Document:

ex10-22.htm

Exhibit 10.22

 

AGREEMENT BETWEEN

 

MOUNT SINAI SCHOOL OF MEDICINE OF NEW YORK UNIVERSITY

 

AND

 

VISTAGEN THERAPEUTICS, INC.

 

LICENSE AGREEMENT

This License Agreement (the "Agreement") is made and effective as of October 1, 2004 (the "Effective Date"), by and between:

 

MOUNT SINAI SCHOOL OF MEDICINE OF NEW YORK UNIVERSITY, a corporation organized and existing under the laws of the State of New York and having a place of business at One Gustave L. Levy Place, New York, NY 10029 ("MSSM")

 

AND

 

VistaGen Therapeutics, Inc., a corporation duly organized and existing under the laws of the State of California, and having its principal office at 1450 Rollins Road, Burlingame, CA 94010 ("COMPANY").

 

  

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RECITALS

 

WHEREAS:

 

MSSM has an ownership interest in certain Patent Rights (as hereinafter defined); and

 

COMPANY wishes to obtain a license to make, have made, use, import, put into use, distribute, sublicense, sell and have sold products covered by the Patent Rights and MSSM desires to grant such license, all on the terms and conditions set forth herein.

 

NOW, THEREFORE, IT IS HEREBY DECLARED AND AGREED BETWEEN THE PARTIES AS FOLLOWS:

 

    1. Definitions: Whenever used in this Agreement, the following terms shall have the following meanings:

 

       a.  "Affiliate" shall mean any corporation, firm, limited liability company, partnership or other entity that directly or indirectly controls or Is controlled by or is under common control with a party to this Agreement. "Control" means ownership, directly or through one or more Affiliates, of 50 percent or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or 50 percent or more of the equity interests in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby a party controls or has the right to control the board of directors or equivalent governing body of a corporation or other entity.

 

       b.  "Calendar Year" shall mean any consecutive period of twelve months commencing on the first day of January of any year.

 

       c.  "Biological Materials" shall mean materials and cells covered by the Patent Rights

 

       d.  "Field" shall mean the use of the Patent Rights for in vitro drug screening assays, predictive toxicology and efficacy assays, drug-related pharmacology assays, genomics and proteomics studies, and developing human and animal therapeutic and diagnostic products. Field shall not mean Cell-Based Therapy.

 

       e.  "Gene Therapy" shall mean the introduction of genes into cells to modify the behavior of such cells.

 

       f.  "Cell-based Therapy" shall mean the introduction of autologous or non-autologous genetically modified or genetically unmodified live cells in to an organism to treat a condition.

 

       g.  "License" shall mean the license under the Patent Rights to make, have made, use, import, export, put into use, distribute, sublicense, sell and have sold the Licensed Products in the Field in the Territory during the term of this Agreement as provided in Article 2, below.

 

       h.  "Licensed Method" shall mean any process, method or use that is covered by the Patent Rights or whose use of practice would constitute, but for the license granted to Licensee pursuant to this Agreement, an infringement of any issued or pending claim within the Patent Rights.

 

          i. "Licensed Product(s)" shall mean any material or product or kit, or any service,   process, or procedure that

 

          i.  Either is covered by the Patent Rights or whose discovery, development, registration manufacture, use or sale would constitute, but for the license granted to COMPANY pursuant to this Agreement, an infringement of any pending or issued claim within the Patent Rights or

 

          ii.  Is discovered, developed, made, sold, registered or practiced using Licensed Method or which may be used to practice the Licensed Method, in whole or in part or

 

          iii.  Is a kit, reagent or material which comprises, contains or makes use of Biological Material in its manufacture, testing use or sale

  

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       j. "Net Income" shall mean any royalties on Net Sales COMPANY is entitled to receive from sales of Licensed Products by a sublicensee.

 

       k. "Net Sales" shall mean the total dollar amount received, by COMPANY or by any COMPANY Affiliate or sublicensee in connection with sales to any purchaser of the Licensed Products that is not an Affiliate or a sublicensee of COMPANY or an COMPANY Affiliate, after deduction of all the following to the extent applicable to such sales;

 

	
i.

	
Trade, cash and quantity credits, discounts, refunds or rebates;

	
ii.

	
Allowances or credits for returns;

	
iii.

	
Sales commissions;

	
iv.

	
Sales taxes (including value added tax);

	
v.

	
Export and import duties; and

	
vi.

	
Freight and insurance charges borne by the seller.

 

         L "Patent Rights" shall mean any issued patent or any patent to be issued pursuant to any United States or foreign patent application owned, by MSSM, listed in this subclause 1.k. together with any continuations in whole, divisional or substitute patents, any reissues or re-examinations of any such application or patents, and any extension of the term of any such patent in the Field. The issued patents and patent applications referred to in the preceding sentence are:

 

          i. US Provisional patent application 60/381.617 filed 05/17/02

 

          ii. US Provisional patent application 60/444,851 filed 02/04/03

 

          iii. PCT application PCT/US03/15658 filed 05/19/03 m. "Territory" shall mean Worldwide

 

      n. "Valid Claim" shall mean a claim of (i) an issued patent included in the Patent Rights which has not been declared invalid In a final, unappealable decision of a court of appropriate jurisdiction, or (ii) a pending patent application included in the Patent Rights which is being diligently prosecuted by or on behalf of MSSM and has not been formally terminated or abandoned without issuance of a patent.

 

    2, The License:

      a.  Subject to the terms and conditions hereinafter set forth, MSSM hereby grants to COMPANY and COMPANY hereby accepts from MSSM:

 

          i.  Exclusive right under the Patent Rights to make have made use, import, export, put into use, distribute, sublicense, sell and have sold Licensed Products in the Field in the Territory during the term of this Agreement; and

 

          ii.  Non-exclusive right under the Patent Rights to make, have made, use, import, export, put into use, distribute, sell and have sold Licensed Products for Gene Therapy in the Field and in the Territory during the term of this Agreement.

      b.  COMPANY shall be entitled to grant sublicenses to the exclusive license described in this section 2.a.i. under the License on terms and conditions not inconsistent with this Agreement (except that the rate of royalty may be at higher rates than those set forth in this Agreement):

 

          i.    to an Affiliate, and

 

          ii.        to other third parties for consideration and in arms-length transactions.

  

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    c.  COMPANY shall be entitled to grant sublicenses to the nonexclusive license described in this section 2.a.ii if, and only if, such a sublicense is required by a sublicensee to practice the exclusive license described In this section 2,a.i.

 

    d.  All sublicenses shall only be granted by COMPANY pursuant to a written agreement, a true and complete copy of which shall be submitted by COMPANY to MSSM as soon as practicable after the signing thereof. Each sublicense granted by COMPANY hereunder shall be subject and subordinate to the terms and conditions of this License Agreement and shall contain, inter alia, the following provisions:

 

            i. the sublicense shall expire automatically on the termination of the License;

 

            li. up on the termination of the License all sublicensees shall have, for a period of ninety (90) days following termination of the License, the right to negotiate directly with MSSM for a license with rights not inconsistent with their existing sublicense;

 

          iii. the sublicense shall not be assignable, in whole or in part;

 

          iv. the sublicensee shall not be entitled to grant further sublicenses; and

 

          v.  both during the term of the sublicense and thereafter the sublicensee shall be bound by a secrecy obligation similar to that imposed on COMPANY in Section 8 below, and that the sublicensee shall bind its employees and agents, both during the terms of their employment and thereafter, with a similar undertaking of secrecy.

 

       e.  The sublicense agreement shall also include the text of Sections 8, 11 and 12 of this Agreement and shall state that MSSM is an intended third party beneficiary of such sublicense agreement for purposes of enforcing such indemnification and insurance provisions.

 

       f. The License shall be subject to

 

          i.  a non-exclusive license in favor of the U.S. Government to the extent required by Title 35 U.S.C.A. § 200 et seq., or as otherwise required by virtue of use of federal funding in support of inventions claimed within the Patent Rights and

 

          ii.  a right and license retained by MSSM on behalf of itself and its faculty, students and academic collaborators to practice the Patent Rights for its own bona fide research, including sponsored research and collaborations. The retained rights granted in this Section 2e shall not give MSSM the right to offer or grant rights in the Field under the Patent Rights to third parties.

 

          iii.  Non-exclusive rights of F. Hoffmann-La Roche AG to use the Patent Rights for research purposes. The right to use for research purposes does not include the right to provide any kind of service to third parties and/or selling subject matter claimed.

 

       g.           Except for the License expressly provided in this Section 2, neither party hereto will, as a result of this Agreement, obtain any ownership interest in, or any other right or license to, any existing technology, patents, or Confidential Information, as defined in Section 8, below, of the other party,

 

    3.  Issue Fee: Upon execution of this Agreement, COMPANY shall pay MSSM and issue fee of $30,000.00. COMPANY shall pay MSSM $70,000.00 upon the first issuance of a patent under the Patent Rights. These fees are non-refundable and are not an advance against royalties.

  

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    4.  Maintenance Fees: Beginning with the third anniversary of the execution of the agreement subsequent to the first anniversary, COMPANY shall pay MSSM a license maintenance fee of $20,000.00 per year, payable upon each anniversary of the execution of the agreement. This maintenance fee shall be fully creditable against royalties.

 

    5. Royalty:

       a. In consideration for the grant of the License hereunder

 

           i.    COMPANY shall pay to MSSM:

 

             1.  In cases where the Licensed Product is a kit, reagent or other non-therapeutic, non-diagnostic product: three percent (3%) of Net Sales from Licensed Products by COMPANY, its affiliates, sublicensees and distributors to third parties;

 

             2.  In cases where the Licensed Product Is a therapeutic or diagnostic product: the lesser of (i) 25% of Net Income and (ii) three percent (3%) of Net Sales from Licensed Products by COMPANY its affiliates, sublicensees and distributors to third parties; and

 

             3.  In cases where the Licensed Product is a service or an assay: ten percent (10%) of Net Income from Licensed Products

 

          ii.  In the event COMPANY grants sublicenses with respect to any Licensed Product pursuant to which COMPANY receives Milestone Payments, COMPANY shall pay to MSSM ten percent (10%) of all such Milestone Payments received. "Milestone Payments" shall mean payments made to COMPANY upon fulfillment by COMPANY or the sublicensee of designated development objectives or regulatory requirements.

 

          iii.  In the event COMPANY grants sublicenses with respect to any Licensed Product pursuant to which COMPANY receives remuneration other than (1) royalties, (2) Milestone Payments, and (3) research and development reimbursements provided specifically to develop Licensed Products, then COMPANY shall pay to MSSM 25% of the amount of the aggregate of all payments that COMPANY receives from such sublicensees or other parties in that Calendar Year, including, without limitation:

 

              a. Contract Signature Payments

              b. Technology Premium Equity Payments

              c. Maintenance Fees, or

  

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       d. Manufacturing Profits.

 

       As used in this Section 5.a.(iii)a, the term "Contract Signature Payment" means license initiation fees and all other up front payments made to COMPANY in connection with a sublicense or similar agreement; "Technology Premium Equity Payment" means payments to COMPANY equal to A x (B-C), where "A" is the number of COMPANY shares of stock or other units of equity purchased by the sublicensee, "B" is the unit price paid by the sublicense, and "C is the fair market value of the equity which shall be the average closing price of COMPANY Common Stock for the 10 trading days immediately preceding the date such sublicense is executed, or, if there is no trading market for the security issued, the good faith determination of the COMPANY'S board of directors as to its fair market value; "Maintenance Fees" means payments (such as annual minimum royalties) made by sublicensees to COMPANY to preserve, or to avoid a forfeiture of rights under, the sublicense agreement; and "Manufacturing Profits" means the amount by which actual payments made by a sublicensee to COMPANY for any Licensed Product or components of any Licensed Product exceeds COMPANY'S standard costs for manufacture and shipment of such products plus twenty percent (20%) of such costs, "standard costs" being determined in accordance with generally accepted accounting principles in the United States;

 

       With respect to any sublicensing or other transaction to which this 5.a.(iii) applies but which relates to products and services in addition to Licensed Products and for which an allocation would be necessary, the parties shall meet and attempt to agree on which portion of the total payments received by COMPANY pursuant to such transaction would be subject to this Section 5.a.(iii). If the parties cannot agree upon such allocation within a reasonable period of time, COMPANY shall select an independent certified public accountant, to which MSSM has no reasonable objection, to determine such allocation. Such allocation shall be determined in accordance with generally accepted accounting principles in the United States.

