<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
ON
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
DECEMBER 23, 1996
CAMBRIDGE NEUROSCIENCE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19193 13-3319074
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
ONE KENDALL SQUARE, BUILDING 700, CAMBRIDGE, MASSACHUSETTS 02139
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(617) 225-0600
<PAGE> 2
ITEM 5. OTHER.
-----
On December 23 1996, Cambridge NeuroScience, Inc. (the "Company"), The
J. David Gladstone Institutes ("Gladstone") and The Regents of the University
of California (the "University") entered into a collaboration for the
development of treatments for Alzheimer's disease and other neurological
diseases, disorders or injuries. In connection with the collaboration, the
Company formed a subsidiary, Cambridge NeuroScience Partners, Inc. ("CNPI").
The Company purchased 80% of the outstanding common stock of CNPI and made a
$1.25 million equity investment in CNPI immediately prior to the consummation
of the collaboration. The University and Gladstone own 5% and 15%,
respectively, of the outstanding shares of CNPI common stock. In
connection with the collaboration, the parties executed a Sponsored Research
and Collaboration Agreement, an Option Agreement and a Stockholders' Rights
Agreement (the "Agreements"). Pursuant to the terms of the collaboration,
Gladstone will conduct a research program over a three-year period, for which
CNPI will provide at least $1.25 million in funding per year. The University
granted CNPI an exclusive three-year option to negotiate an exclusive
worldwide, royalty-bearing license for patentable rights in intellectual
property covered by or arising from the research program within the field,
subject to certain terms and conditions set forth in the option agreement. CNPI
paid the University an initial license option fee and will make additional
option fee payments during the term of the research program and, if applicable,
upon exercise of the option. The final terms of such license have not been
determined but will require ongoing commitments and expenditures, in addition
to royalty payments, by CNPI. There can be no assurance that such commitments
and other terms will be favorable to CNPI and/or the Company. The University
and Gladstone also granted CNPI a right of first negotiation for an exclusive
license for inventions arising from the research program outside of the field.
The Company has guaranteed CNPI's obligations with respect to the
collaboration, including CNPI's financial obligations. The information
contained in the Agreements is incorporated herein by reference and filed as
Exhibits 99.1, 99.2 and 99.3 hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
------------------------------------------------------------------
(c) Exhibits.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
99.1* Sponsored Research and Collaboration Agreement dated as of
December 23, 1996 between The J. David Gladstone Institutes and
Cambridge NeuroScience Partners, Inc. Filed herewith.
99.2* Option Agreement dated as of December 23, 1996 by and among The
Regents of the University of California, Cambridge NeuroScience
Partners, Inc. and Cambridge NeuroScience, Inc. Filed herewith.
99.3* Stockholders' Rights Agreement dated as of December 23, 1996 by and
among Cambridge NeuroScience Partners, Inc., Cambridge NeuroScience,
Inc., The J. David Gladstone Institutes and The Regents of the
University of California. Filed herewith.
- -------------
* Confidential portions have been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 29, 1997 CAMBRIDGE NEUROSCIENCE, INC.
By: /s/ Elkan R. Gamzo
----------------------------
Elkan R. Gamzo, Ph.D.
President and Chief Executive
Officer
3
<PAGE> 4
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
99.1* Sponsored Research and Collaboration Agreement dated as of December
23, 1996 between The J. David Gladstone Institutes and Cambridge
NeuroScience Partners, Inc. Filed herewith.
99.2* Option Agreement dated as of December 23, 1996 by and among The
Regents of the University of California, Cambridge NeuroScience
Partners, Inc. and Cambridge NeuroScience, Inc. Filed herewith.
99.3* Stockholders' Rights Agreement dated as of December 23, 1996 by and
among Cambridge NeuroScience Partners, Inc., Cambridge NeuroScience,
Inc., The J. David Gladstone Institutes and The Regents of the
University of California. Filed herewith.
- -------------
* Confidential portions have been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
<PAGE> 1
Exhibit 99.1
Confidential material omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote such omissions.
SPONSORED RESEARCH AND COLLABORATION AGREEMENT
by and between
THE J. DAVID GLADSTONE INSTITUTES
and
CAMBRIDGE NEUROSCIENCE PARTNERS, INC.
dated as of December 23, 1996
<PAGE> 2
TABLE OF CONTENTS
1. DEFINITIONS.................................................... 1
2. INVESTIGATORS.................................................. 2
2.1. Principal Investigator................................... 2
2.2. Co-Investigator.......................................... 2
3. RESEARCH PROGRAM............................................... 2
3.1. General.................................................. 2
3.2. Records.................................................. 2
3.3. Consultation and Access.................................. 3
4. FUNDING AND RECORDS............................................ 3
4.1. Funding.................................................. 3
4.2. Funding Commitment....................................... 3
4.3. Equipment................................................ 3
4.4. Use of Funds............................................. 3
5. MEETINGS AND REPORTS........................................... 3
5.1. Meetings................................................. 3
5.2. Reports.................................................. 3
6. INTELLECTUAL PROPERTY RIGHTS................................... 4
6.1. Definitions.............................................. 4
6.2. Ownership of New Inventions.............................. 4
6.3. Disclosure of New Inventions in the Field................ 5
6.4. New Inventions Outside the Field......................... 5
6.5. Responsibility for Patent Filing and Prosecution......... 6
6.6. Research Results and Program Materials; Reserved Rights.. 7
6.7. Right to Fund Research Regarding New Opportunities....... 7
6.8. Invention Know-How....................................... 7
6.9. Warranties Regarding the Invention....................... 8
6.10. No Other Rights.......................................... 8
7. PUBLICATION AND CONFIDENTIALITY................................ 8
7.1. Publication Rights....................................... 8
7.2. Limitations on Publication............................... 8
7.3. Confidentiality.......................................... 9
8. TERM AND TERMINATION........................................... 10
8.1. Term..................................................... 10
8.2. Termination for Breach................................... 10
8.3. Effect of Termination.................................... 10
8.4. Survival................................................. 11
<PAGE> 3
9. INDEMNIFICATION................................................ 11
9.1. Indemnification by CNPI.................................. 11
9.2. Indemnification by GLADSTONE............................. 12
9.3. Procedure................................................ 12
10. GENERAL PROVISIONS............................................. 12
10.1. Arbitration.............................................. 12
10.2. Governing Law............................................ 13
10.3. Independent Contractors.................................. 13
10.4. Parties Bound............................................ 13
10.5. Entire Agreement......................................... 13
10.6. Further Assurances....................................... 13
10.7. Right to Develop Independently........................... 13
10.8. Notices.................................................. 13
10.9. Use of Names............................................. 14
10.10. No Oral Modification............................... 14
10.11. Waiver............................................. 14
10.12. Headings........................................... 15
10.13. Severability....................................... 15
10.14. Counterparts....................................... 15
10.15. Force Majeure...................................... 15
<PAGE> 4
SPONSORED RESEARCH AND COLLABORATION AGREEMENT
THIS SPONSORED RESEARCH AND COLLABORATION AGREEMENT ("Agreement"),
effective as of December 23, 1996 (the "Effective Date"), is made and entered
into by and between Cambridge NeuroScience Partners, Inc. ("CNPI"), a Delaware
corporation with its principal offices at One Kendall Square, Building 700,
Cambridge, MA 02139, and The J. David Gladstone Institutes ("GLADSTONE"), a
charitable trust with offices located at Irvine and San Francisco, California.
WHEREAS, CNPI desires to sponsor a program of research at GLADSTONE under
the direction of the Principal Investigator described in the Research Plan
attached as Exhibit A hereto;
WHEREAS, GLADSTONE desires to promote scientific inquiry and the public
benefit by conducting further research in the subject area of the Research Plan;
WHEREAS, CNPI desires to conduct collaborative research and to obtain
certain rights and licenses to inventions and technology arising out of or in
connection with such a program of research; and
WHEREAS, GLADSTONE is obligated to disclose and assign to the Regents of
the University of California ("The Regents"), a California corporation, in
accordance with an agreement dated June 8, 1977, as amended on March 27, 1984
and January 21, 1986 (the "Gladstone/Regents Agreement") all patentable rights
in intellectual property arising from research conducted by GLADSTONE
investigators under this Agreement, and, if The Regents elects to secure patent
protection for such rights, pursuant an Option Agreement of even date herewith
by and between The Regents and CNPI (the "Option Agreement"), The Regents is
obligated to grant CNPI exclusive rights to such patentable rights to the extent
provided in this Agreement and permitted under applicable law. If The Regents
elects not to secure patent protection for such rights and releases such rights
to the GLADSTONE investigator named as the inventor, the GLADSTONE investigator
is obligated, if requested by GLADSTONE, to assign such rights to GLADSTONE.
NOW, THEREFORE, in consideration of the promises and undertakings set
forth above and hereinafter, the parties hereto agree as follows:
1. DEFINITIONS
1.1. "Field" shall mean the "Field of Use" as that term is defined in the
Option Agreement.
<PAGE> 5
1.2. "Party" shall mean GLADSTONE or CNPI except for purposes of Articles
6 and 8 and Section 10.1 hereof, wherein "Party" shall mean GLADSTONE/Regents
(as defined therein) or CNPI.
1.3. "Research Program" shall mean a program of research in the Field
mutually agreed to in writing by the Parties in accordance with the quarterly
meetings to be held pursuant to Section 5.1 hereof and as further described in
the Research Plan and Budget attached as Exhibit A hereto and made a part of
this Agreement.
2. INVESTIGATORS
2.1. PRINCIPAL INVESTIGATOR. For the purpose of this Agreement and
pursuant to GLADSTONE policy, Dr. Robert W. Mahley is designated the Principal
Investigator (the "Principal Investigator") who shall be responsible for the
administration, direction and content of the Research Program, including
budgeting and revisions to the budget reasonably necessary to accomplish the
Research Program, subject to the approval of CNPI, which approval shall not be
unreasonably withheld or delayed. Should the Principal Investigator leave
GLADSTONE or otherwise become unavailable during the term of this Agreement,
GLADSTONE may nominate a replacement, subject to the approval of CNPI. If CNPI
does not accept the replacement, the Research Program and budget may be modified
to reflect a reduced scope of work or terminated on thirty (30) days' prior
written notice at the option of CNPI in its sole discretion. CNPI hereby agrees
that Dr. Karl H. Weisgraber is an acceptable replacement.
2.2. CO-INVESTIGATOR. CNPI agrees to assign Dr. Robert N. McBurney (the
"Co-Principal Investigator") to direct CNPI's participation in the Research
Program. CNPI reserves the right to substitute a new Co-Principal Investigator
at any time without the prior approval of GLADSTONE.
3. RESEARCH PROGRAM
3.1. GENERAL. Principal Investigator will use his best efforts to conduct
the Research Program. The Research Program shall be under the direction of
Principal Investigator and shall be conducted at GLADSTONE. Modifications to the
Research Program may be made from time to time, as mutually agreed upon in
writing by GLADSTONE and CNPI.
3.2. RECORDS. The Principal Investigator and other personnel at GLADSTONE
assisting the Principal Investigator in the Research Program will keep accurate
scientific records relating to the Research Program and will make such records
available to CNPI during normal business hours upon reasonable notice. It is
understood that such records shall include detailed, witnessed laboratory
notebooks sufficient to document any patentable inventions made in the course of
the Research Program. Upon request by CNPI, and at its expense, the Principal
Investigator agrees promptly to provide copies of all such materials to CNPI. It
is understood by the Parties that CNPI owns its own records and laboratory
notebooks as well as those of the Co-Principal Investigator and GLADSTONE owns
the Principal Investigator's records and laboratory notebooks and the data
contained therein.
2
<PAGE> 6
3.3. CONSULTATION AND ACCESS. The Co-Principal Investigator and/or his
designees may consult informally with the Principal Investigator, both in person
and by telephone, regarding performance of the Research Program. The
Co-Principal Investigator and/or his designees shall have reasonable access to
the GLADSTONE facilities where the Research Program is being conducted at times
convenient to GLADSTONE and after reasonable notice.
4. FUNDING AND RECORDS
4.1. FUNDING. As consideration for conducting the Research Program, CNPI
agrees to fund Principal Investigator's activities under the Research Program.
The level of funding as set forth in the budget attached hereto as Exhibit A
(the "Budget") shall be: One Million Two Hundred and Fifty Thousand Dollars
($1,250,000.00) in the first year; a minimum of One Million Two Hundred and
Fifty Thousand Dollars ($1,250,000.00) in the second year; and a minimum of One
Million Two Hundred and Fifty Thousand Dollars ($1,250,000.00) in the third
year. All funds shall be paid on a semi-annual basis, in advance.
4.2. FUNDING COMMITMENT. Unless this Agreement is earlier terminated
pursuant to Article 8 hereof, CNPI agrees to provide the total minimum amount of
funding for the three years of the Research Program as set forth in Section 4.1
above.
4.3. EQUIPMENT. Title to supplies or equipment purchased under the
Research Program shall vest in GLADSTONE.
4.4. USE OF FUNDS. GLADSTONE shall monitor expenditures in accordance with
its policies to ensure that the funds provided by CNPI are properly spent in the
performance of the Research Program.
5. MEETINGS AND REPORTS
5.1. MEETINGS. Joint scientific meetings between GLADSTONE and CNPI shall
occur quarterly during the term of this Agreement to discuss the results
generated under the Research Program and to consider modifications to the
Research Program based upon such results. Such meetings shall occur at CNPI or
GLADSTONE at such times as shall be determined by mutual agreement of GLADSTONE
and CNPI, at CNPI's expense, and shall be attended by Principal Investigator and
designated members of the GLADSTONE research group, and representatives of CNPI.
5.2. REPORTS. GLADSTONE shall promptly disclose data and information
obtained under the Research Program in written quarterly reports to CNPI.
3
<PAGE> 7
6. INTELLECTUAL PROPERTY RIGHTS
6.1. Definitions.
-----------
(a) "Materials" shall mean any tangible biological, chemical or
physical materials.
(b) "New Invention" shall mean any potentially patentable invention
arising from the Research Program which is (i) conceived during the term of this
Agreement by employees or agents of GLADSTONE or by employees or agents of both
GLADSTONE and CNPI jointly and (ii) constructively or actually reduced to
practice during the term of this Agreement.
