidates deemed to
have conflicts, the CPR immediately shall designate as the Neutral the
candidate for 

 

 

whom the Parties collectively have indicated the greatest preference.
If a tie should result between two candidates, the CPR may designate
either candidate. If the Parties collectively have identified three (3) or
more candidates deemed to have conflicts, the CPR shall review the explanations
regarding conflicts and, in its sole discretion, may either (i) immediately
designate as the Neutral the candidate for whom the Parties collectively have
indicated the greatest preference, or (ii) issue a new list of not less
than five (5) candidates, in which case the procedures set forth in
subsections 2(a) – 2(d) shall be repeated.

 

3.                                       No earlier than
twenty-eight (28) days or later than fifty-six (56) days after selection, the
Neutral shall hold a hearing to resolve each of the issues identified by the
Parties. The ADR proceeding shall take place in Honolulu, Hawaii, or at such
other location agreed upon by the Parties. The language of the ADR shall be
English.

 

4.                                       At least seven (7) days
prior to the hearing, each Party shall submit the following to the other Party
and the Neutral:

 

(a)                                  a copy of all
exhibits on which such Party intends to rely in any oral or written
presentation to the Neutral;

 

(b)                                 a list of any
witnesses such Party intends to call at the hearing, and a short summary of the
anticipated testimony of each witness;

 

(c)                                  a proposed ruling on
each issue to be resolved, together with a request for a specific damage award
or other remedy for each issued, provided, the proposed rulings and remedies
shall not contain any recitation of the facts or any legal arguments and shall
not exceed one (1) page per issue;

 

 

(d)                                 a brief in support of
such Party’s proposed rulings and remedies, provided that the brief shall not
exceed twenty (20) pages, provided, this page limitation shall apply
regardless of the number of issues raised in the ADR proceedings.

 

Except as expressly set forth in subsections
4(a) – 4(d), no discovery shall be required or permitted by any means,
including depositions, interrogatories, requests for admissions, or production
of documents.

 

5.                                       The hearing
shall be conducted on two (2) consecutive days and shall be governed by
the following rules:

 

(a)                                  Each Party shall be
entitled to five (5) hours of hearing time to present its case. The
Neutral shall determine whether each party has had the five (5) hours to
which it is entitled.

 

(b)                                 Each Party shall be
entitled, but not required, to make an opening statement, to present regular
and rebuttal testimony, documents or other evidence, to cross-examine
witnesses, and to make a closing argument. Cross-examination of witnesses shall
occur immediately after their direct testimony, and cross-examination time
shall be charged against the party conducting the cross-examination.

 

(c)                                  The Party initiating
the ADR shall begin the hearing and, if it chooses to make an opening
statement, shall address not only issues it raised but also any issues raised
by the responding Party. The responding Party, if it chooses to make an opening
statement, also shall address all issues raised in the ADR. Thereafter,
the presentation of regular and rebuttal testimony and documents, other
evidence, and closing arguments shall proceed in the same sequence.

 

 

(d)                                 Except when
testifying, witnesses shall be excluded from the hearing until closing
arguments.

 

(e)                                  Settlement
negotiations shall not be admissible under any circumstances. Affidavits
prepared for purposes of the ADR hearing shall not be admissible. As to all
other matters, the Neutral shall have sole discretion regarding the
admissibility of any evidence.

 

6.                                       Within seven (7) days
following completion of the hearing, each Party may submit to the other
Party and the Neutral a post-hearing brief in support of its proposed rulings
and remedies, provided that such brief shall not contain or discuss any
evidence not presented at the hearing and shall not exceed ten (10) pages.
This page limitation shall apply regardless of the number of issues raised
in the ADR proceeding.

 

7.                                       The Neutral
shall rule on each disputed issue within fourteen (14) days following
completion of the hearing. Such ruling shall adopt in its entirety the proposed
ruling and remedy of one of the Parties on each disputed issue but may adopt
one Party’s proposed ruling and remedies on some issues and the other Party’s
proposed rulings and remedies on other issues. The Neutral shall not issue any
written opinion or otherwise explain the basis of the ruling.

 

8.                                       The Neutral
shall be paid a reasonable fee plus expenses. These fees and expenses, along
with the reasonable legal fees and expenses of the prevailing Party (including
all expert witness fees and expenses), the fees and expenses of a court
reporter, and any expenses for a hearing room, shall be paid as follows:

 

(a)                                  If the Neutral rules in
favor of one Party on all disputed issues in the ADR, the losing Party shall
pay 100% of such fees and expenses.