 

      b. Notwithstanding the foregoing, if, in order to avoid infringement of third party issued patent(s) by the practice of the license rights granted herein, it is necessary for COMPANY, in its reasonable judgment, to take license(s) to such third party issued patent(s) requiring payments, COMPANY may deduct a portion of any third party running royalty payments or fees from Royalties due as follows, on an infringing product by product basis

 

          i. deductions shall only be taken on a country-by country basis

 

          ii.  deductions with respect to a royalty or fee payment due a third party for product sales in a calendar year shall only be taken from Royalties due for the same calendar year with respect to gross sales of Licensed Products in that calendar year in the applicable country

 

          iii.  Licensee can deduct fifty percent (50%) of any such third party royalties paid, but royalty payments shall not be less than fifty percent (50%) of Royalties after all deductions are taken in a calendar year with respect to such country had no deductions been made, and

 

            iv. Licensee shall reasonably document to MSSM its continuing contractual obligation to make such third party royalty payments and that such payments have actually been made to the third party.

 

       c.  COMPANY shall notify MSSM of the date of the first commercial sale of a Licensed Product as soon as practicable after the making of such commercial sale.

  

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       d.  Commencing on the date of first commercial sale of a License Product, COMPANY shall, within 90 days from the last day of each June and December in each Calendar Year during the term of the License, submit to MSSM a full and detailed report of royalties or payments due MSSM under the terms of this Agreement for the preceding half year (the "Semi-Annual Report"), setting forth the Net Sales and lump sum payments and all other payments or consideration from sublicensees upon which such royalties are computed and including, on a Licensed Product-by-Licensed Product basis at least the:

 

          i.  Quantity of Licensed Products used, sold, transferred or otherwise disposed of,

 

          ii. Selling price of each Licensed Product,

 

          iii. Deductions permitted to arrive at Net Sales

 

          iv.  Royalty computations and deductions therefrom based on royalty payments to third parties.

 

          If no royalties are due, a statement shall be sent to MSSM stating such fact. The full amount of any royalties or other payments due to MSSM for the preceding half-year shall accompany each such report on royalties and payments. COMPANY and all its sublicensees shall keep for a period of at least five years after the date of entry, full, accurate and complete books and records consistent with sound business and accounting practices and in such form and in such detail as to enable the determination of the amounts due to MSSM from COMPANY pursuant to terms of this Agreement.

 

       e.  At the request and expense of MSSM, COMPANY shall permit (and shall require its sublicensees to permit) an independent certified or chartered public accountant appointed by MSSM, at reasonable times during normal business hours and upon reasonable notice, but in any event no more than once per calendar year, to examine the records of COMPANY (and its sublicensees) to the extent necessary to verify royalty calculations made hereunder; provided, however, that such examination shall be at the expense of COMPANY if it reveals a discrepancy in the amount of royalties to be paid in MSSM's favor of more than five percent. Results of such examination shall be made available to both COMPANY and MSSM.

 

    6, Method of Payment

 

       a.  Royalties and any other payments due to MSSM hereunder shall be paid to MSSM in United States dollars.

 

       b.  COMPANY shall be responsible for prompt payment to MSSM of all royalties defined by Section 5 due and received by COMPANY on sale, transfer or disposition of Licensed Products by the sublicensees of COMPANY.

 

       c. As to sales occurring in currencies other than U.S. Dollars, Net Sales shall first be calculated in the currency in which sale occurred and then converted to U.S. Dollars at the buying rate for such currency calculated as the average of the closing buying rate for the first and last business day of the six month period for which royalties are due, as set forth in the Wall Street Journal for such dates.

 

    7. Development and Commercialization

 

       a.  COMPANY shall use all commercially reasonable efforts to bring one or more Licensed Products to market through a thorough, vigorous and diligent program for exploitation of the Patent Rights in the Field. COMPANY shall not, however, be required to pursue the development of more than one Licensed Product at a time, nor shall COMPANY be required to pursue every possible Licensed Product.

  

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       b.  Attached as Appendix A to this Agreement is the current development plan of COMPANY for the forthcoming period of twelve months (such plan, as updated from time to time as described in clause (c) below, the "Plan"). As and when appropriate, future Plans will incorporate efficacy, pharmaceutical safety, toxicological and/ or clinical tests or any other activities necessary in order to obtain the approval of the FDA and counterpart foreign regulatory agencies for the production, use and sale of Licensed Products, as well as marketing plans to commercialize Licensed Products that have obtained such approvals.

 

       c.  On the earlier of thirty (30) days prior to the first anniversary of the Effective Date or the end of COMPANY'S first fiscal year, and thereafter on each successive anniversary of such date, COMPANY shall deliver to MSSM a report setting forth in reasonable detail progress and problems with the implementation of the Plan and, providing an update on its efforts to commercialize Licensed Products, including a forecast and schedule of major events required to market the Licensed Products. Such report shall also include any amendments proposed by COMPANY to the Plan based upon the progress made and then current scientific, regulatory and commercial exigencies relating to Licensed Products. Within forty-five (45) days following the delivery of such a report (a "Diligence Report") representatives of MSSM may request a meeting with COMPANY to review the Diligence Report, the status of the efforts of COMPANY under the Plan and any proposed amendments to the Plan. Any such proposed amendments to the Plan shall be subject to approval by MSSM, which approval shall not be unreasonably withheld or delayed. Upon approval of any such amendments, they shall be deemed amendments to the Plan, added to Appendix A and deemed incorporated Into this Agreement.

 

      d COMPANY will use all commercially reasonable efforts to accomplish the milestones described in the Plan.

 

       e. Provided that applicable laws, rules and regulations so require, the manufacture of Licensed Products shall be carried out by COMPANY or its agents in accordance with FDA Good Laboratory Practices and FDA Good Manufacturing Practice ("GMP") procedures in a facility which has been certified by the FDA and the performance of the tests, trials, studies and other activities specified in the Plan shall be so performed by COMPANY or its agents in accordance with FDA clinical trial procedures. MSSM shall have no responsibility for the actual production, distribution, sale or use of any Licensed Product.

 

        f.  If at any time COMPANY abandons or suspends its efforts to commercialize all Licensed Products for a period exceeding ninety (90) days, COMPANY shall Immediately notify MSSM giving reasons and a statement of its intended actions. MSSM shall be entitled to terminate this Agreement for "Cause" in accordance with Section 13 upon any such abandonment.

 

        g.  MSSM shall also be entitled to terminate this Agreement for "Cause" in accordance with Section 13 if COMPANY shall fail to deliver any Diligence Report on a timely basis, or fail to use commercially reasonable efforts to implement the Plan, and such failure is not cured within the sixty (60) day period set by the written notice provided pursuant to Section 13, unless such failure is excused by:

 

          i. Causes beyond COMPANY'S direct control; or

 

          ii. MSSM's failure to meet its obligations hereunder; or

 

          iii.  Inaction of any federal or state agency whose approval is required for commercial sales of Licensed Products.

  

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        h.  Provided that applicable laws, rules and regulations so require, the performance of the tests, trials, studies and other activities specified in subsection b, above, shall be carried out in accordance with FDA Good Laboratory Practices and FDA Good Manufacturing Practice ("GMP") procedures in a facility which has been certified by the FDA as complying with GMP. MSSM shall have no responsibility for the actual production, distribution, sale or use of any Licensed Product.

 

    6. Confidential Information.

 

      a. In the course of research to be performed under this Agreement, it will be necessary for each party to disclose "Confidential Information" to the other. For purposes of this Agreement, "Confidential Information" is defined as all information, data and know-how disclosed by one party (the "Disclosing Party") to the other (the "Receiving Party"), either embodied in tangible materials (including writings, drawings, graphs, charts, photographs, recordings, structures, technical and other information) marked "Confidential" or, if initially disclosed orally, which is reduced to writing marked "Confidential" within 21 days after initial oral disclosure, other than that information which is:

 

          i.  Known by the Receiving Party at the time of its receipt, and not through a prior disclosure by the Disclosing Party, as documented by the Receiving Party's business records; or

 

          ii.  At the time of disclosure, or thereafter becomes, published or otherwise part of the public domain without breach of this Agreement by the Receiving Party; or

 

          iii.  Obtained from a third party who has the legal right to make such disclosure and without any confidentiality obligation to the Disclosing Party; or

 

          iv.  Independently developed by the Receiving Party without the use of Confidential Information received from the Disclosing Party and such independent development can be documented by the Receiving Party; or

 

          v.  disclosed to governmental or other regulatory agencies in order to obtain patents, provided that such disclosure may be made only to the extent reasonably necessary to obtain such patents or authorizations, and further provided that any such patent applications shall be filed in accordance with the terms of this Agreement; or

 

         vi.    required by law, regulation, rule, act or order of any governmental authority to be disclosed.

 

       b.  The Receiving Party agrees that at all times and notwithstanding any termination, expiration, or cancellation hereunder, it will hold the Confidential Information of the Disclosing Party in strict confidence, will use all reasonable safeguards to prevent unauthorized disclosure by its employees and agents. Notwithstanding the foregoing, the parties recognize that industry standards with respect to the treatment of Confidential Information may not be appropriate in an academic setting. However, MSSM agrees to retain Confidential Information of COMPANY in the same manner and with the same level of confidentiality as MSSM retains its own Confidential Information.

 

       c.  The Receiving Party will maintain reasonable procedures to prevent accidental or other loss, including unauthorized publication of any Confidential Information of the Disclosing Party. The Receiving Party will promptly notify the Disclosing Party in the event of any loss or unauthorized disclosure of the Confidential Information.

  

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       d.  Upon termination or expiration of this Agreement, and upon written request, the Receiving Party will promptly return to the Disclosing Party all documents or other tangible materials representing Confidential Information and all copies thereof.

 

       e.  The Receiving Party will immediately notify the Disclosing Party in writing, if it is requested by a court order, a governmental agency, or any other entity to disclose Confidential Information in the Receiving Party's possession. The Disclosing Party will have an opportunity to intervene by seeking a protective order or other similar order, in order to limit or prevent disclosure of the Confidential Information. The Receiving Party will disclose only the minimum Confidential Information required to be disclosed in order to comply, whether or not a protective order or other similar order is obtained by the Disclosing Party.

 

       f.  For as long as Gordon Keller is an MSSM faculty member, MSSM shall provide COMPANY with a copy of any manuscript produced by Gordon Keller and coworkers, directly relevant to the License as determined by Gordon Keller, prior to submitting for publication and give COMPANY thirty (30) days for assessment of disclosure issues relating to confidential information necessary for full and complete prosecution of Patent Rights.

 

    9. Patent Rights.

 

      a If either party to this Agreement acquires information that a third party is infringing one or more of the Patent Rights, the party acquiring such information shall promptly notify the other party to Agreement in writing of such infringement.

 

      b. in the event of infringement of the Patent Rights, COMPANY shall have the right, but not the obligation, to bring suit against the infringer. Should COMPANY elect to bring suit against an infringer, COMPANY shall be entitled to retain counsel of its own choosing, and shall have the right to join MSSM as party plaintiff in any such suit.  Except as otherwise provided herein, the expenses of such suit or suits that COMPANY elects to bring, shall be paid for entirely by COMPANY and COMPANY shall hold MSSM free, clear and harmless from and against any and all costs of such litigation, including attorneys' fees. COMPANY shall not compromise or settle such litigation without the prior written consent of MSSM which shall not be unreasonably withheld.

 

       c.  If COMPANY shall undertake the enforcement or defense of the Patent Rights by litigation, COMPANY may withhold royalties otherwise thereafter due MSSM hereunder and apply the same toward reimbursement of up to half of COMPANY'S expenses, including reasonable attorney's fees, in connection therewith, provided however that the maximum amount that can be withheld each year shall not exceed 50% of royalties due to MSSM in that year.

 

       d.  If COMPANY exercises its right to sue, it shall first reimburse itself out of any sums recovered in such suit or in settlement thereof for all costs and expenses of every kind and character, including reasonable attorneys' fees, necessarily involved in the prosecution of any such suit, and then to MSSM the amount of royalties applied to reimbursement under 9.c. above. If after such reimbursement, any funds shall remain from said recovery, the amount of said funds shall be added to the amount of Net Sales for the calendar quarter in which such recovery was made.