(c) "New Opportunity" shall mean any potentially patentable
invention arising from the Research Program other than New Inventions which is
conceived during the term of this Agreement by employees or agents of GLADSTONE
but which is not reduced to practice, either actually or constructively, during
the term of this Agreement.
(d) "Option/License Agreement" shall mean the Option Agreement and
any License Agreement (as it may be amended from time to time) resulting from
the exercise of the Option (as defined in the Option Agreement).
(e) "Program Materials" shall mean Materials that are discovered or
developed in the performance of the Research Program.
(f) "Research Results" shall mean all data, test results, laboratory
notes, techniques, know-how, and any other research results that are obtained in
the performance of the Research Program. The term "Research Results" shall not
include any Program Materials, patentable inventions, claims of copyright or
other intellectual property based on Research Results.
6.2. OWNERSHIP OF NEW INVENTIONS. All rights to New Inventions made
solely by GLADSTONE's employees and agents and arising from research conducted
under this Agreement shall belong to GLADSTONE, subject to the rights of The
Regents pursuant to the GLADSTONE/Regents Agreement (GLADSTONE and The Regents
are hereinafter referred to as "GLADSTONE/Regents"). CNPI shall cause its
employees and agents to assign all rights to New Inventions to CNPI. All rights
to New Inventions made jointly by GLADSTONE's employees or agents with one or
more employees or agents of CNPI and arising from research conducted under this
Agreement shall belong jointly to GLADSTONE/Regents and CNPI. CNPI shall be
granted rights under the Option/License Agreement to GLADSTONE's and The
Regents' interest in New Inventions in the Field in accordance with the terms
thereof and CNPI shall be granted rights under The Regents' interest in New
Inventions outside the Field in accordance with Section 6.4 below. The Regents
agrees to assert rights to the Invention (as defined in the Option/License
Agreement) and New Inventions both in and outside of the Field.
4
<PAGE> 8
6.3. DISCLOSURE OF NEW INVENTIONS IN THE FIELD. Each Party shall promptly
disclose to the other Party any New Inventions in the Field arising under this
Agreement. The Party to whom such New Invention is disclosed agrees to hold such
disclosure on a confidential basis. The rights of CNPI to license New Inventions
in the Field are governed by the Option/License Agreement.
6.4. New Inventions Outside the Field.
--------------------------------
(a) GLADSTONE/Regents shall promptly disclose to CNPI any New
Inventions outside the Field arising under this Agreement. The Party to whom
such New Invention is disclosed agrees to hold such disclosure on a confidential
basis.
(b) To the extent that GLADSTONE and The Regents have the legal
right to do so, CNPI shall be entitled to an exclusive license to GLADSTONE's
and Regents' interest in each New Invention outside the Field on terms to be
negotiated in good faith between the Parties as set forth herein. CNPI agrees to
notify GLADSTONE/Regents in writing within ninety (90) days of disclosure of the
applicable New Invention outside the Field as to whether or not it wishes to
negotiate a license to such New Invention. Upon CNPI's affirmative election to
negotiate a license, GLADSTONE/Regents agree to negotiate in good faith with
CNPI for a period of one hundred and eighty (180) days to conclude, at CNPI's
option, either a license or option agreement for such New Invention. Such
license or option agreement shall include reasonable terms typically found in
licensing agreements and provide for diligent development of the New Invention
and CNPI's obligation to reimburse GLADSTONE/Regents for patent expenses
incurred by GLADSTONE/Regents with respect to such New Invention up to and
including the effective date of such license or option agreement. If, at the end
of such one hundred and eighty (180) day period, CNPI and GLADSTONE/Regents are
unable to agree on terms for the license or option agreement, then, unless the
Parties agree to extend the negotiation period, CNPI shall promptly deliver to
GLADSTONE/Regents a final proposal detailing the terms on which it would enter
into such an agreement (the "Final Proposal"). GLADSTONE/Regents shall have
thirty (30) days from receipt of the Final Proposal to notify CNPI of its
willingness to enter into an agreement on such terms. If GLADSTONE/Regents does
not so notify CNPI, then GLADSTONE/Regents shall be free to dispose of the
relevant New Invention in accordance with GLADSTONE/Regents' policy; provided,
however, that, for a period of two (2) years from the expiration of such thirty
(30) day period, if GLADSTONE/Regents proposes to enter into any such
arrangement with a third party on the terms set forth in the Final Proposal or
on terms more favorable to the third party than the terms contained in the Final
Proposal, then (i) GLADSTONE/Regents shall deliver to CNPI a notice specifying
such terms (an "Offer Notice"), (ii) CNPI shall have fifteen (15) days from
receipt of the Offer Notice to either waive its first refusal right or notify
GLADSTONE/Regents of its desire to negotiate in good faith a definitive
agreement reflecting such terms (the "Acceptance Notice") and (iii) if, at the
end of thirty (30) days from the Acceptance Notice, CNPI and GLADSTONE/Regents
fail to enter into a definitive agreement reflecting such terms, then the
parties shall submit any disputed issues regarding such agreement to binding
arbitration pursuant to Section 10.1 hereof. If CNPI waives its first refusal
right with respect to the terms set forth in the Offer Notice or fails to
deliver to GLADSTONE/Regents an Acceptance Notice within the requisite fifteen
(15) day period, then GLADSTONE/Regents shall be free to enter into an
arrangement for the relevant New Invention with a third party, the terms of such
arrangement
5
<PAGE> 9
to be no more favorable to the third party than those set forth in the Offer
Notice if entered into during the aforementioned two (2) year period.
(c) If CNPI elects not to secure a license, then rights to such New
Invention may be disposed of by GLADSTONE/Regents with no further obligation to
CNPI.
6.5. Responsibility for Patent Filing and Prosecution.
-------------------------------------------------
(a) GLADSTONE/Regents shall control the preparation, filing and
prosecution of patent applications that are owned solely by GLADSTONE/Regents
and filed by GLADSTONE/Regents in connection with New Inventions in the Field as
provided in the Option/License Agreement.
(b) In the case of patent applications owned solely by
GLADSTONE/Regents and filed by GLADSTONE/Regents in connection with New
Inventions outside the Field, GLADSTONE/Regents shall provide CNPI in a timely
manner with copies of all patent applications filed by GLADSTONE/Regents in
connection therewith that may be or have been licensed to CNPI pursuant to this
Article 6 and/or the Option/License Agreement, as well as those documents
involved in the prosecution thereof, so that CNPI shall have an opportunity to
provide comment on any such applications and documents. Unless CNPI either (a)
notifies GLADSTONE/Regents pursuant to Section 6.4(b) that it does not wish to
negotiate a license to a New Invention or (b) fails, within the ninety (90)-day
period set forth in the said sentence, to notify GLADSTONE/Regents that it
wishes to negotiate such a license, CNPI shall bear the expenses associated with
the filing and prosecution of patent applications covering New Inventions
outside the Field. GLADSTONE/Regents will not abandon any such application
without the consent of CNPI for so long as CNPI agrees to pay for the expenses
thereof. In the event that GLADSTONE/Regents elects to abandon any patent
application with CAMBRIDGE NuCo's consent, CNPI may, in its sole discretion,
elect to take title to such patent application and continue prosecution of such
application, in which event GLADSTONE/Regents agrees to assign all of its rights
thereto to CNPI.
(c) CNPI shall control the preparation, filing, prosecution and
maintenance of patent applications that are jointly owned by CNPI and
GLADSTONE/Regents. Such applications shall be prepared, filed and prosecuted by
patent counsel reasonably acceptable to GLADSTONE/Regents. The Principal
Investigator and GLADSTONE/Regents shall cooperate fully with and provide
assistance to CNPI (or if the parties agree to have GLADSTONE/Regents exercise
control, CNPI shall cooperate fully with and provide assistance to
GLADSTONE/Regents) in connection with the preparation, filing, prosecution and
maintenance of such jointly-owned patent applications, including, without
limitation, execution of all documents and performance of all acts reasonably
necessary to file and prosecute such patent applications and maintain, enforce
and defend such patents. Each of CNPI and GLADSTONE/Regents shall provide the
other in a timely manner with copies of all jointly-owned patent applications
filed by each pursuant to Article 6, as well as those documents involved in the
prosecution thereof, so that the other shall have an opportunity to provide
comment on any such applications and documents. CNPI shall bear the expenses
associated with the filing and prosecution of such jointly-owned patent
applications. Neither Party shall abandon any such application without thirty
(30) days notice to the other.
6
<PAGE> 10
6.6. Research Results and Program Materials; Reserved Rights.
-------------------------------------------------------
(a) CNPI shall have the unrestricted royalty-free right to use
Research Results for any purpose; provided, however, that CNPI shall not use
Research Results for commercial purposes unless it first obtains a commercial
license thereto if such use would infringe any claim of a patent application or
an issued patent as to which CNPI has not theretofore obtained a license for any
reason pursuant to the Option/License Agreement or Section 6.4(b) hereof. CNPI
shall have the right to use Program Materials for internal research programs. In
the event that (i) CNPI desires to obtain a commercial license to any Program
Materials that are not patentable or (ii) GLADSTONE/Regents determines that it
desires to grant a commercial license for any such Program Materials, CNPI
shall, in either case, have a right of first negotiation with respect to such a
license and the Parties shall negotiate such a license in good faith in
accordance with the procedures set forth in Section 6.4(b) hereof.
GLADSTONE/Regents shall have the unrestricted right to use the Research Results
for any purpose, subject to Section 7.2 hereof.
(b) GLADSTONE/Regents reserves the right to use any Program
Materials free of charge for its own research and educational purposes only.
GLADSTONE further retains the right to distribute any Program Material to others
engaged in non-commercial research, free of charge, under a written Gladstone
Material Transfer Agreement which provides that use shall be restricted to
non-commercial research. Prior to any transfer of Program Materials pursuant to
the preceding sentence, GLADSTONE/Regents shall cause any investigator and/or
institution to whom Program Materials are provided to enter into an agreement
setting forth publications procedures substantially similar to those set forth
in Sections 7.1 and 7.2 hereof providing CNPI with the right to review and
comment on publications to be made by such investigator and/or institution and
to remove any Confidential Information of CNPI. The Principal Investigator shall
provide CNPI with a list for its records of the investigators and institutions
to whom Program Materials have been provided as described under this Section
6.6(b) and shall keep the list current.
6.7. RIGHT TO FUND RESEARCH REGARDING NEW OPPORTUNITIES. At least sixty
(60) days prior to expiration or termination (except by GLADSTONE/Regents under
Section 8.2) of this Agreement, the Principal Investigator will disclose each
New Opportunity to CNPI in confidence and propose a program of research to
actually reduce such New Opportunity to practice. CNPI shall have the first
right to fund such additional research, such right to be exercised by written
notice to GLADSTONE/Regents within forty-five (45) days of disclosure of such
New Opportunity and program. Thereafter, the parties will promptly enter into a
Sponsored Research Agreement covering such research. Promptly following the
expiration or termination (except by GLADSTONE/Regents under Section 8.2) of
this Agreement, GLADSTONE/Regents will disclose any New Opportunities which
arose during the period since the original disclosure of New Opportunities, and
CNPI will have a first right to fund research to actually reduce such New
Opportunity to practice as set forth above. CNPI's rights under this Section 6.7
shall apply even if GLADSTONE/Regents constructively reduces a New Opportunity
to practice by filing a patent application prior to the expiration of the (45)
day period described above.
6.8. INVENTION KNOW-HOW. GLADSTONE/Regents agrees to provide CAMBRIDGE
NuCo with reasonable access to any technical information, experimental data
and/or tangible
7
<PAGE> 11
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
research materials relating to the Invention (as defined in the Option
Agreement) for the purpose of evaluating its interest in exercising its Option
under the Option Agreement.
6.9. WARRANTIES REGARDING THE INVENTION. GLADSTONE warrants that Dr.
Robert W. Mahley has not published or publicly presented any of the data or
research results contained in U.S. Patent Applications Serial *********** and
covering the Invention as defined in the Option Agreement.
6.10. NO OTHER RIGHTS. Nothing contained in this Agreement shall be deemed
to grant either directly or by implication, estoppel, or otherwise any license
under any patents, patent applications, or other proprietary interests to any
other invention, discovery, or improvement of any Party.
7. PUBLICATION AND CONFIDENTIALITY
7.1. Publication Rights.
------------------
(a) Subject to the rights granted to CNPI pursuant to this
Agreement, including without limitation Section 7.2, the Principal Investigator
shall have the right to publish or otherwise disclose all technical reports,
information and/or data developed by the Principal Investigator under this
Agreement. In connection with any publication or disclosure by the Principal
Investigator during the term of this Agreement or after of such reports,
information and/or data, CNPI may request that Principal Investigator include an
appropriate acknowledgement of CNPI's sponsorship of the Research Program in
such publication or disclosure.
7.2. Limitations on Publication.
--------------------------
(a) To avoid loss of patent rights as a result of premature public
disclosure of patentable information, the Principal Investigator and GLADSTONE
each agree to submit to CNPI, at least thirty (30) days prior to submission for
publication or disclosure, any and all materials intended for publication or
disclosure relating to technical reports, data, or information developed by the
Principal Investigator and/or other personnel at GLADSTONE assisting the
Principal Investigator under this Agreement. In the event CNPI believes
patentable subject matter is disclosed in such materials it shall, within
fifteen (15) days of its receipt thereof, notify GLADSTONE and publication or
disclosure will thereupon be withheld for a period of up to ninety (90) days
from the date of receipt by CNPI of the proposed publication or other disclosure
so that a patent application covering such invention may be prepared and filed
as provided in Section 6.3. Further, if CNPI believes that such materials
contain Confidential Information (as defined below) of CNPI, the Principal
Investigator and GLADSTONE agree to remove such Confidential Information from
the proposed publication or disclosure. Further, in the case of a publication
based on the results of x-ray crystallography, GLADSTONE agrees that the
three-dimensional coordinates of any target molecules will not be published
until such publication is required under the policy of the academic journal in
which the results were first published.