 

(b)                                 If the Neutral rules in
favor of one Party one some issues and the other Party on other issues, the
Neutral shall issue with the rulings a written determination as to how 

 

 

much such fees and expenses shall be allocated between the Parties. The
Neutral shall allocate fees and expenses in a way that bears a reasonable
relationship to the outcome of the ADR, with the Party prevailing on more
issues, or on issues of greater value or gravity, recovering a relatively
larger share of its legal fees and expenses.

 

9.                                       The rulings of
the Neutral and the allocation of fees and expenses shall be binding,
non-reviewable, and non-appealable, and may be entered as a final judgment
in any court having jurisdiction.

 

10.                                 Except as provided in Article 7
of the Agreement to which this Exhibit is attached or as required by law,
the existence of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings and briefs), and
the rulings shall be deemed confidential information. The Neutral shall have
the authority to impose sanctions for unauthorized disclosure of confidential
information.

 

 

EXHIBIT C

 

IDENTIFICATION
OF EISAI’S

DESIGNATED
OUTSIDE COUNSEL

 

Name of Attorney:                                             [***]

 

Name of Law Firm:                                              [***]

 

***   Confidential
Treatment Requested

 

 

EXHIBIT D

VALIDATION CRITERIA

 

[***]

 

***   Confidential
Treatment Requested

 

 

EXHIBIT E

 

AGREEMENT
BETWEEN EISAI’S COUNSEL AND NEUROGENETICS

 

February 25, 2005

 

VIA FACSIMILE

 

Kumar Srinivasan, Ph.D.

Vice President of Corporate Development

Neurogenetics, Inc.

11085 North Torrey Pines Road

Suite 300

La Jolla, CA 92037

 

Dear Dr. Srinivasan:

 

This is the agreement between Neurogenetics, Inc.
and [***] that is referenced in Section 3.2(a) of the Collaboration
Agreement between Neurogenetics, Inc. and Eisai Co., Ltd., dated February 28th,
2005. This letter agreement is separate from the letter agreement between
Neurogenetics, Inc. and [***] dated February 14, 2005, which remains
in full force and effect and is not altered by this agreement.

 

1.                                       Neurogenetics
and Eisai are each engaged in projects whose objective is to discover and
develop compounds that preferentially lower secreted [***] without
significantly inhibiting[***]. It is a shared objective of Neurogenetics and
Eisai that, except as is necessary to implement the Collaboration Agreement,
neither party is to be informed of the identity or structure of the compounds
that are the subject of discoveries, development or testing by the other. To
that end, Section 3.2 of the Collaboration Agreement provides that certain
disclosures will be made, and rights of access granted, to Eisai’s Counsel as
distinguished from Eisai itself. Eisai has designated [***] as Eisai’s Counsel
for the purposes of the Collaboration Agreement. This letter agreement
establishes [***]’s obligations to Neurogenetics with respect to information
disclosed to or learned by [***]by reason of its status as Eisai’s Counsel
under the Collaboration Agreement. Capitalized terms in this letter agreement
shall, unless expressly defined in this agreement, have the same meaning as
capitalized terms used in the Collaboration Agreement.

 

2.                                       It
is anticipated that Neurogenetics will disclose to Eisai’s Counsel (a) information
that is descriptive of the compounds discovered or developed by Neurogenetics
that preferentially lower secreted [***] without significantly affecting [***],
including the precise chemical structure of those compounds, (b) information
regarding the disclosed compounds, including the results of studies, tests and
assays designed to determine, among other things, the potential safety,
efficacy and commercial utility of the disclosed compounds as 

 

***   Confidential
Treatment Requested

 

 

contemplated by the Collaboration Agreement, and (c) information
relating to the progress and status of the Project, and Neurogenetics’ performance
under the Collaboration Agreement. All such information (x) shall be used
only by [***] solely for the purposes stated in the Collaboration Agreement and the rendering of related legal advice to
Eisai , and (y) shall not, without the written consent of
Neurogenetics and Eisai, be disclosed by [***]to any third party (parties other
than Neurogenetics, Eisai and their respective Affiliates) unless compelled to
do so by an order of a court of competent jurisdiction or a governmental agency.
[***] shall not disclose any such information provided to it by Neurogenetics
regarding the identity and structure of compounds developed by Neurogenetics to
Eisai except as contemplated by paragraph 3.