  

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       e.  If COMPANY does not bring suit against said infringer pursuant to subsection b, above, or has not commenced negotiations with said infringer for discontinuance of said infringement, within 90 days after receipt of such notice, MSSM shall have the right, but not the obligation, to bring suit for such infringement and to join COMPANY as a party plaintiff, in which event MSSM shall hold COMPANY free, clear and harmless from and against any and all costs and expenses of such litigation, including attorneys' fees. In the event MSSM brings suit for infringement of the Patent Rights, MSSM shall have the right to first reimburse itself out of any sums recovered In such suit or settlement thereof for all costs and expenses of every kind and character, including reasonable attorneys' fees necessarily involved in the prosecution of such suit, and if after such reimbursement, any funds shall remain from said recovery, MSSM shall promptly pay to COMPANY an amount equal to 50 percent of such remainder and MSSM shall be entitled to receive and retain the balance of the remainder of such recovery.

 

       f.  Each party shall have the right to be represented by counsel of its own selection, at its sole expense, in any suit for infringement of the Patent Rights instituted by the other party to this Agreement under the terms hereof.

 

       g.  COMPANY shall cooperate fully with MSSM at the request of MSSM, including, by giving testimony and producing documents lawfully requested in the course of a suit prosecuted by MSSM for infringement of the Patent Rights; provided MSSM shall pay all reasonable expenses (including attorneys' fees) incurred by COMPANY in connection with such cooperation. MSSM shall cooperate with COMPANY in the prosecution of a suit by COMPANY for infringement of the Patent Rights, provided that, except as otherwise provided in Section 9.f., COMPANY shall pay all reasonable expenses (including attorneys' fees) involved in such cooperation.

 

       h.  COMPANY shall, upon receipt of reasonable documentation, promptly reimburse MSSM for all of the reasonable and customary fees and expenses, relating to prosecution of Patent Rights, incurred by MSSM as of the Effective Date, and outlined in Appendix B.

 

    10.        Patent Prosecution

 

       a.  MSSM shall diligently prosecute and maintain the patent applications and patents comprising the Patent Rights using counsel of its choice upon consultation with COMPANY. MSSM counsel shall take instructions only from MSSM. MSSM shall keep COMPANY informed and apprised of the continuing prosecution of the Patent Rights. Costs of preparing, filing, prosecuting, defending and maintaining all patent applications and/or patents shall be borne by COMPANY. Patent costs incurred prior to the license agreement will be paid upon execution of the agreement. Patent costs incurred during the agreement will be paid upon invoicing. If MSSM elects not to diligently prosecute and maintain the patent applications and patents comprising the Patent Rights, and there is a single licensee, this licensee shall have the right but not the obligation to continue the prosecution of the Patent Rights. If MSSM elects not to diligently prosecute and maintain the patent applications and patents comprising the Patent Rights and there is more than one Licensee, the Licensees shall have the right but not the obligation to negotiate between themselves on how to continue the prosecution of the Patent Rights and which licensee will be responsible for the prosecution.

 

b.  MSSM shall equally prorate patent costs so that no Licensee shall be charged more than their pro rata share of all patent costs based upon the number of Exclusive Licensees under the Patent Rights. Patent costs incurred prior to the license agreement will be paid upon execution of the agreement by Exclusive Licensees who have executed license agreements within four (4) months of the date of the first executed license agreement. Patent costs incurred during the agreement will be paid upon invoicing by the total number of Exclusive Licensees at the time the expense is incurred.

  

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       c.  Nothing herein contained shall be deemed to be a warranty by MSSM that the manufacture, use, or sale of any element of the Patent Rights or any Licensed Product will not infringe any patent(s) of a third party.

 

    11,        Liability and Indemnification.

 

         a. COMPANY shall indemnify, defend and hold harmless MSSM and its trustees, officers, directors, medical and professional staff, employees, students and agents and their respective successors, heirs and assigns (the "Indemnitees"), against any liability, damage, loss or expense (including reasonable attorneys' fees and expenses of litigation) incurred by or imposed upon the Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments:

 

          i.  arising out of the production, manufacture, sale, use in commerce or in human clinical trials, lease, or promotion by COMPANY or by a licensee, Affiliate or agent of COMPANY of any Licensed Product, process or service relating to, or developed pursuant to, this Agreement, or

 

          ii.  arising out of any other activities to be carried out pursuant to this Agreement.

 

       b.  COMPANY'S indemnification under subsection a(i), above, shall apply to any liability, damage, loss or expense whether or not it is attributable to the negligent activities of the Indemnitees.

 

       c.  COMPANY'S Indemnification under subsection a(ii), above, shall not apply to any liability, damage, loss or expense to the extent that it is attributable to the negligence, gross negligence or intentional misconduct of the Indemnitees.

 

       d.  COMPANY shall, at its own expense, provide attorneys reasonably acceptable to MSSM to defend against any actions brought or filed against any party indemnified hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought.

 

       e.  EXCEPT AS PROVIDED IN THIS SECTION 11, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES.

 

    12. Security for Indemnification.

 

       a.  At such time as any Licensed Product is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by COMPANY or by a sublicensee, Affiliate or agent of COMPANY and to the extent that it is available on commercially reasonable terms, COMPANY shall at its sole cost and expense, procure and maintain policies of comprehensive general liability insurance in amounts not less than two and one-half million ($2,500,000) per incident and two and one-half million ($2,500,000) annual aggregate and naming the indemnitees as additional insureds. Such comprehensive general liability insurance shall provide

 

          i.        product liability coverage and

 

          ii, broad form contractual liability coverage for COMPANY'S indemnification under Section 11 of this Agreement.

 

       b.  The minimum amounts of insurance coverage required under this Section 12 shall not be construed as a limit of COMPANY'S liability with respect to its indemnification under Section 11 of this Agreement.

  

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       c.  COMPANY shall provide MSSM with written evidence of such insurance upon request of MSSM. COMPANY shall provide MSSM with written notice at least 60 days prior to the cancellation, non-renewal or material change in such insurance; if COMPANY does not obtain replacement insurance providing comparable coverage within such 60 day period effective immediately upon notice to COMPANY, MSSM shall have the right to terminate this Agreement effective at the end of such 60 day period without notice or any additional waiting periods.

 

       d.  COMPANY shall maintain such comprehensive general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by COMPANY or by a licensee, Affiliate or agent of COMPANY and (ii) a reasonable period after the period referred to in (c)(i) above which in no event shall be less than seven years.

 

    13. Term and Termination.

 

       a.  This Agreement shall come into force as of the Effective Date. Unless sooner terminated as provided herein, this Agreement shall expire on the expiration of the last to expire of the Patent Rights.

 

       b.  At any time prior to expiration of the term of this Agreement either party may terminate this Agreement forthwith for cause upon notice to the other party. "Cause" for termination of this Agreement shall be deemed to exist if either MSSM or COMPANY materially breaches or defaults in the performance or observance of any of the provisions of this Agreement and such breach or default is not cured within 60 days or, in the case of failure to pay any amounts due hereunder, 30 days (unless otherwise specified herein) after the giving of written notice by the other party specifying such breach or default, or if either MSSM or COMPANY discontinues its business or becomes insolvent or bankrupt.

 

       c.  Any amount payable hereunder by one of the parties to the other, which has not been paid by its due date of payment shall bear interest from its due date of payment until the date of actual payment, at the rate of two percent per annum in excess of the Prime Rate prevailing at the Citibank, Inc., New York, New York, during the period of arrears and such amount and the interest thereon may be set off against any amount due, whether in terms of this Agreement or otherwise, to the party in default by any non-defaulting party.

 

       d.  Upon termination of this Agreement for any reason, all rights in and to the Patent Rights shall revert to MSSM.

 

       e.  Termination of this Agreement shall not relieve the parties of any obligation occurring prior to such termination.

      

       f.  Sections 2d., 5., 8,11, 12 and 16 hereof shall survive and remain in full force and effect after any termination, cancellation or expiration of this Agreement.

 

    14. Representation and Covenants

 

       a.  MSSM hereby represents, warrants, and covenants to COMPANY that It is a corporation duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation or formation;

 

       b.  COMPANY hereby represents, warrants and covenants to the other party hereto that it is a corporation duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation or formation;

 

       c.  Each of MSSM and COMPANY hereby represents, warrants and covenants to the other party hereto as follows:

  

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          i.  the execution, delivery and performance of this Agreement by such party has been duly authorized by all requisite corporate action;

 

          ii.  it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

 

          iii.  the execution, delivery and performance by such party of this Agreement and its compliance with the terms and provisions hereof is not prohibited and does not and will result in a breach of any of the terms and provisions of, or constitute a default under, (i) a loan agreement, guaranty, financing agreement, agreement affecting a product, or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter documents or bylaws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound;

 

          iv.  the execution, delivery and performance of this Agreement by such party does not require the consent, approval, or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority, and the execution, delivery or performance of this Agreement will not violate any law, rule or regulation applicable to such party;

 

          v.  this Agreement has been duly authorized, executed and delivered and constitutes such party's legal, valid and binding obligation enforceable against it in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to the availability of particular remedies under general equity principles; and

 

          vi.  it shall comply with all applicable material laws and regulations relating to its activities under this Agreement.

 

          vii.  Each party represents that performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by a party prior to the execution of this Agreement.

 

         d. Except as otherwise expressly provided herein, MSSM hereby represents, warrants and covenants to COMPANY that:

 

          i.  MSSM has the full right, power and authority to grant all of the right, title and interest in the License; and

 

          ii.  There are no judgments or settlements against or owed by MSSM, or any pending or threatened claims or litigation relating to MSSM's interest in the Patent Rights; and

 

          iii.  MSSM has not granted to any other party any rights that would conflict with the rights granted in this Agreement.

 

    15.  Assignment. Neither party shall have the right to assign, delegate or transfer at any time to any party, in whole or in part, any or all of the rights, duties and interest herein granted without first obtaining the written consent of the other party to such assignment, such consent not to be unreasonably withheld; provided, however, that COMPANY may, with thirty (30) days prior written notice to MSSM, assign its rights and delegate its duties under the Agreement to the purchaser of substantially all of the assets of COMPANY, provided that the assignee agrees in writing to be bound by all the terms and conditions of this Agreement.

  

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    16.  Use of Name. Neither party may use the name of the other or its Affiliates in any publicity or advertising. A party may issue a press release or otherwise publicize or disclose this Agreement or the confidential terms and conditions hereof only with the prior written consent of the other party.

 

    17. Miscellaneous.

 

      a. In carrying out this Agreement the parties shall comply with all local, state and federal laws and regulations including but not limited to, the provisions of Title 35 U.S.C.A. § 200 et seq. and 15 CFR § 730 et seq.

 

       b.  If any provision of this Agreement is determined to be invalid or void, the remaining provisions shall remain in effect.

 

       c.  This Agreement shall be deemed to have been made in the State of New York and shall be governed and interpreted in all respects under the laws of the State of New York. Any and all disputes hereunder shall be brought and resolved solely in the courts of the State of New York in and for the Borough of Manhattan.

 

       d.  All payments or notices required or permitted to be given under this agreement shall be given in writing and shall be effective when either personally delivered or deposited, postage prepaid, in the United States registered or certified mail, addressed as follows:

To MSSM:                                 Mount Sinai School of Medicine of New York University

 

Copy to:

Attention: W. Patrick McGrath, Ph.D. One Gustave L. Levy Place, Box 1675 New York, New York 10029-6574 General Counsel (at the same address)

 

To COMPANY:

H. Ralph Snodgrass, Ph.D. President & CEO VistaGen Therapeutics, Inc. 1450 Rollins Road Burlingame, CA 94010

 

or such other address or addresses as either party may hereafter specify by written notice to the other. Such notices and communications shall be deemed to have been received by the addresses on the date of delivery if personally delivered or 14 days after having been sent by registered mail.

 

       e.  This Agreement and the exhibits attached hereto constitute the entire Agreement between the parties with respect to the subject matter hereof and no variations, modification or waiver of any of the terms or conditions hereof shall be deemed valid unless made in writing and signed by both parties hereto. This Agreement supersedes any and all prior agreements or understandings, whether oral or written, between COMPANY and MSSM.

 

       f.  No waiver by either party of any non-performance or violation by the other party of any of the covenants, obligations or agreements of such other party hereunder shall be deemed to be a waiver of any subsequent violation or non-performance of the same or any other covenant, agreement or obligation, nor shall forbearance by any party be deemed to be a waiver by such party of its rights or remedies with respect to such violation or non-performance.

  

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       g.  The descriptive headings contained in this Agreement are included for convenience and reference only and shall not be held to expand, modify or aid in the interpretation, construction or meaning of this Agreement.