8
<PAGE> 12
(b) CNPI agrees that, during the term of this Agreement and after,
CNPI will appropriately acknowledge the contributions of the Principal
Investigator and GLADSTONE in any publication or disclosure by CNPI of Research
Results and data based upon the Research Program. In addition, CNPI agrees to
provide the Principal Investigator a copy of any such publication or disclosure
in confidence for information purposes at least thirty (30) days before public
release of such publication or disclosure. The Principal Investigator shall have
the right to reasonably edit any such publications or disclosures which are
jointly authored by Principal Investigator. The foregoing shall not apply to
press releases of Cambridge NeuroScience, Inc. ("CNSI") and/or CNPI issued in
the ordinary course of business or to reports filed by CNSI and/or CNPI with the
National Association of Securities Dealers, the Securities and Exchange
Commission or any other governmental agency in accordance with applicable laws
or regulations.
7.3. CONFIDENTIALITY. Either Party, from time to time, in connection with
the Research Program, may disclose Confidential Information to the other Party.
For purposes of this Agreement, "Confidential Information" shall mean
confidential and proprietary information and materials that are designated as
confidential in writing by the providing Party, whether by letter or by use of
an appropriate stamp or legend, prior to or at the same time any such
information or materials are disclosed. Notwithstanding the foregoing to the
contrary, materials and other information which are orally, visually or
electronically disclosed, or are disclosed in writing without an appropriate
letter, stamp, or legend, shall constitute Confidential Information if the
providing Party, within thirty (30) days after such disclosure, delivers to the
other Party a written document or documents describing the materials and
identifying the Confidential Information. The Parties agree, to the extent
permitted by law, that Confidential Information shall remain the property of the
providing Party. Each of the Parties further agree to use its best efforts to
insure that Confidential Information shall not be disclosed, divulged or
otherwise communicated to third parties or used for any purposes other than to
conduct the Research Program, provided that the obligations under this Section
7.3 shall not apply to information that:
(a) is in possession of the recipient at the time of disclosure
thereof a demonstrated by written records;
(b) is or later becomes part of the public domain through no
fault of the recipient;
(c) is received by the recipient from a third party having no
obligation of confidentiality to the providing Party;
(d) is developed independently by the recipient without use of
Confidential Information; or
(e) is required by law or regulation to be disclosed; provided,
however, that recipient has provided written notice to providing Party promptly
to enable the providing Party to seek a protective order or otherwise prevent
disclosure of such information.
9
<PAGE> 13
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
8. TERM AND TERMINATION
8.1. TERM. The term of this Agreement ("Term") shall commence on the
Effective Date and continue in full force for three (3) years from and after the
Effective Date, unless earlier terminated in accordance with Section 2.1 or this
Article 8. This Agreement may be renewed or extended by mutual written consent
of the Parties within thirty (30) days prior to expiration.
8.2. TERMINATION FOR BREACH. If either Party materially breaches any
material warranty, term or condition of this Agreement (including but not
limited to CNPI's failure to make any payments due and the failure of GLADSTONE
and/or the Principal Investigator to diligently perform its or his respective
obligations with respect to the Research Program in substantial accordance with
Exhibit A hereto) and fails to remedy such material breach within sixty (60)
days after receipt of notice in writing of such material breach from the other
Party, the non-breaching Party, at such Party's option and in addition to any
other remedies that such Party may have in law or in equity, may terminate this
Agreement by sending written notice of termination with immediate effect to the
other Party.
8.3. EFFECT OF TERMINATION. Termination of this Agreement shall not
affect the rights and obligations of the parties which accrued hereunder except
as provided under this Section 8.3.
(a) In the event that this Agreement is terminated for any reason,
GLADSTONE will proceed in an orderly fashion to terminate any outstanding
commitments and to stop the Research Program as soon as it is practicable to do
so. All documented costs reasonably incurred by GLADSTONE in connection with
such termination will be considered reimbursable costs, including costs incurred
prior to the notice of termination but which have not yet been reimbursed, and
commitments existing at the time the notice of termination is received which by
their terms cannot be canceled. This shall include all non-cancelable contracts
entered into and fellowships or postdoctoral associate appointments offered and
accepted prior to the effective date of termination. After termination, any
obligation of CNPI to GLADSTONE with respect to fellowships or postdoctoral
associate appointments shall end as soon as possible consistent with GLADSTONE
personnel policies and in no event later than ***************** from the date of
notice of termination. In no case will such reimbursement exceed the total
estimated projected cost of the Research Program, unless otherwise mutually
agreed to by the Parties. Termination of this Agreement shall not relieve CNPI
from the obligation to make any payments due and payable to GLADSTONE as of the
date of termination. GLADSTONE shall have the right to retain, in full, payments
received pursuant to Section 4.1 prior to the date of termination.
(b) In the event this Agreement is terminated by CNPI pursuant to
Sections 2.1 or 8.2 above,
(i) CNPI's exclusive option for an exclusive license under
the Option Agreement or additional exclusive licenses
under the License Agreement, as the case may be, shall
continue in full force and effect with respect to the
Invention (as defined therein) and any
10
<PAGE> 14
New Inventions arising on or prior to the date on which
the Research Program is terminated pursuant to clause
(a) above, and the Option Agreement shall not be
terminated by The Regents except as provided in clause
(ii) below.
(ii) CNPI shall notify The Regents within six (6) months of
the date of termination of the Research Program pursuant
to clause (a) above whether CNPI is exercising its
option under the Option Agreement, such notice to be in
the form required by the Option Agreement. If CNPI
elects not to exercise its option under the Option
Agreement or fails to properly do so within the
aforementioned six (6) month period, then The Regents
may terminate the Option Agreement in accordance with
its terms. If CNPI properly exercises its option under
the Option agreement, then CNPI and The Regents shall
negotiate the License Agreement or amendment(s) thereto
(as the case may be) as provided in the Option/License
Agreement.
(iii) CNPI's right of first refusal under Section 6.4 hereof
shall continue in full force and effect (A) with respect
to any and all New Inventions arising prior to or on the
date on which the Research Program is terminated
pursuant to clause (a) of this Section 8.3 as to which
CNPI has elected (or has been deemed to have elected)
not to secure a license pursuant to Section 6.4 hereof
and (B) until the expiration of the applicable two (2)
year period with respect to each New Invention for which
a Final Proposal has been delivered.
(c) In the event this Agreement is terminated by GLADSTONE/Regents
pursuant to Section 8.2 above, CNPI's exclusive option for an exclusive license
under the Option Agreement, or for additional exclusive licenses under the
License Agreement, as the case may be, shall terminate, and the Option Agreement
shall terminate.
8.4. SURVIVAL. The following Sections and Articles of this Agreement
shall survive the expiration or termination for any reason of this Agreement:
Sections 3.2, 6.2, 6.4 (as provided in Section 8.3(b) above), 6.5, 6.6, 8.3 and
8.4 and Articles 7, 9 and 10.
9. INDEMNIFICATION
9.1. INDEMNIFICATION BY CNPI. CNPI agrees to defend, indemnify and hold
harmless GLADSTONE, its partners, its employees and or agents from and against
all complaints, causes of action, claims, losses, costs, damages, liabilities,
or expenses by reason of any liability sought to be imposed upon GLADSTONE
resulting from injuries to persons or damages to property, provided such
injuries to persons or damage to property are due or claimed to be due as a
result of acts or omissions of acts of CNPI, its officers, employees or agents.
11
<PAGE> 15
9.2. INDEMNIFICATION BY GLADSTONE. GLADSTONE agrees to defend, indemnify
and hold harmless CNPI, its affiliates, officers, directors, employees and
agents from and against all complaints, causes of actions, claims, losses,
costs, damages, liabilities, or expenses by reason of any liability sought to be
imposed upon CNPI resulting from injuries to persons or damages to property,
provided such injuries to persons or damages to property are due or claimed to
be due as a result of acts or omission of acts of GLADSTONE, its partners,
employees or agents.
9.3. PROCEDURE. A Party or any of its Affiliates or their respective
employees or agents (the "Indemnitee") that intends to claim indemnification
under this Article 9 shall promptly notify the other Party (the "Indemnitor") of
any loss, claim, damage, liability, expenses, or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually satisfactory to the Parties;
provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 9 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if materially prejudicial to its ability to defend such action, shall relieve
such Indemnitor of any liability to the Indemnitee under this Article 9, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
9. The Indemnitee under this Article 9, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or liability covered by this indemnification.
In the event that each Party claims indemnity from the other and one Party is
finally held liable to indemnify the other, the Indemnitor shall additionally be
liable to pay the reasonable legal costs and attorneys' fees incurred by the
Indemnitee in establishing its claim for indemnity.
10. GENERAL PROVISIONS
10.1. ARBITRATION. If the Principal Investigator and the Co-Principal
Investigator can not resolve a dispute, any controversy or claim arising out of
or relating to any provision of this Agreement or any breach thereof, shall be
settled by arbitration conducted in California in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration panel
will be conducted before a single arbitrator with experience in the
biotechnology industry provided that both Parties are able to agree on the
identity of such single arbitrator. If the Parties cannot agree on a single
arbitrator, there will be three arbitrators, with each Party selecting one and
the two arbitrators so selected choosing a third. Judgment upon the award
rendered by the arbitrator(s) shall be binding on the Parties and may be entered
by either Party in any court or forum, state or federal, having jurisdiction.
12
<PAGE> 16
10.2. GOVERNING LAW. This Agreement shall be governed by, construed, and
interpreted in accordance with the laws of the State of California, without
reference to principles of conflicts of laws.
10.3. INDEPENDENT CONTRACTORS. The relationship of CNPI and GLADSTONE
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give any of the Parties
hereto the power to direct or control the day-to-day activities of another Party
hereto, (ii) constitute the Parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking or (iii) allow any of
the Parties hereto to create or assume any obligations on behalf of another
Party hereto for any purposes whatsoever.
10.4. PARTIES BOUND. This Agreement, including the indemnification
provisions, shall be binding upon and inure to the benefit of the Parties
hereto, their respective successors, assigns, legal representatives and heirs.
CNPI may assign or transfer CNPI's rights and obligations under this Agreement
to an affiliate of CNPI or a successor to all or substantially all of its assets
or business relating to this Agreement, whether by sale, merger, operation of
law or otherwise. This Agreement shall not otherwise be assignable by either
Party without the prior written consent of the other Party.
10.5. ENTIRE AGREEMENT. This Agreement and the Option/License Agreement
constitute the entire and only agreements between the parties relating to the
subject matter hereof, and all prior negotiations, representations, agreements
and understandings are superseded by this Agreement and the Option/License
Agreement.
10.6. FURTHER ASSURANCES. At any time or from time to time on and after
the Effective Date, the Principal Investigator and GLADSTONE shall at the
request of CNPI (i) deliver to CNPI such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such assignments, consents documents or further
instruments of transfer or licenses and (iii) take or cause to be taken all such
other actions, as CNPI may reasonably deem necessary or desirable in order for
CNPI to obtain the full benefits of this Agreement and the transactions
contemplated hereby.
10.7. RIGHT TO DEVELOP INDEPENDENTLY. Nothing in this Agreement will
impair CNPI's right to independently acquire, license, develop or have
developed, utilize or otherwise exploit similar information and technology
performing the same or similar functions as the information and technology
provided by the Principal Investigator and/or GLADSTONE. In addition, nothing in
this Agreement is intended to prohibit Principal Investigator from independently
collaborating with academic, non-commercial parties on the Research Program with
the prior written consent of CNPI. CNPI hereby acknowledges that the Principal
Investigator intends to enter into an agreement with Lawrence Livermore National
Laboratory to perform the crystallography work of the Research Program and
consents to such arrangement.
10.8. NOTICES. Except for the remittance of payments which are governed by
Section 4.1, any notice or other communication required or permitted under this
Agreement shall be in writing and will be deemed received, if delivered by
courier on a business day, on the day delivered, or five (5) days after mailing
if mailed by first-class, certified or registered mail,
13
<PAGE> 17
postage prepaid, to the respective addresses given below or to such other
addresses as are designated by written notice:
If to GLADSTONE or the
Principal Investigator: The J. David Gladstone Institutes
P.O. Box 419100
San Francisco, CA 94141-9100
Attention: Dr. Robert W. Mahley
Executive Director
with a copy to: Richard Hille
J. David Gladstone Institutes
43 Corporate Park
Suite 102
Irvine, CA 92714
If to CNPI: CNPI
c/o Cambridge NeuroScience, Inc.
One Kendall Square
Building 700
Cambridge, MA 02139
Attention: Harry W. Wilcox
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attention: F. Andrew Anderson, Esq.
10.9. USE OF NAMES. Neither Party will use the name of the other Party or
its employees in any advertisement, press release, or other publicity without
the prior written approval of the other Party, such approval not to be
unreasonably withheld or delayed, except as may be required by applicable
federal or state securities laws or regulations. CNPI understands that the
California Education Code section 92000 provides that the name "University of
California" is the property of the State of California and that no person shall
use that name in a manner prohibited by the said Section 92000 without the
permission of The Regents. Such permission may be granted by the Chancellor or
his designee. GLADSTONE shall have the right to acknowledge CNPI's support of
the research performed under this Agreement in scientific publications and other
scientific communications.
10.10. NO ORAL MODIFICATION. No change, modification, extension,
termination of this Agreement or of any provisions hereof shall be effective
unless assented to in writing by each of the Parties.
10.11. WAIVER. No waiver of any rights, shall be effective unless assented
to in writing by the Party to be charged and the waiver of any breach of default
shall not constitute a waiver of any other right hereunder or any subsequent
breach or default.
14
<PAGE> 18
10.12. HEADINGS. The headings of the Sections and Articles of this
Agreement are intended for convenience of reference only and are not intended to
affect in any way the meaning or interpretation of this Agreement.
10.13. SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided, that no such severability shall be effective
if the result of such action materially changes the economic benefit of this
Agreement to CNPI, or to the Principal Investigator or GLADSTONE.
10.14. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.15. FORCE MAJEURE. The parties to this Agreement shall be excused from
any performance required hereunder if such performance is rendered impossible or
unfeasible due to any catastrophes or other major events beyond their reasonable
control, including, without limitation, war, riot, and insurrection; laws,
proclamations, edicts, ordinances or regulations; strikes, lock-outs or other
serious labor disputes; and floods, fires, explosions, or other natural
disasters. When such events have abated, the Parties' respective obligations
hereunder shall resume.
15
<PAGE> 19
IN WITNESS WHEREOF, each of the undersigned have caused this Agreement to
be executed by their duly authorized representatives.