 

3.                                       It
is anticipated that Neurogenetics will disclose to [***]information regarding
the identity and structure of compounds developed by Neurogenetics that
Neurogenetics will not provide to Eisai. [***] may, in its discretion, but only
on seven calendar days’ prior written notice to Neurogenetics, disclose that
information to Eisai in order to allow Eisai to determine whether it wishes to
provide an Indication of Interest to Neurogenetics or otherwise to exercise its
rights under Articles 3 and 6 of the Collaboration Agreement.

 

4.                                       Eisai
may, in its discretion, prior to Eisai’s receipt of a disclosure pursuant to
paragraph 3 above provide to [***] a dated, written disclosure of one or
more compounds that are the subject of Eisai’s own effort to discover and
develop compounds that preferentially lower secreted [***]. In the event of
such a disclosure, [***] will inform Neurogenetics that the disclosure has
been made, will not inform Neurogenetics of the content of that
disclosure, but will retain the disclosure separately from its other files and
records relating to the Collaboration Agreement, and in a form that cannot
be altered electronically, so that Eisai and Neurogenetics may refer to it
in the event of a future dispute, if any, between them with respect to the
independence of Eisai’s research and development efforts.

 

5.                                       Neurogenetics
agrees that, during the Term and the Extension Term of the Collaboration
Agreement, and thereafter with respect to Validated Compounds that are the
subject of rights or obligations referenced in Section 6.3 of the
Collaboration Agreement, it will (a) promptly, and at reasonable
intervals, inform [***] of its efforts, and the status of its efforts, to
obtain patent protection relating to any Validated Compound, and (b) allow
its patent counsel to consult with [***] regarding those efforts. Nothing in
this paragraph 5 will give Eisai or [***] the right to control or direct
Neurogenetics’ efforts to obtain patent protection relating to a Validated
Compound. [***] shall retain any information that it receives pursuant to this
paragraph 5 in confidence, except that it may disclose that
information to Eisai without disclosing information of the type described in
paragraph 3 unless that information has previously been disclosed to Eisai in
accordance with paragraph 3.

 

6.                                       [***]agrees
that, during the Term and the Extension Term and for a period of one year
thereafter, it will not, without Neurogenetics’ written consent, file or
prosecute any patent application for Eisai or any third party that claims a
compound, pharmaceutical composition or method of treatment that, to its
knowledge, causes, or results in, a lowering of secreted [***] without
substantially affecting [***], and will not at any time use any confidential
information of Neurogenetics provided to it hereunder in connection with filing
or prosecuting any patent 

 

***   Confidential
Treatment Requested

 

 

application for Eisai or any third party or for any
other purpose (except as expressly contemplated by paragraphs 2, 3 and 5) .

 

7.                                       Neurogenetics
shall not be responsible for any fee charged by [***] for services relating to
this letter agreement or the Collaboration Agreement. Nothing contained in this
letter agreement shall create an attorney-client relationship between [***] and
Neurogenetics. Neither this agreement, nor any action taken pursuant to this
agreement, shall create a conflict of interest or (except as stated in
paragraph 6) provide any other reason for precluding [***] from
representing Eisai, or any third party, with respect to any matter, or in any
proceeding, where Eisai or the third-party’s interests are adverse to those of
Neurogenetics; provided that in no event may [***] represent Eisai in any
litigation or dispute resolution proceeding adverse to Neurogenetics arising
out of or relating to the Collaboration Agreement (although [***] may provide
information obtained, reviewed or created by it pursuant to its activities
under this letter agreement in connection with such proceeding).

 

8.                                       This
letter agreement shall be governed by and construed in accordance with the law
of the Commonwealth of Massachusetts, without regard to conflict of law
principles. This letter agreement and the letter agreement dated February 14,
2005 state the entire agreement between Neurogenetics and [***]. This agreement
may not be amended except by a writing signed by an officer of
Neurogenetics and a partner of [***]. All notices given pursuant to this letter
agreement shall be given in the manner set forth in the Collaboration Agreement.
Notices given to Neurogenetics shall be given to the person and at the address
then required by the Collaboration Agreement.

 

Please confirm the foregoing is an accurate and
complete statement of the agreement between Neurogenetics and [***] by signing
this agreement in the location provided below.

 

	
   

  	
  [***]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Signature illegible

  	
   

  
	
   

  	
   

  	
  Partner

  	
   

  

 

CONFIRMED and AGREED:

   NEUROGENETICS, INC.

 

	
  By:

  	
  /s/Neil M.
  Kurtz

  	
   

  
	
  Its

  	
  Neil M.
  Kurtz

  	
   

  

 

RSFJr/kf

 

***   Confidential
Treatment Requested

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