 

       h.  It is not the intent of the parties to create a partnership or joint venture or to assume partnership responsibility or liability. The obligations of the parties shall be limited to those set out herein and such obligations shall be several and not joint.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

Mount Sinai School of Medicine of New York University

 

By: _

Name: Kenneth L Davis, M,D. Title: Dean

 

 

Date:

Date:

  

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APPENDIX A

 

Development Plan Pertaining to Licensed MSSM Patent Rights

  RE: Patent Right defined in License Agreement between MSSM and VistaGen dated October 1, 2004

 

During the first year of this agreement, VistaGen intends to commercially exploit this technology in two ways: 1) applying for government and disease advocacy groups for grants to develop and expand the technology for drug development; and 2) by entering into one or more research and development agreements with pharmaceutical companies for drug development,

 

A significant percentage of the grants will have Dr. Gordon Keller as a collaborator and/or advisor, and should provide MSSM with research and overhead support. The first grant to be applied for will be to exploit the technology for developing drugs for treating diabetes. We are targeting one or more grants in the range of $500,000 per year for three years.

 

The pharmaceutical agreements will be designed to use the technology for identifying drug targets through proteomics and genomics studies, and to develop pharmaceutical screening assays for the identification and development of therapeutic drug candidates in several areas, especially for diabetes and metabolic diseases.

 

These agreements typically will have sublicense rights and the following characteristics:

 

>  Sponsored, cost recovery, research to use the technology to develop commercially viable pharmaceutical assays;

 

> Sublicense and annual maintenance fees with field and geographically restricted rights;

 

> Royalties in the single digit range;

 

> Regulatory and development milestone payments; and

 

>  Opportunities for VistaGen to participate in participating in the commercial development and sales of some of the drugs.

 

In subsequent years, VistaGen will use the technology for internal research to develop drugs for diabetes and CNS diseases.

 

  

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APPENDIX B

 

Patent Cost incurred by MSSM as of the Effective Date

 

	
Application Number

	
2002

	
2003

	
2004

	
Total

	
US Provisional 60/381,017

	
$14,914.75

	
$1301.02

	
$0.00

	
$16,215.77

	
US Provisional 60/444,851

	
NA

	
$3,216.65

	
$0.00

	
$3,216.65

	
PCT/US03/15658

	
NA

	
$12,286.83

	
$3,164,01

	
$15,449,84

	
Total

	
$14,914.7$

	
$16,803.30

	
$3,164.01

	
$34,882.26ex10-23.htm

Exhibit 10.23

 

WARF Agreement No. 09-0092

 

NON-EXCLUSIVE LICENSE AGREEMENT

 

This Agreement is made effective December 5, 2008 ("Effective Date"), by and between the Wisconsin Alumni Research Foundation (hereinafter called "WARF"), a nonprofit Wisconsin corporation, and VistaGen Therapeutics, Inc., with offices at 384 Oyster Point Blvd. #8, South San Francisco, CA 94080, USA. (hereinafter called "Licensee"), a corporation organized and existing under the laws of California. WARF and Licensee each may be referred to herein individually as a "Party," or collectively as the "Parties."

 

WHEREAS, WARF owns or holds certain intellectual property rights to the inventions described in the 4 Licensed Patents defined below;

 

WHEREAS, WARF has granted to Geron Corporation ("Geron") an exclusive license under the Licensed Patents in certain fields covering Therapeutic Products and Diagnostic Products, as well as a non-exclusive license for Research Products (all defined in Appendix A), which may prohibit WARF from granting Licensee any rights outside those granted in this Agreement;

WHEREAS, Licensee desires to obtain a license under the Licensed Patents and certain Licensed Materials (defined below) and WARF is willing to grant to Licensee such a license under the terms and conditions set forth herein; and

 

WHEREAS, as of the Effective Date, Licensee does not have any Affiliates (defined in Appendix A); and Licensee will give written notice to WARF of the identity of any future Affiliates.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the Parties covenant and agree as follows:

 

Section 1. Definitions.

 

For the purposes of this Agreement, the Appendix A definitions shall apply. 

 

Section 2. Grant.

 

    A. License.

 

       (i) WARF hereby grants Licensee and its Affiliatesa world-wide, nonexclusive

license under the Licensed Patents to make, further develop, use, import, and receive Licensed Materials for use in

Internal Research.

 

       (ii) WARF hereby grants Licensee and its Affiliatesa world-wide, nonexclusive

license under the Licensed Patents and the Licensed Materials to develop, use, provide, and sell Services in the

Licensed Field.

  

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          (iii) WARF hereby grants Licensee and its Affiliatesa world-wide, nonexclusive license under the Licensed Patents and the Licensed Materials to make, develop, use, sell, offer for sale, and import Research Products in the Licensed Field.

 

       (iv) The grants of this Section 2A shall only apply to those Affiliates for which Licensee has provided written notice to WARF. Any such identified Affiliates benefiting from such grants shall be bound by all obligations under this Agreement.

 

    B.       Limited Sublicenses.

 

       (i) WARF hereby grants Licensee the right to grant written limited sublicenses under the Licensed Patents to transfer, as applicable, Licensed Materials and/or Derivative Materials to Collaborators, Development Partners and Contract Service Providers, in accordance with the following:

 

          (a) Such a limited sublicense may be granted, in the case of a Collaborator, to enable the Collaborator to engage in a project of collaborative research with Licensee or its Affiliates on Licensed Materials and Derivative Materials and/or the development of Services or Research Products. Such a limited sublicense may include a license to make or use the Licensed Materials, Derivative Materials, Services or Research Products solely for the purpose of the project, but not to sell or transfer any of them to any party other than to Licensee or its Affiliates.

 

          (b) Such a limited sublicense may be granted, in the case of a Contract Service Provider, to enable the Contract Service Provider to perform specific services in support of Licensee's or its Affiliate's distribution of Services or Research Products (e.g. testing, contract manufacturing, distribution), under a written contract with Licensee, at Licensee's expense, and pursuant to protocols or specifications developed by Licensee. Such a limited sublicense may include a license to make or use the Licensed Materials and Derivative Materials solely for the purpose of providing such services.

 

          (c) Such a limited sublicense may be granted, in the case of a Development Partner, to enable the Development Partner to collaboratively research, develop, manufacture, or perform other activities necessary for the commercialization of Services or Research Products with Licensee, pursuant to a collaborative agreement. Such a limited sublicense may include a license to make or use the Licensed Materials, Derivative Materials, Services or Research Products, and to make, have made, use, sell, offer for sale, or import Services or Research Products, on behalf of the Development Partner or Licensee and its Affiliates. Additionally, Licensee may grant such limited sublicense rights to up to two Development Partners at any one moment in time, approved in writing by WARF, which approval shall not be unreasonably withheld, who will also be entitled to market and sell to third party customers, in conjunction with marketing and sales efforts of Licensee and its Affiliates, Research Products or Services that were developed under the partnership defined by this Section 2B(i)(c); and Licensee shall pay to WARF the four percent (4%) royalty as set forth in Section 4B on any such sales by said Development Partners.

  

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          (d) In each case specified above for a limited sublicense, the Collaborator, Contract Services Provider, or Development Partner under such sublicense may be referred to herein as a "Sublicensee."

 

       (ii) Unless otherwise agreed to in writing by WARF, any limited sublicense agreement entered into as allowed under this Section 2B shall terminate upon the termination of this Agreement, and each limited sublicense shall so state. Licensee shall require that its limited sublicensee(s) comply with all relevant requirements of this Agreement and the related Agreement (including without limitation restrictions on the right to use and transfer Licensed Materials) and Licensee shall have the same responsibility for the activities of any limited sublicensee as if the activities were directly those of Licensee. Licensee shall provide to WARF, in confidence, a summary of any sublicense agreement with a Collaborator, Development Partner or a Contract Service Provider, under this Section 2B within thirty (30) days after execution of such limited sublicense agreement.

 

       (iii) If Licensee receives any fees, minimum royalties in excess of the earned royalties, or other payments in consideration for any rights granted under a limited sublicense under this Agreement to a Collaborator, Development Partner or Contract Service Provider, then Licensee shall pay WARF twenty percent

 

       (20%) of such payments as a "Sublicensing Fee," in the manner specified in Section 4F, provided however, said Sublicensing Fee obligation is not applicable to (i) any payments based directly upon the amount or value of Services or Research Products sold by the sublicense (earned royalty payments), (ii) any equity investment made at or below fair market value by the sublicensee in Licensee or its Affiliates, or (iii) any payments done for work to be performed by Licensee or its Affiliates.

 

    C. Restrictions and Limitations.

 

    Licensee acknowledges and agrees that the licenses granted under this Agreement do not provide any right or license to: (i) grant any sublicenses under this Agreement to any third parties except as provided for in Section 2B; (ii) make, have made, use, sell, offer for sale, import or otherwise transfer Therapeutic Products (other than therapeutic molecules as described in Section 4E) or Diagnostic Products incorporating the Licensed Materials or ■ cellular derivatives of the Licensed Materials; or (iii) use the inventions of the Licensed Patents, Licensed Materials £ or any Derivative Materials in the manufacture or distribution of Research Products in fields outside of the Licensed Field for any commercial purpose or in human clinical trials.

 

    D. License to WARF.

 

    Licensee hereby grants to WARF a nonexclusive, royalty-free, irrevocable, paid-up license, with the right to grant sublicenses only to the University of Wisconsin, the WiCell Research Institute and the Morgridge Institute for Research, to practice and use Developments only for Non-Commercial Research Purposes. Any such sublicensees shall be obligated to comply with the foregoing limitations and will not be entitled to grant further sub-sublicenses. The Developments shall be Licensee's Confidential Information and governed by Section 13.

 

Section 3. Reporting.

  

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    A. Licensee shall develop, manufacture, market and sell Research Products and Services in the Licensed Field throughout the term of this Agreement. Such activities shall include, without limitation, those activities listed in the Development Plan attached hereto as Appendix C, subject to updates and modifications to be made from time to time in accordance with the requirements of this Agreement by Licensee. Licensee agrees that said Development Plan is reasonable and that Licensee shall take all reasonable steps to pursue the development program as set forth therein.

 

    B. By July 31, 2009 and annually thereafter during the term of this Agreement, Licensee shall provide to WARF an annual written Development Report summarizing Licensee's development activities since the last Development Report, together with any modifications made by Licensee to its Development Plan. WARF reserves the right to audit Licensee's records relating to the development activities licensed hereunder. Such record keeping and audit procedures shall be subject to the procedures and restrictions set forth in Section 6 for auditing the financial records of Licensee.

 

C. Licensee acknowledges that the failure to timely provide the annual Development Report, or the providing of false information to     WARF regarding Licensee's development activities hereunder, shall be a material breach of the terms of this Agreement, subject to the right to cure under Section 7.

 

    D. All information furnished to WARF pursuant to this Section 3 shall be Licensee's Confidential Information and governed by Section 13.

 

Section 4. Consideration.

 

    A.       License Fee.

 

       (i)       Licensee agrees to pay to WARF a license fee of two hundred twenty-five thousand dollars ($225,000) payable in installments as follows:

 

  

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        Installment Amount

       Due Date

 

          (a) $28,125                                            30 days after Effective Date

      (b) $28,125                                            the earlier of (i) first anniversary of Effective Date, or (ii) Licensee's receipt of $ 10 million equity funding

          (c) $56,250                                            second anniversary of Effective Date

          (d) $56,250                                            third anniversary of Effective Date

          (e) $56,250                                             fourth anniversary of Effective Date

 

       (ii) If this Agreement is terminated before the fourth anniversary of the Effective Date, any remaining installments of the license fee shall become due and shall be paid within thirty (30) days after such termination.

 

    B. Royalty.

 

       (i) In addition to the Section 4A license fee, Licensee agrees to pay to WARF as "earned royalties" a royalty calculated as a percentage of the Selling Price of Research Products in accordance with the terms and conditions of this Agreement. The royalty is deemed earned as of thirty (30) days after the date Licensee invoices the customer for the Selling Price. The royalty shall remain fixed while this Agreement is in effect at a rate of four percent (4%) of the Selling Price of Research Products.

 

       (ii) Licensee also agrees to pay to WARF as "earned royalties" a royalty calculated as a percentage of the Selling Price of Services in accordance with the terms and conditions of this Agreement. The royalty is deemed earned as of thirty (30) days after the date Licensee invoices the customer for the Selling Price. The royalty shall remain fixed while this Agreement is in effect at a rate of four percent (4 %) of the Selling Price of Services.

 

       (iii) If Licensee is required to make payments to an unaffiliated third party for a license or similar right to such third party's patents, in the absence of which right or license Licensee could not legally make, use or sell Research Products or Services, then the royalty payable under this Section 4B shall be reduced by one half of royalties payable to such third parties on that Research Product or Service; provided, however, that the adjusted royalty rate to WARF will be no less than fifty percent (50%) of the applicable royalty rate payable to WARF under this Agreement for such Research Products or Services.