CAMBRIDGE NEUROSCIENCE PARTNERS, INC.
By: /s/ R.N. McBurney Date
---------------------------------------- -------------------
Name: R.N. McBurney
---------------------------------------
(please print)
Title: President
-------------------------------------
THE J. DAVID GLADSTONE INSTITUTE
By: /s/ Richard S. Brawerman Date
---------------------------------------- -------------------
Richard S. Brawerman, Trustee
By: /s/ Albert A. Dorman Date
---------------------------------------- -------------------
Albert A. Dorman, Trustee
By: /s/ Richard D. Jones Date
---------------------------------------- -------------------
Richard D. Jones, Trustee
I have read and agree to the terms and conditions of this Agreement:
By: /s/ Dr. Robert W. Mahley Date
---------------------------------------- -------------------
Dr. Robert W. Mahley
Principal Investigator
16
<PAGE> 20
CAMBRIDGE NEUROSCIENCE, INC. agrees to guarantee performance of CNPI's financial
obligations under Section 8.3(a) and Articles 4, 6 and 9 of this Agreement.
By:/s/ Elkan Gamzu Date
---------------------------------------- -------------------
Name: Elkan Gamzu
--------------------------------------
(please print)
Title: President and CEO
-------------------------------------
17
<PAGE> 21
Confidential material ommitted and filed separately with the Securities and
Exchange Commisssion. Asterisks denote such ommissions.
Exhibit A
---------
GLADSTONE INSTITUTE OF CARDIOVASCULAR DISEASE
CAMBRIDGE NEUROSCIENCE PROPOSAL
This proposal represents an integrated approach for a drug discovery
program targeting populations that will likely include: Alzheimer's disease,
stroke, head trauma, central nervous system infections, and age-associated
cognitive decline. The proposal is based on the concept that apolipoprotein
(apo-)E plays a critical role in a final common pathway in neuronal
repair/remodeling (Figure 1). The proposed drug development program is based on
the following hypotheses that have resulted from the research of Gladstone
investigators.
************************************
- 1 -
<PAGE> 22
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
************************************
- 2 -
<PAGE> 23
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
***********************************
- 3 -
<PAGE> 24
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
************************************
- 4 -
<PAGE> 25
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
***********************************
- 5 -
<PAGE> 26
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
************************************
- 6 -
<PAGE> 27
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
***********************************
- 7 -
<PAGE> 28
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
************************************
- 8 -
<PAGE> 29
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
***********************************
- 9 -
<PAGE> 30
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
************************************
- 10 -
<PAGE> 31
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
***********************************
- 11 -
<PAGE> 32
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
************************************
- 12 -
<PAGE> 33
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
***********************************
- 13 -
<PAGE> 34
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
<TABLE>
BUDGET
<CAPTION>
I. Scientific Staff
% effort
--------
<S> <C> <C> <C>
Robert W. Mahley, M.D., Ph.D. *** Project Director
Karl H. Weisgraber, Ph.D. *** Co-investigator
Robert E. Pitas, Ph.D. *** Co-investigator
Lennart Mucke, M.D. *** Co-investigator
******
II. Support Staff
Supervisor % effort Salary
---------- -------- ------
Hassibullah Akeefe Mahley/Pitas **** *****
Research Associate
Manuel Buttini, Ph.D. Mucke **** *****
Postdoctoral Fellow
Francine Compagno Mucke **** *****
Research Associate
Mark Holm, M.D. Mahley/Pitas **** *****
Postdoctoral Fellow
Yvonne M. Newhouse Weisgraber **** *****
Senior Research Associate
Stephen J. Russell Weisgraber **** *****
Research Associate
Lubica Supekova, Ph.D. Mahley/Pitas **** *****
Postdoctoral Fellow
Anton Wyss-Coray, Ph.D. Mucke **** *****
Staff research Investigator
Xiao, Xu, M.D., Ph.D. Mucke **** *****
Postdoctoral Fellow
Postdoctoral Fellow, TBN Weisgraber **** *****
(X-ray crystallography)
Postdoctoral Fellow, TBN Pitas **** *****
(cell biology)
Postdoctoral Fellow, TBN Mucke **** *****
(transgenic models)
*****
III. Supplies
************************ *****
************************ *****
************************ *****
************************ *****
************************ *****
************************ *****
- 14 -
</TABLE>
<PAGE> 35
Confidential material ommitted and filed separately with the Securities
and Exchange Commisssion. Asterisks denote such ommissions.
*****
(Approximately 12 full-time staff assigned to this
program--supply budget represents about *******
per research associate/postdoctoral fellow/scientist)
IV. Animal Models
Animal purchases and per diem costs *****
V. X-ray Crystallography Support Servies
(Lawrence Livermore National Laboratory)
Personnel % effort
--------- --------
B.Rupp, Ph.D. **** *****
S. Parkin, Ph.D. **** *****
*****
Supplies *****
Organization facility charge *****
*****
Total direct cost *****
Indirect cost *****
Total *****
VI. Travel
Travel to research meetings with Cambridge NeuroScience scientists:
4 investigators x *** trips @ ****** each *****
Total Gladstone direct costs *****
Gladstone indirect costs (benefits, overhead) *****
TOTAL *****
Budget for Year 02
Year 01 plus **** adjustment for inflation *****
Budget for Year 03
Year 02 plus **** adjustment for inflation *****
* Notwithstanding the above totals, NCPI's funding obligations are limited to
the amounts set forth in Section 4.1 of the Agreement.
- 15 -
<PAGE> 36
FF
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
BIOGRAPHICAL SKETCH
Provide the following information for the key personnel in the order listed on
Form Page 2. Photocopy this page or follow this format for each person.
- --------------------------------------------------------------------------------
NAME POSITION TITLE
Robert W. Mahley Director
- --------------------------------------------------------------------------------
EDUCATION/TRAINING (Begin with baccalaureate or other initial professional
education, such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
DEGREE
INSTITUTION AND LOCATION (if applicable) YEAR(S) FIELD OF STUDY
- --------------------------------------------------------------------------------
Maryville College, Maryville, TN B.S. 1963
Vanderbilt University, Nashville, TN Ph.D. 1968 Pathology/Anatomy
Vanderbilt University, Nashville, TN M.D. 1970
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE: Concluding with present position, list,
in chronological order, previous employment, experience, and honors. Include
present membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. If the list of publications in the
last three years exceeds two pages, select the most pertinent publications. DO
NOT EXCEED TWO PAGES.
EMPLOYMENT AND EXPERIENCE
1963-1964 Instructor of Biology, Maryville College, Maryville, TN
1964-1970 Combined M.D.-Ph.D. program at Vanderbilt University,
Nashville, TN
1970-1971 Internship, Pathology, Vanderbilt University, Nashville, TN
1971-1975 Staff, National Heart, Lung and Blood Institute, NIH,
Bethesda, MD
1975-1979 Head, Comparative Atherosclerosis and Arterial Metabolism
Section, Laboratory of Experimental Atherosclerosis, National
Heart, Lung and Blood Institute, NIH, Bethesda, MD
1979-Present Director, Gladstone Institute of Cardiovascular Disease;
Senior Staff Member, Cardiovascular Research Institute, and
Professor of Pathology and Medicine, University of California,
San Francisco, CA
1992-Present President, The J. David Gladstone Institutes
PROFESSIONAL SOCIETIES AND HONORS
Association of American Physicians; American Society for Clinical Investigation;
American Society of Biological Chemistry; International Academy of Pathology;
American Heart Association (AHA); Merrill Award in Experimental Pathology;
Bordon Award for Basic Medical Research; Vivian B. Allen Medical Scholarship;
Pfizer Traveling Fellows; Heinrich Wieland Prize; Chairman, Program Committee of
Council on Arteriosclerosis (AHA); Chairman, Gordan Conference on Lipid
Metabolism; Editorial Boards: Journal of Lipid Research, Journal of Clinical
Investigation, and Journal of Clinical Investigation; Chairman, Gordon
Conference on Arteriosclerosis; George Lyman Duff Memorial Lectureship (AHA
award); National Research Committee (AHA); CIBA-GEIGY Drew Award in Biomedical
Research; Metropolitan Life Foundation Award for Medical Research; Honorary
Degree of Doctor of Medicine, University of Goteborg, Goteborg, Sweden; National
Cholesterol Education Program DeWitt S. Goodman Award for Basic Science
Achievement.
PUBLICATIONS (selected recent publications)
1. Mahley, R.W. (1988 Apolipoprotein E: Cholesterol transport protein with
expanding role in cell biology. Science 240: 622-630.
2. Boyles, J.K., Zoellner, C.D., Anderson, L.J., Kosik, L.M., Pitas, R.E.,
Weisgraber, K.H., Hui, D.Y., Mahley, R.W., Gebicke-Haerter, P.J., Ignatius,
M.J., and Shooter, E.M. (1989) A role for apolipoprotein E, apolipoprotein
A-I, and low density lipoprotein receptors in cholesterol transport during
regeneration and remyelination of the rat sciatic nerve. J. Clin. Invest.
83: 1015-1031.
3. Mahley, R.W., Hui, D.Y., Innerarity, T.L., and Beisiegel U. (1989)
Chylomicron remnant metabolism. Role of hepatic lipoprotein receptors in
mediating uptake. Arteriosclerosis 9: I-14--I-8.
4. Hussain, M.M., Mahley, R.W., Boyles, J.K., Fainaru, M., BRECHT, W.J., and
Lindquist, P. (1989) Chylomicronchyomicron remnant clearance by liver and
bone marrow in rabbits. Factors that modify tissue-specific uptake. J.
Biol. Chem. 264: 9571--9582.
5. Hussain, M.M., Mahley, R.W., Boyles, J.K., Lindquist, P.A., Brecht, W.J.,
and Innerarity, T.L. (1989) Chylomicron metabolism. Chylomicron uptake by
bone marrow in different animal species. J. Biol. Chem. 264: 17931--17938.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) (Form Page 6) Page 16 FF
----
Number pages consecutively at the bottom throughout the application.
Do NOT use suffixes such as 3a, 3b.
<PAGE> 37
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
6. Mahley, R.W., Weisgraber, K.H., Hussain, M.M., Greenman, B., Fisher, M.,
Vogel, T., and Gorecki, M. (1989) Intravenous infusion of apolipoprotein E
accelerates clearance of plasma lipoproteins in rabbits. J. Clin. Invest.
83: 2125--2130.
7. Weisgraber, K.H., Mahley, R.W., Kowal, R.C., Herz, J., Goldstein, J.L., and
Brown, M.S. (1990) Apolipoprotein C-I modulates the interaction of
apolipoprotein E with (beta)-migrating very low density lipoproteins
((beta)-VLDL) and inhibits binding of (beta)-VLDL to low density
lipoprotein receptor-related protein. J. Biol. Chem. 265: 22453--22459.
8. Innerarity, T.L., Mahley, R.W., Weisgraber, K.H., Bersot, T.P., Krauss,
R.M., Vega, G.L., Grundy, S.M., Friedl, W., Davignon, J., and McCarthy,
B.J. (1990) Familial defective apolipoprotein B100: A mutation of
apolipoprotein B that causes hypercholesterolemia. J. Lipid Res. 31:
1337--1349.
9. Mahley, R.W., Weisgraber, K.H., Innerarity, T.L., and Rall, S.C., Jr.
(1991) Genetic defects in lipoprotein metabolism. Elevation of atherogenic
lipoproteins caused by impaired catabolism. J. Am. Med. Assoc. 265: 78--83.
10. Hussain, M.M., Maxfield, F.R., Mas-Oliva, J., Tabas, I., JI, Z.-S.,
Innerarity, T.L., and Mahley, R.W. (1991) Clearance of chylomicron remnants
by the low density lipoprotein receptor-related
protein/[alpha]2-macroglobulin receptor. J. Biol. Chem. 266: 13936--13940.
11. Wilson, C., Wardell, M.R., Weisgraber, K.H., Mahley, R.W., and Agard, D.A.
(1991) Three-dimensional structure of the LDL receptor-binding domain of
human apolipoprotein E. Science 252: 1817--1822.
12. Handelmann, G.E., Boyles, J.K., Weisgraber, K.H., Mahley, R.W., and Pitas,
R.E. (1992) Effects of apolipoprotein E, (beta)-very low density
lipoproteins, and cholesterol on the extension of neurites by rabbit dorsal
root ganglion neurons in vitro. J. Lipid Res. 33: 1677--1688.
13. Ji, Z-S., Brecht, W.J., Miranda, R.D., Hussain, M.M., Innerarity, T.L., and
Mahley, R.W. (1993) Role of heparan sulfate proteoglycans in the binding
and uptake of apolipoprotein E-enriched remnant lipoproteins by cultured
cells. J. Biol. Chem. 268: 10160--10167.
14. Ji, Z.-S., Fazio, S., Lee, Y.-L., and Mahley, R.W. (1994) Secretion-capture
role for apolipoprotein E in remnant lipoprotein metabolism involving cell
surface heparan sulfate proteoglycans. J. Biol. Chem. 269: 2764--2772.
15. Ji, Z-S., Fazio, S., and Mahley, R.W. (1994) Variable heparan sulfate
proteoglycan binding of apolipoprotein E variants may modulate the
expression of type III hyperlipoproteinemia. J. Biol. Chem. 269:
13421--13428.
16. Nathan, B.P., Bellosta, S., Sanan, D.A., Weisgraber, K.H., Mahley, R.W.,
and Pitas, R.E. (1994) Differential effects of apolipoprotein E3 and E4 on
neuronal growth in vivo. Science 264: 850--852.
17. Dong, L.-M., Wilson, C., Wardell, M.R., Simmons, T., Mahley, R.W.,
Weisgraber, K.H., and Agard, D.A. (1994) Human apolipoprotein E. Role of
arginine 61 in mediating the lipoprotein preferences of the E3 and E4
isoforms. J. Biol. Chem. 269: 22358--22365.
18. Ji, Z.-S., Sanan, D.A., and Mahley, R.W. (1995) Intravenous heparinase
inhibits remnant lipoprotein clearance from the plasma and uptake by the
liver: In vivo role of heparan sulfate proteoglycans. J. Lipid Res. 36:
583--592.