 

       (iv) In the event that the sale, lease, or other transfer by Licensee of Research Products or Services under this Agreement also requires payment to WARF of royalties under any other agreement between WARF and Licensee, the cumulative earned royalties owed to WARF for that Research Product or Service under all such agreements shall not exceed the single highest royalty as set forth in those agreements. Licensee shall pay to WARF royalties under all such agreements individually and on a pro rata basis.

  

-5-

  

 

       (For example, if Licensee owes to WARF a two percent (2%) earned royalty under this Agreement and a three percent (3%) earned royalty under a separate agreement, the cumulative royalties owed to WARF shall be there percent (3%), but shall be paid proportionately under each agreement in payments of 2/5 of three percent (3%) under this Agreement and 3/5 of three percent (3%) on the other.)

 

       (v) For avoidance of doubt, with respect to payment of earned royalties by Licensee:

 

          (a)      If Licensee renders Services to a customer applicable to such customer's own molecules, Licensee will pay royalties on the Selling Price of Services invoiced for the sale of the Services, but Licensee shall not owe royalties for any sales by the customer of such customer's molecules by reason of such Services.

 

          (b) If Licensee sells Research Products to a customer, and the customer uses the Research Product in connection with the customer owned molecules, Licensee will pay royalties on Selling Price of Research Products invoiced for the sale of the Research Product, but Licensee shall not owe royalties for any sales by the customer of such customer's molecules by reason of such use of such Research Product.

 

    C. Minimum Royalty.

 

    Licensee further agrees to pay to WARF a minimum royalty of twenty thousand dollars ($20,000) per calendar year during which this Agreement is in effect, starting in calendar year 2009, against which any earned royalty paid for the same calendar year will be credited. The minimum royalty for a given year shall be due at the time payments are due for the calendar quarter ending on December 31. It is understood that the minimum royalties will apply on a calendar year basis, and that sales of Research Products or Services requiring the payment of earned royalties made during a prior or subsequent calendar year shall have no effect on the annual nrinimum royalty due WARF for any other given calendar year. If this Agreement is terminated early, the minimum amount will be prorated for that final year.

 

    D. Patent Administration Fee. Licensee agrees to pay WARF a patent administration fee as follows: $5,000 on the second anniversary of the Effective Date; and $5,000 on the third anniversary of the Effective Date.

 

    E. If Licensee, its Affiliates, or sublicensees identify or discover a therapeutic molecule as a result of the use of rights granted under this Agreement, and such molecule is proprietary to Licensee, Affiliates or sublicensees, then Licensee will pay to WARF milestone fees as follows in accordance with Section 4F:

       (i) For each such molecule for which Licensee, its Affiliates or applicable sublicensee initiates a Phase 2 (or equivalent) clinical study: seventy-five thousand dollars ($75,000).

 

       (ii) For each such molecule for which Licensee, its Affiliates, or applicable sublicensee receives governmental regulatory approval to market the molecule: two hundred fifty thousand dollars ($250,000).

 

       (iii) No royalties shall be owed for sales of any such therapeutic molecule.

  

-6-

  

 

    F. Accounting; Payments.

 

       (i) Amounts owing to WARF under Section 4B of this Agreement shall be paid on a quarterly basis, with such amounts due and received by WARF on or before the thirtieth (30th) day following the end of the calendar quarter ending on March 31, June 30, September 30 or December 31 in which such amounts were earned. The balance of any amounts which remain unpaid more than thirty (30) days after they are due to WARF shall accrue interest until paid at the rate of the lesser of one percent (1%) per month or the maximum amount allowed under applicable law. However, in no event shall this interest provision be construed as a grant of permission for any payment delays.

 

       (ii) Except as otherwise directed, all amounts owing to WARF under this Agreement shall be paid in U.S. dollars. All royalties owing with respect to net Selling Prices stated in currencies other than U.S. dollars shall be converted at the rate shown in the Federal Reserve Noon Valuation - Value of Foreign Currencies on the day preceding the payment. WARF is exempt from paying income taxes under U.S. law. Therefore, all payments due under this Agreement shall be made without deduction for taxes, assessments, or other charges of any kind which may be imposed on WARF by any government outside of the United States or any political subdivision of such government with respect to any amounts payable to WARF pursuant to this Agreement. All such taxes, assessments, or other charges shall be assumed by Licensee.

 

       Vistagen License 09-0092

 

       (iii) A full accounting showing how any amounts owing to WARF under Section 4B have been calculated shall be submitted to WARF on the date of each such payment. Such accounting shall be on a per-country and Service or Research Product line, model or tradename basis (as applicable) and shall be summarized on the form shown in Appendix C of this Agreement. In the event no payment is owed to WARF, a written statement setting forth that fact shall be supplied to WARF.

 

Section 5.       Certain Warranties.

 

    A. Except as provided under Section 14 of this Agreement with respect to U.S. Government interests, WARF warrants that it has the right to grant the licenses granted to Licensee in this Agreement. Nothing in this Agreement shall, however, be construed as: (i) a warranty or representation by WARF or Licensee as to the validity or scope of any of the Licensed Patents; (ii) a warranty or representation that anything made, used or transferred under the license granted in this Agreement will or will not infringe patents of third parties; (iii) an obligation to furnish any assistance, or know-how not provided in the Licensed Patents or any materials or services other than those specified in this Agreement; or (iv) an obligation to file any patent application or secure or maintain any patent right.

 

    B. WARF MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO THE MERCHANTIBILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR THE NON­INFRINGEMENT OR USE OF ANY PRODUCT OR SERVICE UNDER THIS AGREEMENT.

  

-7-

  

 

    C. TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT SHALL WARF, WICELL, OR THEIR RESPECTIVE TRUSTEES, DIRECTORS, OFFICERS AND EMPLOYEES (INCLUDING WITHOUT LFMITATION ANY INVENTORS OF THE LICENSED PATENTS) BE LIABLE FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

 

    D. If any one of the following U.S. Patent Nos., or its corresponding foreign patent (the "Base Licensed Patents"): US 7,029,913, US 6,200,806, US 5,843,780 are ultimately abandoned or held by a court of competent jurisdiction to be invalid or unenforceable for a particular territory after the exhaustion of all available appeal periods, WARF and Licensee shall in good faith negotiate an equitable reduction in the earned royalty payment obligations of Licensee under this Agreement in the applicable territory. If all three Base Licensed Patents are ultimately abandoned or held by a court of competent jurisdiction to be invalid or unenforceable in a particular territory, after the exhaustion of all available appeal periods, then no further earned royalty payments by Licensee shall be owed or payable under this Agreement for said territory.

 

    E. If applicable, to the extent required by the Bayh-Dole Act, (35 U.S.C. § 204 and applicable Regulations 37 C.F.R.), Licensee shall manufacture substantially in the United States Licensed Products for sale in the United States.

 

Section 6. Recordkeeping.

 

    A. Licensee shall keep books and records sufficient to verify the accuracy and completeness of Licensee's accounting referred to above, including without limitation inventory, purchase and invoice records relating to any Services and/or Research Productssold under this Agreement. In addition, Licensee shall keep books and records sufficient to reasonably verify the accuracy and completeness of Licensee's reports. Such documentation may include, but is not limited to, invoices for studies, laboratory notebooks, internal job cost records, and filings made to the Internal Revenue Department to obtain tax credit, if available, for research and development. All such books and records shall be preserved for a period not less than six (6) years after they are created during the term of this Agreement.

 

    B. Licensee shall take all steps reasonably necessary so that WARF may, within thirty (30) days of its request, review Licensee's books and records to allow WARF to verify the accuracy of Licensee's Development Reports and the payments made to WARF. Such review will be performed no more than once every 12 months and by an attorney or registered CPA and scientific expert, designated by WARF, professionally qualified, under confidentiality agreement, and mutually agreeable to Licensee (which agreement shall not be unreasonably withheld), at WARF's expense, upon reasonable notice and during regular business hours.

  

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    C. If a royalty payment deficiency is determined, a report thereof will be presented to Licensee's auditors for review and confirmation; and if there is any disagreement about the alleged reported deficiency, the parties shall endeavor to resolve such disagreement using a mutually approved expert. Licensee shall pay the finally determined royalty deficiency outstanding within thirty (30) days of receiving written notice thereof, plus interest on outstanding amounts as described in Section 4F(i). If a royalty payment deficiency for a calendar year exceeds the lesser of twenty five percent (25%) of the royalties paid for that year or $50,000, then Licensee shall be responsible for paying WARF's reasonable, verifiable out-of-pocket expenses incurred with respect to such review, but in no case more than the amount of the deficiency as finally determined.

 

Section 7.       Term and Termination.

 

    A. The term of this license shall begin on the Effective Date and continue until the expiration of the last to expire Licensed Patents, unless otherwise earlier terminated as provided herein.

 

    B. Licensee may terminate this Agreement at any time by giving at least sixty (60) days written and unambiguous notice of such termination to WARF.

 

    C. If Licensee at any time defaults in the timely payment of any monies due to WARF, or the timely submission to WARF of any report, or commits any breach of any other covenant herein contained, and Licensee fails to remedy any such breach or default within ninety (90) days after written notice thereof by WARF, or if Licensee commits any act of bankruptcy, becomes insolvent, is unable to pay its debts as they become due, files a petition under any bankruptcy or insolvency act, or has any such petition filed against it which is not dismissed within sixty (60) days, or offers any component of the Licensed Patents or Licensed Materials to its creditors, WARF may, at its option, terminate this Agreement by giving notice of termination to Licensee.

 

    D. Upon termination of this Agreement, the licenses granted herein shall immediately terminate. In the event of termination under Section 7B or 7C above, Licensee shall have sixty (60) days to cease all activities involving the use of the Licensed Materials and any Derivative Materials for any purpose, and shall destroy all Licensed Materials and Derivative Materials in its possession. Licensee shall remain obligated to pay any fees prorated as of the date of termination by the number of days elapsed in the applicable calendar year.

 

    E. The Parties agree that Sections 7, 11,12, 13 and Appendix A shall survive any termination of this Agreement.

 

    F. Licensee acknowledges and agrees that damages may not be an adequate remedy in the event of a breach of this Agreement by Licensee. Licensee therefore agrees that WARF shall be entitled to seek immediate and permanent injunctive relief from a court of competent jurisdiction in addition to any other rights or remedies otherwise available to WARF.

 

Section 8.       Assignability; Change of Control.

 

Licensee may not assign or transfer this Agreement, nor any of the rights granted herein, except pursuant to a Change of Control Event, without the prior written consent of WARF. Licensee shall notify WARF in writing promptly in the event of any Change of Control Event and, with respect to a transfer to or merger with any non-Affiliate that does not have a license from WARF to the Base Licensed Patents having equal to or greater than 500 employees, pay to WARF a fee of $300,000 to allow the transfer of the license granted herein to that non-Affiliate to whom control has been transferred.

 

Vistagen License 09-0092

 

Section 9,       Contest of Validity.

 

In the event Licensee contests the validity of any Licensed Patent, Licensee shall continue to pay all amounts owed under this Agreement with respect to that patent as if such contest were not underway until the patent is adjudicated invalid or unenforceable by a court of last resort.

 

Section 10. Enforcement.

 

WARF intends to protect the Licensed Patents against infringers, or otherwise act to eliminate infringement when, in WARF's sole judgment and discretion, such action may be reasonably necessary, proper and. justified. In the event that Licensee believes there is infringement of any Licensed Patents related to the Research Products or the Services, Licensee shall provide WARF with notification and reasonable evidence of such infringement. If m WARF takes action to remedy the infringement, Licensee agrees to provide reasonable assistance to WARF as 41 requested by WARF and at WARF's expense. If WARF does not take action to remedy said infringement within six (6) months or takes action but fails to diligently continue such effort, and Licensee establishes by reasonable evidence that the infringing party is creating a financial business disadvantage for Licensee, Licensee and WARF shall in good faith negotiate a temporary reduction the royalty payment amounts owing to WARF by an equitable amount according to the business disadvantage caused by the infringement, which reduction shall be temporary until such infringement is abated.

 

Section 11.      mdemnification and Insurance.