19. Mahley, R.W., Nathan, B.P., Bellosta, S., and Pitas, R.E. (1995)
Apolipoprotein E: Impact of cytoskeletal stability in neurons and the
relationship to -- Alzheimer's disease. Curr. Opin. Lipidol. 6: 86--91.
20. Bellosta, S., Mahley, R.W., Sanan, D.A., Murata, J., Newland, D.L., Taylor,
J.M., and Pitas, R.E. (1995) Macrophage-specific expression of human
apolipoprotein E reduces atherosclerosis in hypercholesterolemic
apolipoprotein E-null mice. J. Clin. Invest. 96: 2170--2179.
21. Nathan, B.P., Chang, K.-C., Bellosta, S., Brisch, E., Ge, N., Mahley, R.W.,
and Pitas, R.E. (1995) The inhibitory effect of apolipoprotein E4 on
neurite outgrowth is associated with microtubule depolymerization. J. Biol.
Chem. 270: 19791--19799.
22. Holtzman, D.M., Pitas, R.E., Kilbridge, J., Nathan, B., Mahley, R.W., Bu,
G., and Schwartz, A.L. (1995) Low density lipoprotein receptor-related
protein mediates apolipoprotein E-dependent neurite outgrowth in a central
nervous system-derived neuronal cell line. Proc. Natl. Acad. Sci. USA 92:
9480--9484.
23. Bellosta, S., Nathan, B.P., Orth, M., Dong, L-M., Mahley, R.W., and Pitas,
R.E. (1995) Stable expression and secretion of apolipoproteins E3 and E4 in
mouse neuroblastoma cells produces differential effects on neurite
outgrowth. J. Biol. Chem. 270: 27063--27071.
24. Mahley, R.W., Nathan, B.P., and Pitas, R.E. Apolipoprotein E: Structure,
function, and possible roles in Alzheimer's disease. Ann. N.Y. Acad. Sci.
In press.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) Page 17
---
Number pages consecutively at the bottom throughout the application. Do NOT use
suffixes such as 3a, 3b.
<PAGE> 38
FF
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
BIOGRAPHICAL SKETCH
Provide the following information for the key personnel in the order listed
on Form Page 2. Photocopy this page or follow this format for each person.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME POSITION TITLE
Karl H. Weisgraber Senior Scientist, Associate Director
- --------------------------------------------------------------------------------
EDUCATION/TRAINING (Begin with baccalaureate or other initial professional
education, such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
DEGREE
INSTITUTION AND LOCATION (if applicable) YEAR(S) FIELD OF STUDY
- --------------------------------------------------------------------------------
University of Connecticut, Storrs, CT B.A. 1964 Chemistry
University of Connecticut, Storrs, CT Ph.D. 1969 Organic
Chemistry
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE: Concluding with present position, list, in
chronological order, previous employment, experience, and honors. Include
present membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. If the list of publications in the
last three years exceeds two pages, select the most pertinent publications. DO
NOT EXCEED TWO PAGES.
EMPLOYMENT AND EXPERIENCE
1969-1970 Staff Fellow, National Institute of Arthritis, Metabolism and
Digestive Diseases, Bethesda, MD
1970-1971 National Research Council Postdoctoral Research Associate,
Agricultural Research Service USDA, Pasadena, CA
1972 Principal Scientist, Meloy Laboratories, Springfield, VA
1972-1976 Senior Staff Fellow, National Heart and Lung Institute, Bethesda,
MD
1976-1979 Expert, National Heart, Lung and Blood Institute, Bethesda, MD
1979-1981 Assistant Professor, Department of Pathology, Associate Staff
Member, Cardiovascular Research Institute, University of
California, San Francisco, CA
1981-1987 Associate Professor, Department of Pathology, University of
California, San Francisco, CA
1979-Present Senior Scientist, Gladstone Institute of Cardiovascular Disease,
San Francisco, CA
1981-Present Senior Staff Member, Cardiovascular Research Institute, University
of California, San Francisco, CA
1982-Present Associate Director, Gladstone Institute of Cardiovascular Disease,
San Francisco, CA
1987-Present Professor, Department of Pathology, University of
California, San Francisco, CA
PROFESSIONAL SOCIETIES AND HONORS
Metropolitan Life Foundation Award for Medical Research-1994; Merck Frosst
Canada Distinguished Lecturer-1993; Clinical Institute of Montreal Distinguished
Lecturer-1983; NIH Physiological Chemistry Study Section 1993-1995; Chairman,
American Heart Association (AHA) AHA Arteriosclerosis Council Nominating
Committee 1993-1995; Chair, AHA Arteriosclerosis Council Credentials Committee
1984-1986; Editorial Board Member of Arteriosclerosis, Thrombosis, and Vascular
Biology and the Journal of Lipid Research; AHA Arteriosclerosis Council Fellow;
National Research Council Postdoctoral Research Associate; American Association
for the Advancement of Science; American Chemical Society; New York Academy of
Sciences; American Society for Biochemistry and Molecular Biology; American
Crystallographic Association.
PUBLICATIONS (selected recent publications)
1. Weisgraber, K.H., Rall, S.C., and Mahley, R.W. (1981) Human E apoprotein
heterogeneity. Cysteine-arginine interchanges in the amino acid sequence of
the apo-E isoforms. J. Biol. Chem. 256: 9077--9083.
2. Rall, S.C., Jr., Weisgraber, K.H., and Mahley, R.W. (1982) Human
apolipoprotein E: The complete amino acid sequence. J. Biol. Chem. 257:
4171--4178.
3. Weisgraber, K.H., Innerarity, T.L., Harder, K.J., Mahley, R.W., Milne,
R.W., Marcel, Y.L., and Sparrow, J.T. (1983) The receptor binding domain of
human apolipoprotein E: Monoclonal antibody inhibition of binding. J. Biol.
Chem. 258: 12348--12354.
4. Weisgraber, K.H., Rall, S.C., Jr., Mahley, R.W., Milne, R.W., Marcel, Y.L.,
and Sparrow, J.T. (1986) Human apolipoprotein E: Determination of the
heparin binding sites of apolipoprotein E3. J. Biol. Chem. 261: 2068--2076.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) (Form Page 6) Page 18 FF
----
Number pages consecutively at the bottom throughout the application.
Do NOT use suffixes such as 3a, 3b.
<PAGE> 39
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
5. Wetterau, J.R., Aggerbeck, L.P., Rall, S.C., Jr., and Weisgraber, K.H.
(1988) Human apolipoprotein E3 in aqueous solution. I. Evidence for two
structural domains. J. biol. Chem. 263: 6240--6248.
6. Aggerbeck, L.P., Wetterau, J.R., Weisgraber, K.H., Wu, C.-S.C., and
Lindgren, F.T. (1988) Human apolipoprotein in aqueous solution. II.
Properties of the amino-and carboxyl-terminal domains. J. Biol. Chem. 263:
6249--6258.
7. Weisgraber, K.H., Mahley, R.W., Kowal, R.C., Herz, J., Goldstein, J.L., and
Brown, M.S. (1990) Apolipoprotein C-I modulates interaction of
apolipoprotein E with (beta)-migrating very low density lipoproteins
((beta)-VLDL) and inhibits binding of (beta)-VLDL to low density
lipoprotein receptor-related protein. J. Biol. Chem. 265: 22453--22459.
8. Weisgraber, K.H. (1990) Apolipoprotein E distribution among human plasma
lipoproteins: Role of the cysteine-arginine interchange at residue 112. J.
Lipid Res. 31: 1503--1511.
9. Wilson, C., Wardell, M.R., Weisgraber, K.H., Mahley, R.W., and Agard, D.A.
(1991) Three-dimensional structure of the LDL receptor-binding domain of
human apolipoprotein E. Science 252: 1817--1822.
10. Westerlund, J.A., and Weisgraber, K.H. (1993) Discrete carboxyl-terminal
segments of apolipoprotein E mediate lipoprotein association and protein
oligomerization. J. Biol. Chem. 268: 15745--15750.
11. Weisgraber, K.H. (1994) Apolipoprotein E: structure-function relationships.
Adv. Protein Chem. 45: 249--302.
12. Strittmatter, W.J., Weisgraber, K.H., Huang, D., Dong, L.-M., Salvesen,
G.S., Pericak-Vance, M., Schmechel, D., Saunders, A.M., Goldgaber, D., and
Roses, A.D. (1993) Binding of (beta)A4 peptide to human apolipoprotein E:
Isoform-specific effects and implications for late-onset Alzheimer disease.
Proc. Natl. Acad. Sci. USA. 90: 8098--8102.
13. Weisgraber, K.H., Roses, A.D., and Strittmatter, W.J. (1994) The role of
apolipoprotein E in the nervous system. Curr. Opin. Lipidol. 5: 110--116.
14. Srittmatter, W.J., Weisgraber, K.H., Goedert, M., Saunder, A.M., Huang, D.,
Corder, E.H., Dong. L.-M., Jakes, R., Albers, M.J., Gilbert, J.R., Han,
S.-H., Hulette, C., Einstein, G., Schmechel, D.E., Pericak-Vance, M.A., and
Roses, A.D. (1994) Hypothesis: Microtubule instability and paired helical
filament formation in the Alzheimer disease brain as a function of
apolipoprotein E genotype. Exp. Neurol. 125: 163--171.
15. Nathan, B.P., Bellosta, S., Sanan, D.A., Weisgraber, K.H., Mahley, R.W.,
and Pitas, R.E. (1994) Differential effects of apolipoproteins E3 and E4 on
neuronal growth in vivo. Science 264: 850--852.
16. Dong, L.-M., Wilson, C., Wardell, M.R., Simmons, T., Mahley, R.W.,
Weisgraber, K.H., and Agard, D.A. (1994) Human apolipoprotein E: The role
of arginine-61 in mediating the lipoprotein preferences of the E3 and E4
isoforms. J. Biol. Chem. 269: 22358--22365.
17. Sanan, D.A., Weisgraber, K.H., Russel, S.J., Mahley, R.W., Huang, D.,
Saunders, A., Schmechel, D., Wisniewski, T., Frangione, B., Roses, A.D.,
and Strittmatter, W.J. (1994) Apolipoprotein E associates with (beta)
amyloid peptide of Alzheimer's disease to form novel monofibrils: Isoform
apoE4 associates more efficiently than aopE3. J. Clin. Invest. 94:
860--869.
18. Strittmatter, W.J., Saunders, A.M., Goedert, M., Weisgraber, K.H., Dong,
L.-M., Jakes, R., Huang, D., Pericak-Vance, M., Schmechel, D., and Roses,
A.D. (1994) Isoform-specific interactions of apolipoprotein E with
microtubule-associated protein tau: Implications for Alzheimer disease.
Proc. Natl. Acad. Sci. USA. 91: 11183--11186.
19. Wilson, C., T. Mau, Weisgraber, K.H., Wardell, M.R., Mahley, R.W., and
Agard, D.A. (1994) Salt bridge relay triggers defective LDL receptor
binding by a mutuant apolipoprotein. Structure 2: 713--718.
20. Weisgrabe, K.H., Pitas, R.E., and Mahley, R.W. (1994) Lipoproteins,
neurobiology, and Alzheimer's disease: Structure and function of a
apolipoprotein E. Curr. Opin. Struct. Biol. 4: 507-515.
21. Weisgraber, K.H., Newhouse, Y.M., and McPherson, A. (1994) Crystallization
and preliminary X-ray analysis of human plasma apolipoprotein C-I. J. Mol.
Biol. 236: 282--384.
22. Evans, K.C., Berger, E.P., Cho. C.-G., Weisgraber, K.H., and Lansbury,
P.T., Jr. (1995) Apolipoprotein E is a kinetic but not a thermodynamic
inhibitor of amyloid formation: Implications for the pathogenesis and
treatment of Alzheimer disease. Proc. Natl. Acad. Sci. USA 92: 763--767.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) Page 19
---
Number pages consecutively at the bottom throughout the application. Do NOT use
suffixes such as 3a, 3b.
<PAGE> 40
FF
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- -------------------------------------------------------------------------------
BIOGRAPHICAL SKETCH
Provide the following information for the key personnel in the order listed on
Form Page 2. Photocopy this page or follow this format for each person.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME POSITION TITLE
Robert E. Pitas Senior Scientist
- --------------------------------------------------------------------------------
EDUCATION/TRAINING (Begin with baccalaureate or other initial professional
education, such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
DEGREE
INSTITUTION AND LOCATION (if applicable) YEAR(S) FIELD OF STUDY
- --------------------------------------------------------------------------------
University of Rhode Island, Kingston, RI B.S. 1965 Chemistry
University of Connecticut, Storrs, CT Ph.D. 1976 Nutrition/
Biochemistry
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE: Concluding with present position, list, in
chronological order, previous employment, experience, and honors. Include
present membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. If the list of publications in the
last three years exceeds two pages, select the most pertinent publications. DO
NOT EXCEED TWO PAGES.
EMPLOYMENT AND EXPERIENCE
1969-1970 Research Assistant I, Department of Animal Industries, University
of Connecticut, Storrs, CT
1973-1976 Research Assistant II, Department of Nutritional Sciences,
University of Connecticut, Storrs, CT
1976-1979 Principal Scientist, Meloy Laboratories, Inc., Springfield, VA
1979-1984 Assistant Professor, Department of Pathology, University of
California, San Francisco, CA
1979-Present Senior Scientist, Gladstone Institute of Cardiovascular Disease,
San Francisco, CA
1984-Present Associate Staff Member, Cardiovascular Research Institute,
University of California, San Francisco, CA
1984-1991 Associate Professor, Department of Pathology, University of
California, San Francisco, CA
1991-Present Professor, Department of Pathology, University of California,
San Francisco, CA
PROFESSIONAL SOCIETIES AND HONORS
Honored Student Award from American Oil Chemists' Society; American Heart
Association-Arteriosclerosis Council; American Institute of Nutrition; Member,
Society for Neuroscience; Sigma Xi; Index Editor for the journal Lipids,
1978-1986; Associate Editor for the journal Lipids, 1986-present.
PUBLICATIONS (selected recent publications)
1. Pitas, R.E., Innerarity, T.L., Arnold, K., and Mahley, R.W. (1979) Rate and
equilibrium constants for binding of apo-E HDLc (a cholesterol-inducted
lipoprotein) and low density lipoproteins to human fibroblasts: Evidence
for multiple receptor binding of apo-E HDLc. Proc. Natl. Acad. Sci. U.S.A.
76: 2311--2315.
2. Pitas, R.E., Innerarity, T.L., and Mahley, R.W. (1980) Cell surface
receptor binding of phospholipid protein complexes containing different
ratios of receptor-active and -inactive E apoprotein. J. Biol. Chem. 255:
5454--5460.
3. Pitas, R.E., Boyles, J., Mahley, R.W., and Bissell, D.M. (1985) Uptake of
chemically modified low density lipoproteins in vivo is mediated by
specific endothelial cells. J. Cell Biol. 100: 103--117.
4. Ignatius, M.M., Shooter, E.M., Pitas, R.E., and Mahley, R.W. (1987)
Lipoprotein uptake by neuronal growth cones in vitro. Science 236:
959--962.
5. Pitas, R.E., Boyles, J.K., Lee, S.H., Hui, D., and Weisgraber, K.H. (1987)
Lipoproteins and their receptors in the central nervous system:
Characterization of the lipoproteins in cerebrospinal fluid an
identification of apolipoprotein B,E (low density lipoprotein) receptors in
brian. J. Biol. Chem. 262: 14352--14360.
6. Pitas, R.E., Boyles, J.K. Lee, S.H., Hui, D., and Mahley, R.W. (1987)
Astrocytes synthesize apolipoprotein E and metabolize apolipoprotein
E-containing lipoproteins. Biochim. Biophys. Acta 917: 148-161.
7. Boyles, J.K. Zoellner, C.D., Anderson, L.J., Kosik, L.M., Pitas, R.E.,
Weisgraber, K.H., Hui, D.Y., Mahley, R.W., Gebicke-Haerter, P.J., Ignatius,
M.J., and Shooter, E.M. (1989) A role for apolipoprotein E, apolipoprotein
A-I, and low density lipoprotein receptors in cholesterol transport during
regeneration and remyelination of the rat sciatic nerve. J. Clin. Invest.
83: 1015--1031.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) (Form Page 6) Page 20 FF
----
Number pages consecutively at the bottom throughout the application.
Do NOT use suffixes such as 3a, 3b.
<PAGE> 41
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
8. Simonet, W.S., Bucay, N., Lauer, S.J., Wirak, D.O., Stevens, M.E.,
Weisgraber, K.H., Pitas, R.E., and Taylor, J.M. (1990) In the absence of a
downstream element, the apolipoprotein E gene is expressed at high levels
in kidneys of transgenic mice. J. Biol. Chem. 265: 10809--10812.
9. Pitas, R.E. (1990) Expression of the acetyl low density lipoprotein
receptor by rabbit fibroblasts and smooth muscle-cells: Up-regulation by
phorbol esters. J Biol. Chem. 265: 12722--12727.
10. Simonet, W.S., Bucay, N., Pitas, R.E., Lauer, S.J., and Taylor, J.M. (l99l)
Multiple tissue-specific elements control the apolipoprotein E/C-I gene
locus in transgenic mice. J. Biol. Chem. 266: 8651--8654.
11. Arnold, K.S., Innerarity, T.L., Pitas, R.E., and Mahley, R.W. (1992)
Lipoprotein-receptor interactions. In: Lipoprotein Analysis. A Practical
Approach. Converse, C.A. and Skinner, E.R. eds. Oxford University Press,
Oxford, England. pp. 145-168.
12. Pitas, R.E., and Mahley, R.W. (1992) Analysis of tissue lipoproteins. In:
Lipoprotein Analysis. A Practical Approach. Converse, C.A. and Skinner,
E.R., eds. Oxford University Press, Oxford, England. pp. 215--242.
13. Handelmann, G.E., Boyles, J.K., Weisgraber, K.H., Mahley, R.W., and Pitas,
R.E. (1992) Effects of apolipoprotein E, B-very low density lipoproteins,
and cholesterol on the extension of neurites by rabbit dorsal root ganglion
neurons in vitro. J. Lipid Res. 33: 1677--1688.
14. Pitas, R.E., Friera, A., McGuire, J., and Dejager, S. (1992) Further
characterization of the acetyl LDL (scavenger) receptor expressed by rabbit
smooth muscle cells and fibroblasts. Arterioscler. Thromb. 12: 1235--1244.
15. Lee, K.-D., Pitas, R.E., and Papahadjopoulos, D. (1992) Evidence that the
scavenger receptor is not involved in the uptake of negatively charged
liposomes by cells. Biochim. Biophys. Acta 1111: 1--6.
16. Dejager, S., Mietus-Snyder, M., and Pitas, R.E. (1993) Oxidized low density
lipoproteins bind to the scavenger receptor expressed by rabbit smooth
muscle cells and macrophages. Arterioscler. Thromb. 13: 371--378.
17. Dejager, S., Mietus-Snyder, M., Friera, A., and Pitas, R.E. (1993) Dominant
negative mutations of the scavenger receptor: Native receptor inactivation
by expression of truncated variants. J. Clin. Invest. 92: 894--902.
18. Mas-Oliva, J., Arnold, K.S., Wagner, W.D., Phillips, D.R., Pitas, R.E., and
Innerarity, T.L. (1994) Isolation and characterization of a
platelet-derived macrophage-binding proteoglycan. J. Biol. Chem. 269:
10177--10183.
19. Nathan, B.P., Bellosta, S., Sanan, D.A., Weisgraber, K.H., Mahley, R.W.,
and Pitas, R.E. (1994) Differential effects of apolipoproteins E3 and E4 on
neuronal growth in vitro. Science 264: 850--852.
20. Weisgraber, K.H., Pitas, R.E., and Mahley, R.W. (1994) Lipoproteins,
neurobiology, and Alzheimer's disease: Structure and function of
apolipoprotein E. Curr. Opin. Struct. Biol. 4: 507--515.
21. Mahley, R.W., Nathan, B.P., Bellosta, S., and Pitas, R.E. (1995)
Apolipoprotein E: Impact of cytoskeletal stability in neurons and the
relationship to Alzheimer's disease. Curr. Opin. Lipidol. 6: 86--91.
22. Nathan, B.P., Chang, K-C., Bellosta, S., Brisch, E., Ge, N., Mahley, R.W.,
and Pitas, R.E. (1995) The inhibitory effect of apolipoprotein E4 on
neurite outgrowth is associated with microtubule depolymerization. J. Biol.
Chem. 270: 19791--19799.
23. Gong, Q. and Pitas, R.E. (1995) Synergistic effects of growth factors on
the regulation of smooth muscle cell scavenger receptor activity. J. Biol.
Chem. 270: 21670--21678.
24. Holtzman, D.M., Pitas, R.E., Kilbridge, J., Nathan, B., Mahley, R.W., Bu,
G., and Schwartz, A.L. (1995) LRP mediates apolipoprotein E-dependent
neurite outgrowth in a CNS-derived neuronal cell line. Proc. Natl. Acad.
Sci. USA. 92: 9480--9484.
25. Bellosta, S., Nathan, B.P., Orth, M., Dong, L.-M., Mahley, R.W., and Pitas,
R.E. (1995) Stable expression and secretion of apolipoproteins E3 and E4 in
mouse neuroblastoma cells produces differential effects on neurite
outgrowth. J. Biol. Chem. 270: 27063--27071.
26. Weisgraber, K.H., Pitas, R.E., and Mahley, R.W. (1995) Role of
apolipoprotein E in Alzheimer's disease. In: Atherosclerosis X. Woodford,
F.P., Davignon, J., and Sniderman, A., eds. Elsevier Science Publishers,
Amsterdam. pp. 670-674.
27. Young, S.G., Cham, C.M., Pitas, R.E., Burri, B.J., Connolly, A., Flynn, L.,
Pappu, A.S., Wong, J.S., Hamilton, R.L., and Farese, R.V., Jr. (1995) A
genetic model for absent chylomicron formation: Mice producing
apolipoprotein B in the liver, but not in the intestine. J. Clin. Invest.
96: 2932--2946.
28. Mahley, R.W., Nathan, B.P., and Pitas, R.E. Apolipoprotein E: Structure,
function, and possible roles in Alzheimer's disease. Ann. N.Y. Acad. Sci.
In press.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) Page 21
---
Number pages consecutively at the bottom throughout the application. Do NOT use
suffixes such as 3a, 3b.
<PAGE> 42
FF
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
BIOGRAPHICAL SKETCH
Provide the following information for the key personnel in the order listed on
Form Page 2. Photocopy this page or follow this format for each person.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME POSITION TITLE
Lennart Mucke Scientist II/Associate Professor
- --------------------------------------------------------------------------------
EDUCATION/TRAINING (Begin with baccalaureate or other initial professional
education, such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
DEGREE
INSTITUTION AND LOCATION (if applicable) YEAR(S) FIELD OF STUDY
- --------------------------------------------------------------------------------
Freie Universitat Berlin, Germany 1976-1980 Medicine
Max-Planck-Institute for Biophysical
Chemistry, Gottingen, Germany 1979-1982 Neurobiology
Georg-August-Universitat, M.D. 1980-1982 Medicine
Gottingen, Germany
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE: Concluding with present position, list, in
chronological order, previous employment, experience, and honors. Include
present membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. If the list of publications in the
last three years exceeds two pages, select the most pertinent publications.
DO NOT EXCEED TWO PAGES.
EMPLOYMENT AND EXPERIENCE
1982-1984 Research Fellow, Department of Neurobiology, Max-Planck-Institute
for Biophysical Chemistry, Gottingen, Germany
1984-1985 Resident, Department of Internal Medicine, The Cleveland Clinic,
Cleveland, OH
1985-1988 Resident, Department to Neurology, Massachusetts General Hospital
and Harvard Medical School, Boston, MA
1988 Chief Resident, Department of Neurology, Massachusetts General
Hospital and Harvard Medical School, Boston, MA
1988-1990 Postdoctoral Fellow, Viral Immunobiology Laboratory, The Scripps
Research Institute, La Jolla, CA
1990-1994 Assistant Professor, Department of Neuropharmacology, The Scripps
Research Institute, La Jolla, CA
1994-1995 Associate Professor, Department of Neuropharmacology, The
Scripps Research Institute, La Jolla, CA
1996-Present Scientist II, Gladstone Molecular Neurobiology Program, The
Gladstone Institute of Cardiovascular
Disease, San Francisco, CA
1996-Present Associate Professor, Department of Neurology and Program in
Biological Sciences (Neuroscience Program), University of
California, San Francisco, CA
PROFESSIONAL SOCIETIES AND HONORS
Society for Neuroscience; American Society for Virology; Editorial Board,
Transgenics; Thyssen Foundation Career Development Award; National Multiple
Sclerosis Society Fellowship Award; Weil Award for the Best Paper on
Experimental Neuropathology; Alzheimer's Disease Association Faculty Scholar
Award; National Multiple Sclerosis Society Faculty Scholar Award (Harry Weaver
Neuroscience Scholarship).
BOARD CERTIFICATION
American Board of Psychiatry and Neurology
PUBLICATIONS (selected recent publications)
1. Abraham, C.R., Razzaboni, B.L., Papastoitsis, G., Picard, E., Kanemaru, K.,
Meckelein, B., and Mucke, L. (1992) Purification and cloning of brain
proteases capable of degrading the (beta)-amyloid precursor protein. Ann.
N.Y. Acad. Sci. 674: 174--179.
2. Campbell, I.L., Abraham, C.R., Masliah, E., Kemper, P., Inglis, J.D.,
Oldstone, M.B.A., and Mucke, L. (1993) Neurologic disease induced in
transgenic mice by cerebral overexpression of interleukin 6. Proc. Natl.
Acad. Sci. USA 90: 10061--10065.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) (Form Page 6) Page 22 FF
---
Number pages consecutively at the bottom throughout the application.
Do NOT use suffixes such as 3a, 3b.
<PAGE> 43
- --------------------------------------------------------------------------------
Principal Investigator/Program Director (Last, first, middle): Mahley, Robert W.
- --------------------------------------------------------------------------------
3. Mucke, L., and Eddleston, M. (1993) Astrocytes in infectious and
immune-mediated diseases of the central nervous system. FASEB J. 7:
1226--1232.
4. Mucke, L. and Rockenstein, E.M. (1993) Prolonged delivery of transgene
products to specific brain regions by migratory astrocyte grafts.
Transgenics 1: 3--9.
5. Eddleston, M.P. and Mucke, L. (1993) Molecular-profile of reactive
astrocytes. Implications for their role in neurologic disease. Neuroscience
54: 15--36.
6. Abraham,C.R., Kanemaru, K., and Mucke, L. (1993) Expression of cathepsin
G-like and [alpha]-1 antichymotrypsin-like proteins in reactive astrocytes.
Brain Res. 621: 222--232.
7. Rall, G.F., Mucke, L., Nerenberg, M., and Oldstone, M.B.A. (1994) A
transgenic mouse model to assess the interaction of cytotoxic T lymphocytes
with virally infected, class I MHC-expressing astrocytes. J. Neuroimmunol.
52: 61--68.
8. Toggas, S.M., Masliah, E., Rockenstein, E.M., Rall, G.F., Abraham, C.R.,
and Mucke, L. (1994) Central nervous system damage produced by expression
of the HIV-1 coat protein gpl20 in transgenic mice. Nature 367: 188--193.
9. Mucke, L., Masliah, E., Johnson, W.B., Ruppe, M.D., Alford, M.,
Rockenstein, E.M., Forss-Petter, S., Pietropaolo, M., Mallory, M., and
Abraham, C.R. (1994) Synaptotrophic effects of human amyloid (beta) protein
precursor in the cortex of transgenic mice. Brain Res. 666: 151--167.
10. Johnson, W.B., Ruppe, M.D., Rockenstein, E.M., Price, J., Sarthy, V.P.,
Verderber, L.C., and Mucke, L. (1995) Indicator expression directed by
regulatory sequences of the glial fibrillary acidic protein (GFAP) gene: In
vivo comparison of distinct GFAP-lacZ transgenes. Glia 13: 174--184.