 

    A. Licensee shall, at all times during the term of this Agreement and thereafter, indemnify, defend and hold WARF, WiCellTM Research Institute ("WiCell"), the University of Wisconsin (the "University"), and their respective trustees, directors, officers, shareholders and employees (including without limitation any inventors of the Licensed Patents) (each, an "Indemnitee") harmless against all liabilities, demands, damages, settlements, suits, claims, proceedings, costs and expenses, including legal expenses and reasonable attorneys fees, arising from the rights granted to Licensee under this Agreement and arising out of or relating to the death of or injury to any person or persons or any damage to property, due to the use of the Licensed Materials or any Derivative Materials or Developments or the provision of Services. WARF at all times reserves the right to select and retain counsel of its own to defend WARF's interests in any such proceeding.

 

    B. Licensee warrants that it now maintains and will continue to maintain liability insurance coverage reasonably appropriate to the risk involved in using the Licensed Materials and any Derivative Materials under this Agreement, and that such insurance coverage is sufficient to cover WARF and the inventors of the Licensed Patents and Licensed Materials as additional insureds. Within ninety (90) days after the execution of this Agreement and thereafter annually between January 1 and January 31 of each year, Licensee will present evidence to WARF that such coverage is being maintained. In addition, Licensee shall provide WARF with notice of any change in or cancellation of the insurance coverage.

 

Section 12.      Use of Names; Press Release.

  

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    A. Neither Party shall use the other's name, the name of any inventor of the Licensed Patents, or the name of VistaGen, its Affiliates, WARF, WiCellTM or the University in any other form of publicity without the prior written approval, which shall not be unreasonably withheld, of the entity or person whose name is being used, except where a disclosure is required by any applicable law or the rules of any securities exchange.

 

    B. Notwithstanding the foregoing, the Parties will make a joint press release regarding the execution of this Agreement, the final form of which will be subject to approval of the Parties prior to its release to the public. For subsequent press releases and other written public disclosures relating to this Agreement or the Parties' relationship hereunder (each, a "Proposed Disclosure"), each Party will use reasonable efforts to submit to the other Party a draft of such Proposed Disclosure for review and comment by the other Party at least five (5) business days prior to the date on which such party plans to release such Proposed Disclosure. The Parties shall review and consider in good faith any comments provided in response and no Proposed Disclosure shall be released without the written consent of both Parties

 

    C. If a Party is unable to comply with the foregoing five (5) business days notice requirement because of a legal obligation or stock exchange requirement to make more rapid disclosure, such Party will not be in breach of this Agreement but will in that case give telephone notice to a senior executive of the other Party and provide a draft disclosure with as much notice as is reasonably feasible prior to the release of such Proposed Disclosure.

 

    D. Notwithstanding anything to the contrary in this Agreement, each Party shall have the right to disclose the fact of the existence of this Agreement, and that this Agreement involves the Licensed Patents and the Licensed Field.

 

Section 13. Confidentiality.

 

Both Parties agree to keep any information identified as confidential ("Confidential Information") by the disclosing Party, confidential using methods at least as stringent as each Party uses to protect its own confidential information, and to not use such Confidential Information for any purposes other than in accordance with the terms of this Agreement. Confidential Information shall include, without limitation, any information provided to WARF under Sections 3, 4, and 6. The confidentiality and use obligations set forth above apply to all or any part of information disclosed hereunder except to the extent that:

 

       (i) Licensee or WARF can show by written record that they possessed the information prior to its receipt from the other party;

 

       (ii) the information was already available to the public or became so through no fault

of Licensee or WARF;

 

       (iii) the information is subsequently disclosed to Licensee or WARF by a third party that has the right to disclose it free of any obligations of confidentiality; or

 

       (iv) five (5) years have elapsed from the expiration of this Agreement.

Licensee acknowledges and agrees that nothing contained in this Section 13 shall be construed to limit or preclude WARF from negotiating or entering into any agreements with third parties under terms and conditions similar to that set forth in this Agreement.

  

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Section 14.      United States Government Interests.

 

It is understood that if the United States Government (through any of its agencies or otherwise) has funded research, during the course of or under which any of the inventions of the Licensed Patents were conceived or made, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. § 200-212 and applicable regulations of Chapter 37 of the Code of Federal Regulations, to a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the inventions of the Licensed Patents for governmental purposes. Any license granted to Licensee in this Agreement shall be subject to such right, to the extent such right is legally applicable.

 

Section 15.      Patent Marking.

 

Licensee shall mark all Service Agreements, Research Products or Research Product packaging with the appropriate patent number reference in compliance with the requirements of U.S. law, 35 U.S.C. § 287.

 

Section 16. Miscellaneous.

 

    A. This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of Wisconsin, without reference to its conflicts of laws principles.

 

    B. The parties hereto are independent contractors and not joint venturers or partners.

 

    C. If the enforcement of any provisions of this Agreement are or shall come into conflict with the laws or regulations of any jurisdiction or any governmental entity having jurisdiction over the Parties or this Agreement, those provisions shall be deemed automatically deleted, upon written notification to the other Party, if such deletion is allowed by relevant law, and the remaining terms and conditions of this Agreement shall remain in full force and effect. If such a deletion is not so allowed or if such a deletion leaves terms thereby made clearly illogical or inappropriate in effect, the Parties agree to substitute new terms as similar in effect to the present terms of this Agreement as may be allowed under the applicable laws and regulations.

 

    D. WARF and Licensee have each been represented by counsel who participated in the preparation of this Agreement. This Agreement reflects a negotiated compromise between the Parties. Neither Party shall be considered to be the drafter of this Agreement or any of its provisions for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed against the drafter of this Agreement. The Section headings contained in this Agreement are for reference purposes only

W m and shall not in any way affect the meaning or interpretation of this Agreement.

 

    E. This Agreement is not intended to be for the benefit of and shall not be enforceable by any third party. Nothing in this Agreement, express or implied, is intended to or shall confer on any third party any rights (including third-party beneficiary rights), remedies, obligations or liabilities under or by reason of this Agreement. This Agreement shall not provide third parties with any remedy, claim, reimbursement, cause of action or other right in excess of those existing without reference to the terms of this Agreement. No third party shall have any right, independent of any right that exists irrespective of this Agreement, to bring any suit at law or equity for any matter governed by or subject to the provisions of this Agreement.

  

-11-

  

 

Section 17. Notices.

 

Any notice required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given at the earlier of the time when actually received as a consequence of any effective method of delivery, including but not limited to hand delivery, transmission by telecopier, or delivery by a professional courier service or the time when received if sent by certified or registered mail addressed to the party for whom intended at the address below or at such changed address as the party shall have specified by written notice, provided that any notice of change of address shall be effective only upon actual receipt.

 

    (a)      WARF Research Institute, Inc. Attn: Director of Licensing 614 Walnut Street Madison, Wisconsin 53726

 

    (b)  VistaGen Therapeutics, Inc. Attn: Chief Executive Officer 384 Oyster Point Blvd. #8 South San Francisco, CA 94080

 

    (c)  with a copy to VistaGen's legal counsel: Knox Bell

 

DLA Piper US LLP

4365 Executive Drive, Suite 1100

San Diego, CA 92121-2133

 

Section 18. Integration.

 

This Agreement constitutes the full understanding between the Parties with reference to the subject matter hereof, and no statements or agreements by or between the Parties, whether orally or in writing, except as provided for elsewhere in this Section 18, made prior to or at the signing hereof, shall vary or modify the written terms of this Agreement. Neither Party shall claim any amendment, modification, or release from any provisions of this Agreement by mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is in writing, signed by the other Party, and specifically states that it is an amendment to this Agreement.

  

-12-

  

Section 18. Authority.

 

The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Agreement on behalf of the Party for whom they have signed.

 

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the dates indicated

 

below.

 

WISCONSIN ALUMNI RESEARCH FOUNDATION

 

Page 11 of 23

 

Vistagen License 09-0092

Craig jfChfistianson, Director of Licensing

 

  

-13-

  

 

    A. "Affiliate" and "Affiliates" shall refer to and mean any entity controlled by or under common control of Licensee. As used herein, "control" shall refer to and mean ownership of greater than fifty percent (>50%) or more of the outstanding voting equity of an entity.

 

    B. "Change of Control Event" is defined as: (i) the sale or disposition of all or substantially all the assets of the Company or its direct or indirect parent corporation; (ii) the reorganization, merger, consolidation, or similar transaction involving the Company or its direct or indirect parent corporation which results in the voting securities of such entity outstanding immediately prior to that transaction ceasing to represent at least 50% of the combined voting power of the surviving entity immediately after such transaction; (iii) the acquisition in one or more transactions by any "person", as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), together with any of such person's "affiliates" or "associates", as such ^ terms are used in the Exchange Act, of 40% or more of the outstanding shares of the voting capital stock of the Company or its direct or indirect parent corporation (excluding any employee benefit plan or related trust sponsored or maintained by that entity)[; or (iv) the individuals who are the directors of the Company or its direct or indirect parent corporation as of the effective date of this Agreement ("Incumbent Directors") ceasing for any reason to constitute at least fifty percent (50%) of the board of directors of that entity; provided, however, that if any new director is approved by a vote of at least fifty percent (50%) of the Incumbent Directors, such new director shall be considered an Incumbent Director.

 

    C. "Collaborator" shall mean a person working in a commercial role or a commercial organization with which Licensee enters into a written agreement for a specific project to be managed or coordinated by Licensee involving research and/or development for Research Products or Services.

 

    D. "Contract Service Provider" shall mean a third party person or organization with which Licensee enters into a written contract for the third party to furnish specific services (e.g., testing, contract manufacturing, distribution, etc.) to Licensee in support of Licensee's sale or distribution of Research Products or Services.

 

    E. "Derivative Materials" shall refer to and mean any compositions or materials derived from the use of the Licensed Materials, or produced by the use of the Licensed Materials, or which incorporate wholly or partially the Licensed Materials, including without limitation, fully or partially differentiated cells or cell lines derived from the Licensed Materials.

 

    F. "Development" and "Developments" shall mean Derivative Materials, and any patentable inventions that are conceived, reduced to practice, or developed through the use of the inventions of the Licensed Patents, Licensed Materials or Derivative Materials. For avoidance of doubt, Derivative Materials and Developments do not include any molecules of Licensee or its Affiliates, Sublicensees, or customers which are not covered by the Licensed Patents.

 

    G. "Development Partner" shall mean a person or organization with which Licensee enters into a specific written collaborative agreement for research and development, manufacturing, marketing, or other activities necessary for the commercialization of Research Products or Services.

 

    H. "Development Report" shall mean the written report provided under Section 3 describing each Development to be patented or commercialized by Licensee.

  

-14-

  

 

    I.       "Diagnostic Products" shall refer to and mean products or services that (i) are used in the diagnosis,

 

prognosis, screening or detection of disease in humans, and (ii) which employ, or are in any way produced or

manufactured by, or discovered, identified, developed or otherwise arise out of any research involving, the practice

or use of the inventions of the Licensed Patents, or that would otherwise constitute infringement of any claims of

the Licensed Patents.

 

    J. "Internal Research" shall refer to and mean research conducted internally by Licensee, or its Affiliates at Licensee's or Affiliate's facilities.

 

    K. "Licensed Field" shall be limited to the fields of (a) Research Products sold solely for an end-user's internal research purposes, and (b) Services rendered by Licensee and its Affiliates, and Services rendered by Development Partners as permitted by Section 2B(i)(c).

 

    L. "Licensed Materials" means primate (including human) embryonic stem cells covered by the valid claims in the Licensed Patents and which meet the following conditions:

 

       (i) For embryonic stem cells created prior to April 26, 2005, the embryonic stem cell must be either: (1) listed on the NIH Human Embryonic Stem Cell Registry at http://escr.nih.gov; or (2) derived from excess embryos created for the purpose' of in vitro fertilization with appropriate consent of the donor couple and not for the purpose of creating embryonic stem cells; or (3) derived from embryos created specifically for research purposes either by in vitro fertilization or by somatic cell nuclear transfer, for which the following additional conditions apply: (a) the embryo0may not have been maintained in vitro for more than 14 days; (b) the gamete donor(s) and somaticcell donor (if any) made the donation without payment beyond reimbursement for reasonable expenses associated with donation; (c) in the case of egg donation, the donor was fully informed of the risks to herself; (d) the gamete donor(s) and somatic cell donor (if any) were fully informed of the purposes to which their donated materials would be put; (e) the research could not be done equally weU using surplus IVF embryos originally created for reproductive purposes; (f) the research protocol, including gamete collection, somatic cell collection, embryo management and stem cell derivation is approved by an appropriate Institutional Review Board; and (g) protections are in place to prevent misappropriation of embryos created specifically for research.

 

       (ii) For embryonic stem cells created from embryos created after April 26, 2005, the embryonic stem cells must be derived from embryos and under conditions in compliance with the "Guidelines for Human Embryonic Stem Cell Research" established by the National Research Council Institute of Medicine of the National Academies (the "NAS Guidelines").

 

       (iii) For embryonic stem cells created after April 26, 2005 from embryos generated prior to April 26, 2005, and which do not meet the NAS Guidelines, the embryonic stem cells must meet one of the conditions set forth in paragraph (i) above and be created using protocols substantially in compliance with the requirements of the NAS Guidelines.

  

-15-

  

 

    M. "Licensed Patents" shall refer to and mean those patents and patent applications listed on Appendix B attached hereto, all foreign equivalents and any subsequent patent application owned by or licensed to WARF, but only to the extent it claims priority to an invention claimed in a patent application or patent listed on Appendix B Said pendmg patent applications shall cease to be included in this definition if and when the application is abandoned or a non-appealable rejection of all included claims issues.

 

    N- "Non-Commercial Research Purposes" shall mean the use for internal academic research purposes or other internal not-for-profit or scholarly purposes not involving any: (1) performance of services for a commercial entity or (2) production or manufacture of products for sale to third parties; or (3) research wherein a sponsor receives a right, whether actual or contmgent, to use the results of th research for purposes other than non-commercial research purposes.

 

    O. "Research Products" shall refer to and mean products that: (i) are used as research tools, including in drug discovery and development, and (ii) employ, or are in any way produced or manufactured by, or discovered identified, developed or otherwise arise out of any research involving, the practice of the Licensed Patents or (iii) are covered by the Licensed Patents.

 

    R "Selling Price of Research Products" shall mean the selling price invoiced by Licensee or its Affiliates for the sale of Research Products, net of any rebates, discounts, credits, allowances, chargebacks, and returns actually given to the customer, and net of any taxes, tariffs, duties, and transportation costs actually included in said invoice, and net of any debts uncollectable despie Licensee's commercially reasonable collection efforts.

 

    Q- "Selling Price of Services" shall mean the selling price invoiced by Licensee or its Affiliates for rendering Services, net of the actual costs incurred to render said Services, and net of any rebates, discounts, credits, allowances, and chargebacks actually given to the customer, and net any debts uncollectable despite Licensee's commercially reasonable collection efforts.

 

    R. "Services" shall refer to and mean any service (i) using the Licensed Materials, Derivative Materials, or the inventions claimed in the Licensed Patents, or (ii) that employ or. are in any way provided by the practice of an invention claimed in the Licensed Patents or that would otherwise constitute infringement of any claims of the Licensed Patents.

 

    S.   "Sublicensee" is defined in Section 2B(i)(d).

 

    T-   "Therapeutic Products" shall refer to and mean products or services that (i) are used in the treatment of disease p m in humans, and (ii) which employ, or are in any way produced or manufactured by, or discovered, identified, developed or otherwise arise out of any research involving, the practice or use of the inventions of the Licensed Patents, or (hi) that would constitute infringement of any claims of the Licensed Patents.

  

-16-

  

 

LICENSED PATENTS

 

	

Category

	 	

Title

	

Lead Inventor

	 	

WARF Reference Number(s)

	 	

Countries

	 	

U.S. Publications

	 	 	

Issued Patents (U.S.)

	 
	
ease

	 	
Primate Embryonic Stem Cells

	
James A. Thomson

	 	
P02115; P05206; P06228; P96014; P98222

	 	
US; EP; CA; WO

	 	 	2005-0164381	 	 	 	7,029,913 5,843,780 6,200,806	 
	 	1	 	
Serum-Free Cultivation of Primate ES Cells

	
James A. Thomson

	 	 	P03122; P07322; P99275	 	
US; AU; BR; CA; CN; EP; HK; IL; IN; IS; JP; KR; MX; NO; NZ; SG

	 	 	2003-0190748	 	 	 	7,217,569 7,005,252	 
	 	1	 	
Master Human Stem Cell Lines for Gene Expression and Knockdown

	
Su-Chun Zhang

	 	 	P07393	 	
US

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	
Intermediate Differentiation

	 	
Methods Of Making Differentiated Cells From Primate Embryonic Stem Cells

	
James A. Thomson

	 	 	P08333	 	
US

	 	 	 	 	 	 	 	 
	 	 	 	
Differentiation of Stem Cells to Endoderm and Pancreatic Lineage

	
Jon Odorico

	 	 	P04361; P06310	 	
US

	 	 	2005-0260749 2007-0259423	 	 	 	 	 
	 	 	 	
Hematopoietic Differentiation of hESCs

	
Dan S. Kaufman

	 	 	P00032; P02058; P07426	 	
AU; BR; CA; CN; EP; IL; IN; IS; JP; KR; LU;

MX; NO; NZ;

SE; SG; US; WO

	 	 	 	 	 	 	6,280,718 6,613,568	 
	 	 	 	
Method of In Vitro Differentiation of Transplantable Neural Precursor Cells From Primate ES Cells

	
Su-Chun Zhang

	 	 	P01258	 	
US

	 	 	 	 	 	 	6,887,706	 
	 	 	 	
Endothelial Cells Derived from Primate ES Cells

	
DanS. Kaufman

	 	 	P02004	 	
AU; CA; CN; EP; HK; IL; IN; IS; JP; KR; LU;

MX; NZ; SE; SG; US

	 	 	2003-0166273	 	 	 	7,176,023	 
	 	 	 	
Method of Making Embryoid Bodies from Primate ES Cells

	
James A. Thomson

	 	 	P03410; P99276	 	
US; AU; BR; CA; CN; EP; HK; IL; IN; IS; JP; KR; MX; NO; NZ; SG

	 	 	2004-0023376	 	 	 	7,220,584 6,602,711	 
	 	 	 	
Method of Forming Mesenchymal Stem Cells from ES Cells

	
J. Wesley Pike

	 	 	P04247	 	
AU; CA; EP; GB; IL; JP; KR; SG; US

	 	 	2006-0008902	 	 	 	 	 
	 	 	 	
Directed Differentiation of hESCs into Mesenchymal/Stromal Cells

	
Peiman Hematti

	 	 	P06324	 	
US

	 	 	 	 	 	 	 	 
	 	 	 	
In Vitro Differentiation of Hematopoietic Cells from Non-Human Primate and Human ES Cells

	
Deepika Rajesh

	 	 	P06420	 	
US; WO

	 	 	 	 	 	 	 	 
	 	 	 	
Generation of Clonal Mesenchymal Cells from hESCs in Serum-Free Conditions

	
Igor 1. Slukvin

	 	 	P07264	 	
US

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
Media/Growth

	 	
Cryopreservation of Pluripotent Stem Cells

	
Sean P. Palecek

	 	 	P03369	 	
US

	 	 	2005-0106554	 	 	 	 	 
	 	 	 	
Defined Surfaces Of Self-Assembled Monolayers And Stem Cells

	
Laura L. Kiessling

	 	 	P05364	 	
US

	 	 	2007-0207543	 	 	 	 	 
	 	 	 	
Method of Reducing Cell Differentiation

	
Sean P. Palecek

	 	 	P03370	 	
US

	 	 	2005-0106725	 	 	 	 	 
	 	 	 	
Improved Culture Of Stem Cells

	
Veit

Bergendahl

	 	 	P08168	 	
US; WO

	 	 	 	 	 	 	 	 
	 	 	 	
Physiological Culture Conditions for ES Cells

	
James A. Thomson

	 	 	P03274	 	
US

	 	 	2004-0224401	 	 	 	 	 
	 	 	 	
Feeder-Independent Extended Culture of ES Cells

	
Ren-He Xu

	 	 	W04001	 	
AU; CA; CN; EP; GB; IL; IN; IS; JP; KR; NZ;

SE; SG; US

	 	 	2006-0014279	 	 	 	 	 
	 	 	 	
Cultivation of Primate ES Cells

	
James A. Thomson

	 	 	W05007	 	
AU; CA; CN; EP; GB; IL; JP; KR; SG; US

	 	 	2005-0244962	 	 	 	 	 
	 	 	 	 	 	 

 

 

  

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Category

	 	

Title

	

Lead Inventor

	 	

WARF Reference Number(s)

	 	

Countries

	 	

U.S. Publications

	 	 	

Issued Patents (U.S.)

	 
	
Other

	 	
Directed Genetic Modifications of Human Stem Cells

	
Thomas P. Zwaka

	 	 	P02339; W08003	 	
AU; CA; EP; GB; IL; KR; SG; US

	 	 	2006-0128018	 	 	 	 
	 	 	
Method for Generating Primate Trophoblasts

	
Ren-He Xu

	 	 	W03002; W07001; W08002	 	
AU; CA; CN; EP; HK; IL; IN; IS; JP; KR; MX;

NZ; SG; US

	 	 	2007-0037280	 	 	 	7,148,062	 
	 	 
	
Terminal Differentiation

	 	
Method of In Vitro Differentiation of Neural Stem Cells, Motor Neurons, and Dopamine Neurons from Primate ES Cells

	
Su-Chun Zhang

	 	 	P04277	 	
US

	 	 	2005-0095706	 	 	 	 	 
	 	1	 	
Method of Forming Dendritic Cells from ES Cells

	
Igor 1. Slukvin

	 	 	P04434	 	
AU; EP; GB; IL; JP; KR; SE; SG; US

	 	 	2006-0275901	 	 	 	 	 
	 	1	 	
Differentiation of Pluripotent ES Cells

	
Thomas P. Zwaka

	 	 	P05101	 	
US

	 	 	2006-0223179	 	 	 	 	 
	 	 	 	
Method of Generating Myelinating Oligodendrocytes from ES Cells

	
Su-Chun Zhang

	 	 	P07394	 	
US

	 	 	 	 	 	 	 	 
	 	 	 	
A Method for Generating Keratinocytes and Keratinocyte Precursors from hESCs

	
Sean P. Palecek

	 	 	P07402	 	
US

	 	 	 	 	 	 	 	 

  

-18-

  

 

WARF ROYALTY REPORT

 

Licensee:                              

Inventor:                              

 

Period Covered: From:

 

Prepared By:

Approved By:

 

Agreement No:

WARF Ref. #: 

Through:                   

Date:                          

Date:

 

If license covers several major Service lines, please prepare a separate report for each line, and combine all Service lines into a summary report.

 

Report Type:    □ Single Service Line Report:_

□ Multiproduct Summary Report: Page 1 of                                                                                            Pages

□ Service Line Detail. Line:                                                           Tradename:                                   Page:

Report Currency:                                                                                                                □ U.S. Dollars    □ Other

  

-19-

  

The following royalty forecast is non-binding and for WARF's internal planning purposes only:

Royalty Forecast Under This Agreement: Next Quarter:Q2: Q3:

 

* On a separate page, please indicate the reasons for returns or other adjustments if significant.

Also note any unusual occurrences that affected royalty amounts during this period.

To assist WARF's forecasting, please comment on any significant expected trends in sales volume.

DEVELOPMENT REPORT

 

A. Date development plan initiated and time period covered by this report.

 

B. Development Report.

 

    1. Activities completed since last report including the object and parameters of the development, when initiated, when completed and the results.

 

    2. Activities currently under investigation, i.e., ongoing activities including object and parameters of such activities, when initiated, and projected date of completion.

 

C. Future Development Activities.

 

    1. Activities to be undertaken before next report including, but not limited to, the type and object of any studies conducted and their projected starting and completion dates.

 

    2. Estimated total development time remaining before a Service will be commercialized.

 

D. Changes to initial development plan.

 

    1. Reasons for change.

 

    2. Variables that may cause additional changes.

 

E. Items to be provided if applicable:

 

    1. Information relating to Service that has become publicly available, e.g., published articles, competing Services, patents, etc.

 

    2. Development work being performed by third parties other than Licensee to include name of third party, reasons for use of third party, planned future uses of third parties including reasons why and type of work.