11. Games, D., Adams, D., Alessandrini, R., Barbour, R., Berthelette, P.,
Blackwell, C., Carr, T., Clemens, J., Donaldson, T., Gillespie, F., Guido,
T., Hagopian, S., Johnson-Wood, K., Khan, K., Lee, M., Leibowitz, P.,
Lieberburg, I., Little, S., Masliah, E., McConlogue, L., Montoya-Zavala,
M., Mucke, L., Paganini, L., and Penniman, L. (1995) Alzheimer-type
neuropathology in transgenic mice overexpressing V717F (beta)-amyloid
precursor protein. Nature 373: 523--527.
12. Wyss-Coray, T., Feng, L., Masliah, E., Ruppe, M.D., Lee, H.S., Toggas,
S.M., Rockenstein, E.M., and Mucke, L. (1995) Increased central nervous
system production of extracellular matrix components and development of
hydrocephalus in transgenic mice overexpressing transforming growth
factor-(beta)1. Am. J. Pathol. 147: 53--67.
13. Mucke, L., Abraham, C.R., Ruppe, M.D., Rockenstein, E.M., Toggas, S.M.,
Alford, M., and Masliah, E. (1995) Protection against HIV- 1 gp120-induced
brain damage by neuronal overexpression of amyloid protein precursor (APP).
J. Exp. Med. 181: 1551--1556.
14. Rockenstein, E., McConlogue, L., Tan, H., Gordon, M., Power, M., Masliah,
E., and Mucke, L. (1995) Levels and alternative splicing of amyloid (beta)
protein-precursor (APP) transcripts in brains of transgenic mice and humans
with Alzheimer's disease. J. Biol. Chem. 270: 28257--28267.
15. Verderber, L., Johnson, W., Mucke, L., and Sarthy, V. (1995) Differential
regulation of a GFAP-lacZ transgene in retinal astrocytes and Muller cells.
-- Invest. Ophthalmol. Vis. Sci. 36: 1137--1143.
16. Mucke, L., Masliah, E., and Campbell, I.L. (1995) Transgenic models to
assess the neuropathogenic potential of HIV-1 proteins and cytokines. Curr.
-- Top. Microbiol. Immunol. 202: 187--205.
17. Rall, G.F., Mucke, L., and Oldstone, M.B.A. (1995) Consequences of
cytotoxic T lymphocyte interaction with MHC class I-expressing neurons in
-- vivo. J. Exp. Med. 182: 1201--1212.
18. Borrow, P., Cornell, J.L., Ruppe, M.D., and Mucke, L. (1995)
Immunization-induced inflammatory infiltration of the CNS in transgenic
mice expressing a foreign antigen in astrocytes. J. Neuroimmunol. 61:
133--149.
19. Toggas, S.M., Masliah, E., and Mucke, L. (1995) Memantine blocks HIV-1
gpl20-induced neuronal damage in the central nervous system of transgenic
-- mice. Brain Res. 706: 303--307.
20. Masliah, E., Mallory, M., Alford, M., Ge, N., and Mucke, L. (1995) Abnormal
synaptic regeneration in hAPP695 transgenic and apoE knockout mice. In
Research Advances in Alzheimer's Disease and Related Disorders. Iqbal, K.,
Mortimer, J., Winblad, B., and Wisniewski, H. (eds), John Wiley & Sons, pp.
405--414.
21. Mucke, L., Abraham, C.R., and Masliah, E. (1996) Neurotrophic and
neuroprotective effects of hAPP in transgenic mice. Ann. N. Y. Acad. Sci.
777: -- 82--89.
22. Wysss-Coray, T., Masliah, E., Toggas, S.M., Lee, H.S., and Mucke, L. (1996)
Dysregulation of signal transduction pathways as a potential mechanism of
nervous system alterations in HIV-1 gpl20 transgenic mice and humans with
HIV-1 encephalitis. J. Clin. Invest. 97: 789--798.
- --------------------------------------------------------------------------------
PHS 398 (Rev. 5/95) Page 23
---
Number pages consecutively at the bottom throughout the application. Do NOT use
suffixes such as 3a, 3b.
<PAGE> 1
Exhibit 99.2
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
OPTION AGREEMENT
by and among
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA,
CAMBRIDGE NEUROSCIENCE PARTNERS, INC.
and
CAMBRIDGE NEUROSCIENCE, INC.
for
METHOD FOR REDUCING APOLIPOPROTEIN E-4 INDUCED
INHIBITION OF NEURON REMODELING
UC CASE NO. 96-223
<PAGE> 2
TABLE OF CONTENTS
ARTICLE NO. PAGE NO.
BACKGROUND.............................................................1
1. DEFINITIONS.........................................................3
2. GRANT...............................................................6
3. OPTION FEE AND TERM.................................................7
4. EXERCISE OF THE OPTION..............................................8
5. TERMS OF THE PROPOSED LICENSE AGREEMENT.............................8
6. DUE DILIGENCE......................................................13
7. PATENT PROSECUTION AND MAINTENANCE.................................14
8. LIFE OF THE OPTION AGREEMENT.......................................17
9. TERMINATION FOR CAUSE..............................................18
10. USE OF NAMES AND TRADEMARKS.......................................18
11. CONFIDENTIALITY...................................................19
12. LIMITED WARRANTY..................................................20
13. INDEMNIFICATION AND INSURANCE.....................................21
14. NOTICES...........................................................22
15. ASSIGNABILITY.....................................................22
16. LATE PAYMENTS.....................................................23
17. NO WAIVER.........................................................23
18. FAILURE TO PERFORM................................................23
19. GOVERNING LAWS....................................................23
20. GUARANTEED PERFORMANCE............................................23
21. MISCELLANEOUS.....................................................24
2
<PAGE> 3
OPTION AGREEMENT FOR
Method for Reducing Apolipoprotein E4-Induced
Inhibition of Neuron Remodeling
UC Case No. 96-223
This option agreement ("Option Agreement") is effective as of this 23rd
day of December, 1996 (the "Effective Date"), by and among THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA, ("The Regents"), a California corporation, having its
statewide administrative offices at 300 Lakeside Drive, 22nd Floor, Oakland,
California 94612-3550, and Cambridge NeuroScience Partners, Inc. ("Optionee"), a
Delaware corporation, having its place of business at One Kendall Square,
Building 700, Cambridge, MA 02139, and Cambridge NeuroScience, Inc. ("CNSI"), a
Delaware corporation, having a principal place of business at One Kendall
Square, Building 700, Cambridge, MA 02139.
BACKGROUND
Certain inventions, generally characterized as and disclosed in UC Case
No. 96-223 (the "Invention"), are covered by Regents' Patent Rights (defined
below) and were made in the course of research at The J. David Gladstone
Institutes ("Gladstone"), a charitable trust with of fines located at Irvine and
San Francisco, California, by Drs. Robert W. Mahley, Robert E. Pitas and Karl H.
Weisgraber (collectively, the Inventors").
Gladstone and The Regents entered into an agreement dated June 8, 1977,
that agreement being amended on March 27, 1984, and further amended on January
21, 1986 (as amended, the "Gladstone/Regents Agreement"), establishing among
other items, that the Invention and Regents' Patent Rights shall be managed in
accordance with The Regents' policies and procedures and, as a result, the
patent applications included in Regents' Patent
3
<PAGE> 4
Rights covering the Invention are or will be assigned to The Regents, as will
any resulting issued patents, whether domestic or foreign.
Gladstone is not a party to this Option Agreement but Gladstone is granted
certain rights with regard to sponsored research under a separate Research
Agreement and with regard to equity in Optionee under a separate Stockholders'
Rights Agreement (defined below), both executed concurrently with this Option
Agreement.
Development of the Invention was sponsored in part by The National
Institutes of Health (Grant No. NHLBI-HL41633) and as a consequence this Option
Agreement, any License Agreement (defined below), and the Invention are subject
to overriding obligations to the Federal Government (including a non-exclusive,
irrevocable license to use the Invention by or on behalf of the Government
throughout the world), under 35 U.S.C. 200-212 and applicable regulations.
The Regents elected on August 22, 1996, to retain title and granted the
aforementioned licenses to the U.S. Government.
CNSI and Gladstone entered into a Secrecy Agreement relating to the
Invention dated December 4, 1995.
CNSI and The Regents entered into a Secrecy Agreement relating to the
Invention with an effective date of March 1, 1996, and further identified as UC
Control No., 97-20-1035.
Optionee is a "small business firm" as defined in Section 2 of Public Law
85-536 (15 U.S.C. 632) and a Subsidiary (defined below) of CNSI formed for the
purpose of commercializing the Invention and New Inventions (defined below),
among other things.
Optionee wishes to evaluate the Invention and New Inventions under this
Option Agreement to determine its interest in obtaining an exclusive worldwide
license in the Field of Use (defined below) under Regents' Patent Rights
covering the Invention, and in connection therewith, to obtain an exclusive
option for such a license.
4
<PAGE> 5
Optionee and Gladstone will enter concurrently into the Research Agreement
(defined below), and CNSI will guarantee the financial obligations of Optionee
under this Option Agreement and the Research Agreement as provided herein.
Optionee, CNSI, Gladstone and The Regents will also enter concurrently
into the Stockholders' Rights Agreement (defined below), and CNSI will guarantee
the performance of Optionee under same.
Pursuant to the Gladstone/Regents Agreement, Gladstone is obligated to
disclose to The Regents any and all New Inventions and to assign its rights to
any patent applications covering any New Inventions to The Regents.
Pursuant to the Research Agreement, The Regents has agreed to file patent
applications covering any and all New Inventions within the Field of Use for
which Optionee has agreed to pay the patent costs and wishes to obtain an
exclusive option for an exclusive worldwide license in the Field of Use under
Regents' Patent Rights covering any such New Inventions in the Field of Use.
The Regents wishes to grant to Optionee these options so that the
Invention and any New Inventions in the Field of Use may be developed to the
fullest extent and the benefits therefrom enjoyed by the general public.
In consideration of the promises and undertakings set forth above and
hereinafter, the parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means any corporation or other business entity in which
the Optionee owns or controls, directly or indirectly, fifty percent (50%) or
more of the outstanding stock or other voting rights entitled to elect directors
of such corporation or entity, or in which the Optionee is owned or controlled,
directly or indirectly, fifty percent (50%) or more of the outstanding stock or
other voting rights entitled to elect directors of Optionee; but in any country
where the local law does not permit foreign equity participation of fifty
percent (50%) or more, then an "Affiliate" includes any company in which the
Optionee owns or
5
<PAGE> 6
controls or is owned or controlled by, directly or indirectly, the maximum
percentage of outstanding stock or voting rights permitted by local law.
1.2 "Business Plan" means a reasonably detailed plan of development and
commercialization for Licensed Product. The Business Plan must include, but is
not limited to, an up-to-date research report identifying: proposed Licensed
Product, projected market sizes, sales, costs, profits and anticipated market
introduction dates for the Licensed Product.
1.3 "Confidential Information" means confidential and proprietary
information and materials that are designated as confidential in writing by the
providing party, whether by letter or by use of an appropriate stamp or legend,
prior to or at the same time any such information or materials are disclosed.
Notwithstanding the foregoing, materials and other information which are orally,
visually or electronically disclosed, or are disclosed in writing without an
appropriate letter, stamp or legend, shall constitute Confidential Information
if the providing party, within thirty (30) days after such disclosure, delivers
to the other party a written document or documents describing the materials and
identifying the Confidential Information.
1.4 "Field of Use" means the prophylaxis, treatment and diagnosis of any
disease or disorder of, or injury to, the nervous system relating to
Apolipoprotein E.
1.5 "License Agreement" means the exclusive worldwide license agreement
between Optionee and The Regents that may result if Optionee exercises its
option under this Option Agreement pursuant to Article 4 (EXERCISE OF THE
OPTION).
1.6 "Licensed Method" means any method that is covered by Regents' Patent
Rights, the use of which would constitute, but for the license granted to the
Licensee pursuant to this Option Agreement, an infringement of any claim within
Regents' Patent Rights.
6
<PAGE> 7
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
1.7 "Licensed Product" means any material either that is covered by
Regents' Patent Rights, that is produced by the Licensed Method, or that the use
of which would constitute, but for the license granted to the Licensee pursuant
to this Option Agreement, an infringement of any pending or issued claim within
Regents' Patent Rights.
1.8 "New Invention" means any potentially patentable invention arising
from the Research Program (as defined in the Research Agreement) which is (i)
conceived during the term of the Research Agreement by employees or agents of
Gladstone or by employees or agents of both Gladstone and Optionee/CNSI jointly
and (ii) constructively or actually reduced to practice during the term of the
Research Agreement.
1.9 **************** means **********************
(a)***************************** or (b) ***************************************
*******************************************, except for ***********************
*******************************************************************************
***************************************.
1.10 "Regents' Patent Rights" means any subject matter claimed in or
covered by any of the following: (a) ******************************************
*******************************************************************************
********;(b)*******************************************************************
*******************************************************************************
***************************** (c) The Regents' interest in patent applications
covering New Inventions and properly elected under Section 7.8 hereof; and (d)
divisions, continuations, substitutions, continuation-in-part applications and
any patents or reissues issuing on these applications, and any corresponding
foreign applications or patents
7
<PAGE> 8
of any of the foregoing.
1.11 "Research Agreement" means the sponsored research and collaboration
agreement by and between Gladstone and Optionee executed on the Effective Date
and attached to this Option Agreement as Appendix A, to fund further research by
the Inventors at Gladstone.
1.12 "Stockholders' Rights Agreement" means the agreement entitled
"Stockholders' Rights Agreement" between Optionee, CNSI, The Regents and
Gladstone defining certain rights with respect to the securities of Optionee
executed concurrently with this Option Agreement.
1.13 "Subsidiary" means a corporation in which: (a) another corporation
owns at least the majority of the outstanding shares of capital stock or (b)
another corporation has the power to direct or cause the direction of the
management and policies or the power to elect or appoint fifty percent (50%) or
more of the members of the governing body.
2. GRANT
2.1 The Regents grants to Optionee under Regents' Patent Rights, subject
to Section 2.6, the exclusive right to make and use Licensed Product and to
practice the Licensed Method within the Field of Use for the sole purpose of
evaluating Optionee's interest in exercising its option to an exclusive
worldwide license under Regents' Patent Rights within the Field of Use, as
described below.
2.2 The Regents grants to Optionee the exclusive option to negotiate, in
good faith, the terms of the License Agreement subject to the provisions of
Article 4 (EXERCISE OF THE OPTION).