 

    3. Update of competitive information trends in industry, government compliance (if applicable) and market plan.

 

PLEASE SEND DEVELOPMENT REPORTS TO:

 

WARF

  

-20-

  

 

Attn.: Contract Coordinator 614 Walnut Street P.O. Box 7365 Madison, WI 53707-7365

 

DEVELOPMENT PLAN

 

	
Phase

	 	 
	
( urdio-lnx services

	 	 
	
2 academic collaboration partners via sponsored research projects for cardio-tox development and validation of system with known test compounds

Collaboration for development of services and research product hardware, MEA system, electronic data acquisition, hardware validation and robustness development

	 	 
	
Start work with 1-2 industrial validation collaborators that will support the testing of the cardio-tox assay and provide known compounds and unknown/undisclosed test compounds

	 	 
	
Complete in vitro initial cardiac safety validation and finalize SOPs

	 
	
Commercialization with early industrial adopters of cardio-tox services

	 	 
	
2-3 corporate partners for small scale test runs, pilot projects and affirmation by independent validations

	 	 
	
Expansion of cardio-tox services possibly with development partners

	 	 
	
Estimated full scale commercial rollout - implementation of broader market penetration

Development of cardio-tox research products for sale to Big Pharma

	 	 
	
increase of commercial production of research products, improve internal cell storage, implement robotics, address independent accreditation where necessary

Partnership for development and marketing of research products with instrument manufacturer, SOP development

	 	 
	
Hepato-tox assays services

	 	 
	
Sponsored research with 1-2 academic collaborators on further developing the differentiation of hepatocytes

	 	 
	
Validation studies with primary tissue sources of hepatocytes for drug metabolism, toxicity and gene expression

	 	 
	
Validation with pharmaceutical industrial collaborator including blinded compound runs and SOP finalization

	 	 
	
Phase

	 	 
	
Commercialization with early adopters of hepato-tox services

	 
	
1-2 industrial validation collaborator(s) that will support the testing of the hepato-tox assays and provide known compounds and blinded test compounds

	 	 
	
Small scale commercial services geared toward possible expansion

	 	 
	
Expansion of hepato-tox services

	
Larger scale commercialization

KttH-iskt till cii hjj (iisimii\ mt\ict.s

Convert and expand the murine assays to human ES Cell-derived beta-islet cell in vitro drug discovery assays

Validate human ES Cell systems for normal human beta-islet cell biology

	
Engage in 1 or more industrial partnerships to run drug discovery as a service for these partners

	 	 

 

WARF Agreement No.                                                      

WISCONSIN MATERIALS ADDENDUM

  

-21-

  

This Addendum is made effective the                                                                                  day of               ,           , by and between Wisconsin

Alumni Research Foundation (hereinafter called "WARF"), a nonprofit Wisconsin corporation, and

. (hereinafter called "Licensee"), a corporation organized and existing under

the laws of Wisconsin.

 

WHEREAS, WARF and Licensee have entered into License Agreement No. , effective,           (the "Patent Rights Agreement"), granting Licensee the right under certain LicensedPatents to make, use and receive Licensed Materials for use in Internal Research;

 

WHEREAS, WARF also holds certain rights in human embryonic stem cell lines developed by James A. Thomson of the University of Wisconsin - Madison, working either alone or with other researchers at the University (the "Wisconsin Materials" as defined below); and

 

WHEREAS, Licensee desires to obtain from WARF the Wisconsin Materials to maintain and use in accordance with the Patent Rights Agreement and the terms and conditions set forth below.

 

NOW, THEREFORE, in consideration of the above premises and the mutual covenants contained herein, the Parties further agree as follows:

 

    1. Except as otherwise provided in this Addendum, all terms and conditions previously set forth in the Patent Rights Agreement shall remain in effect as set forth therein. In the event that this Addendum and the Patent Rights Agreement are inconsistent with respect to any terms and conditions pertaining to the Wisconsin Materials, the terms and provisions of this Addendum shall supersede the terms and provisions of the Patent Rights Agreement.

 

    2. "Wisconsin Materials" shall mean any and all embryonic stem cells and cell lines provided to Licensee by WARF or a third party authorized by WARF, including any progeny, unmodified derivatives, genetically modified embryonic stem cells or clones of those cells or cell lines. Within thirty (30) days of the Effective Date of the Patent Rights Agreement, WARF shall provide Licensee, without additional charge, two aliquots each of the following embryonic stem cell lines: HI, H9, H7, HI3b and H14. In addition, Licensee shall be entitled to enroll two of its employees in the three-day Human Embryonic Stem Cell Culture Methods Course offered by the WiCell Research Institute, free of charge.

 

    3. As used in the Patent Rights Agreement, "Licensed Materials" shall further include the Wisconsin Materials; provided, however, that Licensee shall not have the right to:

 

       (a) intermix the Wisconsin Materials with an intact embryo, either human or nonhuman;

       (b)  implant the Wisconsin Materials or any products of the Wisconsin Materials in a uterus, including Derivative Materials derived from the Wisconsin Materials;

       (c) attempting to make whole embryos by any method using the Wisconsin Materials.

       (d) use the Wisconsin Materials for therapeutic purposes.

 

    4. Licensee agrees that on or before June 30th of each year in which this Addendum is in effect, License will submit to WARF a signed Annual Certification Statement as set forth on Exhibit A confirming compliance with the above restrictions. Licensee agrees that it will comply with all applicable laws, regulations and government orders with respect to any use of the Wisconsin Materials, and shall, as

 

  

-22-

  

Vistagen License 09-0092

 

appropriate, seek and comply with the decisions and recommendations of any applicable Institutional Review Board or similar body.

 

    5. Wisconsin Materials are the property of WARF and are being made available to Licensee as a service by WARF. Ownership of all Wisconsin Materials, including any progeny or modified versions thereof, shall remain with WARF, regardless of whether such Wisconsin Materials are received from WARF or an authorized third party. Any Wisconsin Materials provided hereunder will be returned to WARF or destroyed upon a material breach of any terms of this Addendum or the Patent Rights Agreement.

 

    6. Licensee agrees to communicate to WARF all publications and/or research results made public by Licensee based on research using the Wisconsin Materials. In addition, any reports, publications, or other disclosure of results obtained with the Wisconsin Materials will acknowledge WARF as the original source of the Wisconsin Materials and, in the event that the Wisconsin Materials were received from an authorized third party, the conditions in which such Wisconsin Materials were maintained prior to their transfer.

 

    7. Licensee may not assign or transfer this Addendum, nor any of the rights granted herein, except pursuant to a Change of Control Event, without the prior written consent of WARF, such consent not to be unreasonably withheld. This Addendum shall be governed by and construed in all respects in accordance with the laws of the State of Wisconsin.

 

The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Agreement on behalf of the Party for whom they have signed.

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the dates indicated below.

 

WISCONSIN ALUMNI RESEARCH FOUNDATION

 

By:                                                                Date:

 

Craig J. Christianson, Director of Licensing

 

LICENSEE

 

By:                                                                Date:

 

(insert name)

 

WARFRef.: Thomson -

 

  

-23-

  

 

 

EXHIBIT A

 

ANNUAL CERTIFICATION

 

. ("Licensee") hereby warrants that it is in compliance with all aspects of Agreement Nos.and                 A between the Wisconsin Alumni Research Foundation ("WARF") and Licensee, including butnot limited to the restrictions on the use, sale or transfer of the Licensed Materials, including the Wisconsin Materials. Licensee urther warrants and certifies that it is not engaged in, and has not been engaged in, any of the following:

 

(a) mixing of Wisconsin Materials with an intact embryo, either human or non-human;(b) implanting Wisconsin Materials or products of the Wisconsin Materials in a uterus; or(c) attempting to make whole embryos with Wisconsin Materials by any method.

 

The individual signing for the Licensee, hereby warrants that he or she is a representative legally authorized to sign on behalf of that entity.

 

LICENSEE.

 

By:                                                                Date:

  

-24-

  

 

R U A R F

 

Wisconsin Alumni Research Foundation

 

PO Box 7365 Madison, Wl 53707-7365 PH: 608-263-2500 FAX: 608-263-1064

 

www.warf.org

 

February 12, 2009

 

Chief Executive Officer VistaGen Therapeutics, Inc. 384 Oyster Point Blvd. #8 South San Francisco, CA 94080

 

  RE:    Materials Addendum between Vistagen and the Wisconsin Alumni Research Foundation ("WARF")

WARFRef.: P96014US/Thomson Agreement No.: 09-0092A

 

Dear Licensee:

 

Enclosed for your file is a fully signed original of the above referenced amendment between Vistagen and WARF, effective date, February 2,2009. •

 

I would like to thank you for your interest in University of Wisconsin technology and invite you to contact us if we can be of further assistance.

Tammy/rorbleau Licensing Department E-mail tammy@WARP.org 608-890-2065

 

Enclosure: One Execution Copy, Amendment 09-0092A

 

cc:     Andy DeTienne

Licensing Manager

Wisconsin Alumni Research Foundation

  

-25-

  

 

WARF Agreement No.                                                      A

 

WISCONSIN MATERIALS ADDENDUM

 

This Addendum is made effective the day of                                                                                                           by and between Wisconsin

Alumni Research Foundation (hereinafter called "WARF"), a nonprofit Wisconsin corporation, and

                               . (hereinafter called "Licensee"), a corporation organized and existing under

the laws of Wisconsin.

 

WHEREAS, WARF and Licensee have entered into License Agreement No., effective

  , (the "Patent Rights Agreement"), granting Licensee the right under certain Licensed Patents to make, use and receive Licensed Materials for use in Internal Research;

 

WHEREAS, WARF also holds certain rights in human embryonic stem cell lines developed by James A. Thomson of the University of Wisconsin - Madison, working either alone or with other researchers at the University (the "Wisconsin Materials" as defined below); and

 

WHEREAS, Licensee desires to obtain from WARF the Wisconsin Materials to maintain and use in accordance with the Patent Rights Agreement and the terms and conditions set forth below.

 

NOW, THEREFORE, in consideration of the above premises and the mutual covenants contained herein, the Parties further agree as follows:

 

    1. Except as otherwise provided in this Addendum, all terms and conditions previously set forth in the Patent Rights Agreement shall remain in effect as set forth therein. In the event that this Addendum and the Patent Rights Agreement are inconsistent with respect to any terms and conditions pertaining to the Wisconsin Materials, the terms and provisions of this Addendum shall supersede the terms and provisions of the Patent Rights Agreement.

 

    2. "Wisconsin Materials" shall mean any and all embryonic stem cells and cell lines provided to Licensee by WARF or a third party authorized by WARF, including any progeny,, unmodified derivatives, genetically modified embryonic stem cells or clones of those cells or cell lines. Within thirty (30) days of the Effective Date of the Patent Rights Agreement, WARF shall provide Licensee, without additional charge, two aliquots each of the following embryonic stem cell lines: HI, H9, H7, HI 3b and HI 4. In addition, Licensee shall be entitled to enroll two of its employees in the three-day Human Embryonic Stem Cell Culture Methods Course offered by the WiCell Research Institute, free of charge.

 

    3. As used in the Patent Rights Agreement, "Licensed Materials" shall further include, the Wisconsin Materials; provided, however, that Licensee shall not have the right to:

 

       (a) intermix the Wisconsin Materials with an intact embryo, either human or nonhuman;

       (b)  implant the Wisconsin Materials or any products of the Wisconsin Materials in a uterus, including Derivative Materials derived from the Wisconsin Materials;

       (c) attempting to make whole embryos by any method using the Wisconsin Materials.

       (d) use the Wisconsin Materials for therapeutic purposes.

  

-26-

  

 

    4. Licensee agrees that on or before June 30th of each year in which this Addendum is in effect, License will submit to WARF a signed Annual Certification Statement as set forth on Exhibit A confirming compliance with the above restrictions. Licensee agrees that it will comply with all applicable laws, regulations and government orders with respect to any use of the Wisconsin Materials, and shall, as appropriate, seek and comply with the decisions and recommendations of any applicable Institutional Review Board or similar body.

 

    5. Wisconsin Materials are the property of WARF and are being made available to Licensee as a service by WARF. Ownership of all Wisconsin Materials, including any progeny or modified versions thereof, shall remain with WARF, regardless of whether such Wisconsin Materials are received from WARF or an authorized third party. Any Wisconsin Materials provided hereunder will be returned to WARF or destroyed upon a material breach of any terms of this Addendum or the Patent Rights Agreement.

 

    6. Licensee agrees to communicate to WARF all publications and/or research results made public by Licensee based on research using the Wisconsin Materials. In addition, any reports, publications, or other disclosure of results obtained with the Wisconsin Materials will acknowledge WARF as the original source of the Wisconsin Materials and, in the event that the Wisconsin Materials were received from an authorized Ihird party, the conditions in which such Wisconsin Materials were maintained prior to their transfer.

 

    7. Licensee may not assign or transfer this Addendum, nor any of the rights granted herein, except pursuant to a Change of Control Event, without the prior written consent of WARF, such consent not to be unreasonably withheld. This Addendum shall be governed by and construed in all respects in accordance with the laws of the State of Wisconsin.

 

The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Agreement on behalf of the Party for whom they have signed.

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the dates indicated below.

 

WISCONSIN ALUMNI RESEARCH FOUNDATION

	 

 

LICENSEE

'

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