8
<PAGE> 9
2.3 This Option Agreement and the Research Agreement constitute Optionee's
entire interest under Regents' Patent Rights and does not constitute a license
to sell Licensed Product or enter into any sublicense, partnering, distribution
or related agreements for the manufacture, use or sale of any Licensed Product
or practice of any Licensed Method.
2.4 Optionee and CNSI agree that during the period of confidentiality set
forth in Article 11 (CONFIDENTIALITY), it will give The Regents at least
fourteen (14) days' written notice prior to filing any patent application
covering the-Licensed Product or Licensed Method, their use or their production.
The foregoing notwithstanding, Optionee or CNSI shall have the right to file
such an application on shorter notice or without notice, if in its reasonable
judgment, due to an impending publication or other circumstances, the ability of
Optionee or CNSI to obtain patent protection would otherwise be jeopardized.
However, under such aforementioned shorter notice or without notice
circumstances, Optionee or CNSI will give such written notice to The Regents as
soon as possible, but in no instance, later than fourteen (14) days following
the filing of such patent application(s).
2.5 The licenses granted in this Option Agreement are subject to the
overriding obligations to the U.S. Government including those in 35 U.S.C.
200-212 and applicable governmental implementing regulations.
2.6 The Regents expressly reserves for itself and on behalf of Gladstone,
the right to publish any and all technical data resulting from any research
performed by Gladstone relating to the Invention and to make and use the
Invention, Licensed Product, Licensed Method and associated technology for
educational and research purposes only.
3. OPTION FEE AND TERM
3.1 This option shall extend for three (3) years, beginning on the
Effective Date and
9
<PAGE> 10
expiring on the third anniversary of that date unless earlier exercised by
Optionee under Article 4 (EXERCISE OF THE OPTION), in which case, the option
thereupon terminates.
3.2 As partial consideration for this Option Agreement, Optionee shall pay
to The Regents option fees as follows:
(a) Twenty Five Thousand Dollars ($25,000) for the first year of the
Option Agreement, which first-year option fee shall be due and payable to The
Regents upon execution of this Option Agreement by Optionee and CNSI;
(b) Fifty Thousand Dollars ($50,000) for the second year of the
Option Agreement, which second-year option fee shall be due and payable to The
Regents upon the first anniversary of the Effective Date;
(c) One Hundred Thousand Dollars ($100,000) for the third year of
the Option Agreement, which third-year option fee shall be due and payable to
The Regents upon the second anniversary of the Effective Date, unless the option
is exercised prior to the second anniversary of the Effective Date.
3.3 As further consideration for this Option Agreement, Optionee will
comply with Section 2 of the Stockholders' Rights Agreement.
3.4 The above option fees are non-refundable, non-creditable, not an
advance against subsequent license issue fees or other license fees or royalties
and not creditable in any way towards Optionee's financial obligations under the
Research Agreement.
4. EXERCISE OF THE OPTION
4.1 If Optionee elects to exercise the option, it shall do so by
delivering to The Regents: (i) a written notification stating such, (ii) the
Business Plan and (iii) the option exercise fee described in Section 5.1.2
before this Option Agreement expires. Failure of
10
<PAGE> 11
Optionee to properly notify The Regents will be deemed by The Regents as an
election by Optionee not to secure a license and The Regents will then be free
to market and license Regents' Patent Rights to others without further
obligation to Optionee.
4.2 Optionee shall have the right to exercise the option as to any or all
of Regents' Patent Rights. In its notification to The Regents pursuant to
Section 4.1, Optionee shall specify in writing those particular patents and
patent applications within Regents' Patent Rights to which it wishes a license
and those to which it has no interest. For those patents and patent applications
to which Optionee has no interest, Optionee shall have no further right to and
The Regents shall be free to license third parties to same and shall have no
further obligation to Optionee.
4.3 Optionee is prohibited from exercising the option any earlier than
thirty (30) days before the second anniversary of the Effective Date unless the
Research Agreement is terminated for breach on the part of Gladstone by Optionee
pursuant to Section 8.2 thereof prior to such date. Such exercise will in no way
affect the provisions of the Research Agreement.
5. TERMS OF THE PROPOSED LICENSE AGREEMENT
5.1 If Optionee exercises the option in accordance with Article 4
(EXERCISE OF THE OPTION), then The Regents and Optionee shall negotiate in good
faith to arrive at mutually agreeable terms and conditions for the License
Agreement. The License Agreement will include, but is not limited to, the
following provisions:
5.1.1 an exclusive worldwide license within the Field of Use, with
the right to sublicense, to make, have made, use, import, offer to sell and sell
Licensed Product and to practice Licensed Methods under Regents' Patent Rights;
11
<PAGE> 12
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
5.1.2 an option exercise fee of ***********************************
due upon written notice by Optionee of its election to exercise its option as
per Section 4.1;
5.1.3 equity provisions as set forth in the Stockholders' Rights
Agreement;
5.1.4 an earned-royalty rate for sales by Optionee of**************
****** ********************************* based on net sales of products covered
by patent rights solely owned by The Regents and*******************************
********************************* based on net sales of products covered by
patent rights jointly owned by The Regents and Optionee;
5.1.5 Section 5.1.4 notwithstanding, if Optionee receives earned
royalties under a sublicense to a non-Affiliate, Optionee shall only be required
to pay to The Regents an earned royalty of ********************* of the royalty
received by Optionee under such sublicense ************************************
*****************************************************;
5.1.6 ************************************************** any
agreement relating to Licensed Product or Licensed Method according to the
following schedule measured from the effective date of the License Agreement:
(a) year 0-2, not applicable,
(b) year 3, ********************;
(c) year 4, ********************;
(d) year 5, ********************; and
(e) year 6 and thereafter, *******************.
12
<PAGE> 13
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
5.1.7 a ***** Optionee *******************************************
relating to Licensed Product or Licensed Method ******************************
**** of the License Agreement;
5.1.8 **********************************************************
Licensed Product ***************************** Regents' Patent Rights;
5.1.9 ***********************************************************
************************* at the time of licensure;
5.1.10 mutually agreed upon diligence terms including milestone
dates and fees based on objective-performance standards and designed to achieve
commercialization of the Licensed Product;
5.1.11 an obligation to negotiate with Gladstone to participate in
future research relating to the Invention, including but not limited to,
targeted research and development, referred to in the Research Agreement
(Appendix A), within Gladstone's area of competence at comparable costs to
independent third parties;
5.1.12 confidentiality terms;
5.1.13 indemnification of The Regents and Gladstone by Optionee;
5.1.14 a warranty that is limited to The Regents' right to grant an
exclusive license under Regents' Patent Rights as set forth in Article 12
(LIMITED WARRANTY);
13
<PAGE> 14
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
5.1.15 preference for U.S. industry to the extent required by
federal law;
5.1.16 continued payment of patent costs; and
5.1.17 provisions comparable to Section 7.8 of this Option Agreement
providing Optionee rights to New Inventions and provisions for amendment of the
License Agreement to cover additional Regents' Patent Rights as provided in
Section 1.10 hereof and as provided in the Research Agreement (Appendix A).
5.2 The option exercise fee, ****************** milestone fees and
**************** referred to above are non-creditable, non-refundable and not an
advance against royalties or any future research monies provided to Gladstone.
5.3 The License Agreement shall be subject to the overriding obligations
to the U.S. Government including those in 35 U.S.C. 200-212 and applicable
governmental implementing regulations.
5.4 In the event that the parties have been unable to agree on terms of
the License Agreement within the one hundred and twenty (120) day period from
the exercise of the option (the "Negotiation Period"), the parties agree that
any financial terms not yet agreed upon will be submitted to arbitration upon a
written request for arbitration delivered within ten (10) days after the
expiration of the Negotiation Period, as follows:
5.4.1 the arbitration shall be conducted in San Francisco,
California pursuant to the Commercial Arbitration Rules of the American
Arbitration Association, except as modified below;
14
<PAGE> 15
5.4.2 the arbitration will be conducted before a single arbitrator
experienced in university technology transfer matters in the biotechnology
industry, provided that both parties are able to agree on the identity of such
single arbitrator. If the parties cannot agree on a single arbitrator, there
will be three arbitrators, with Optionee and The Regents each selecting one
independent arbitrator and the two so selected, choosing a third;
5.4.3 the arbitration shall be limited to the unagreed to financial
terms to be included in the License Agreement and shall not modify financial
terms that have been previously agreed to by the parties, either in Article 5
hereof or during the Negotiation Period;
5.4.4 any subsequent License Agreement must be consistent with The
Regents' patent policies;
5.4.5 the decision of the arbitrator or arbitration panel shall be
rendered within ninety (90) days of the written request for arbitration, and
shall be binding on The Regents if it is accepted by Optionee within thirty (30)
days of the decision. Optionee shall have the right, within thirty (30) days of
the decision, to reject the decision, in which case Optionee will forfeit all
rights to the Regents' Patent Rights that were to be included in the proposed
License Agreement subject to Section 5.4.7 below;
5.4.6 the Negotiation Period will automatically be extended until
thirty (30) days after the decision of the arbitrator or arbitration panel;
5.4.7 notwithstanding the rejection of Optionee of the arbitrator's
decision, if, for a period of two (2) years following the expiration of such
thirty (30) day period specified in Sections 5.4.5 and 5.4.6 above, The Regents
proposes to enter into a license agreement with a third party covering the
Regents' Patent Rights that were included in the proposed
15
<PAGE> 16
License Agreement on terms more favorable to the third party than the terms
contained in the arbitrators' decision, then (i) The Regents shall deliver to
Optionee a notice specifying such terms (an "Offer Notice"), (ii) Optionee shall
have fifteen (15) days from receipt of the Offer Notice to either waive any
further rights or notify The Regents in writing of its desire to obtain a
license reflecting the terms of Offer Notice ("Acceptance Notice"), and (iii)
if, at the end of thirty (30) days from the Acceptance Notice, Optionee and The
Regents fail to enter into a definitive agreement reflecting such terms, The
Regents shall be free to enter into a license with the third party, the terms of
such license to be no more favorable to the third party than those set forth in
the Offer Notice. If Optionee waives its refusal right with respect to the terms
set forth in the Offer Notice or fails to deliver to The Regents an Acceptance
Notice within the requisite fifteen (15) day period, then The Regents shall be
free to enter into a license with the third party, the terms of such license to
be no more favorable to the third party than those set forth in the Offer
Notice; and
5.4.8 the cost of the arbitration will be paid for solely by
Optionee.
6. DUE DILIGENCE
6.1 Prior to the execution of this Option Agreement, Optionee shall have
raised a minimum of One Million Two Hundred and Fifty Thousand Dollars
($1,250,000), as detailed in Section 2 of the Stockholders' Rights Agreement.
Furthermore, unless Optionee raises the required funds, by selling stock to
investors other than CNSI or an Affiliate, to fund the second and third year
research support payments as set forth in the Research Agreement, CNSI must lend
Optionee all such amounts. All such loans shall be interest free loans.
6.2 Optionee shall execute the Research Agreement concurrently with the
execution of this Option Agreement. It is a material term of this Option
Agreement and any License Agreement that Optionee fund research at Gladstone
under the Research Agreement in an
16
<PAGE> 17
amount equal to One Million Two Hundred and Fifty Thousand Dollars ($1,250,000)
the first year and a minimum of One Million Two Hundred and Fifty Thousand
Dollars ($1,250,000) per year thereafter, payable semi-annually each year for
three (3) years starting on the Effective Date to develop and evaluate Licensed
Product(s).
6.3 Optionee shall execute the Stockholders' Rights Agreement within
thirty (30) days of the Effective Date of this Option Agreement. This obligation
is a material part of this Option Agreement and any breach by Optionee of this
obligation or any breach of the Stockholders' Rights Agreement will be a breach
by Optionee of this Option Agreement.
6.4 Optionee shall provide to The Regents semi-annual progress reports
covering the development and testing of Licensed Product. Such progress reports
may include copies of reports received by Optionee from Gladstone as required of
Gladstone as set forth in the Research Agreement. The progress reports are due
to The Regents on June 30 and December 30 of each year, beginning December 30,
1997, and for the life of this Option Agreement.
6.5 The progress reports will include, but are not limited to, the
following topics so that The Regents may determine the progress of the
development and testing of Licensed Product:
o summary of work completed
o key scientific discoveries
o summary of work in progress
o current schedule of anticipated events or milestones
o a summary of resources (dollar value) spent in the reporting period
7. PATENT PROSECUTION AND MAINTENANCE
7.1 Subject to Section 7.6, The Regents shall diligently prosecute and
maintain the
17
<PAGE> 18
United States and foreign patent applications and patents comprising Regents'
Patent Rights using counsel reasonably acceptable to Optionee, except for
Regents' Patent Rights consisting of New Inventions jointly owned with Optionee,
which will be prosecuted by Optionee as provided in Sections 7.4 and 7.5 herein.
The Regents shall promptly provide Optionee with copies of all relevant
documentation so that Optionee may be apprised of the continuing prosecution.
Optionee shall keep this documentation in confidence in accordance with the
provisions of Article 11 (CONFIDENTIALITY).
7.2 The Regents will hold title to all patents and patent applications
subject to this Option Agreement, except as provided for in the Research
Agreement, and The Regents' counsel will take instructions only from The Regents
but The Regents shall use reasonable efforts to amend any patent application to
include claims requested by Optionee and required to protect Licensed Product or
Licensed Method. Pursuant to Section 6.2 of the Research Agreement, The Regents
agrees to assert rights to the Invention and New Inventions in the Field of Use
as long as this Option Agreement is in effect.
7.3 Except as provided in the Research Agreement with respect to jointly
owned New Inventions, The Regents shall, at the request of Optionee, file,
prosecute and maintain patent applications and patents covered by Regents'
Patent Rights in foreign countries if available. The Regents shall notify
Optionee in writing at least three (3) months prior to any applicable deadline
for any foreign filings, and Optionee shall notify The Regents in writing of
those countries in which it wishes foreign filings to occur within forty-five
(45) days of the receipt of such request. Failure by Optionee to so notify The
Regents within the forty-five (45) day period shall be deemed to constitute an
election by Optionee not to request The Regents to secure foreign patent rights
in such countries on behalf of Optionee. The Regents has the right to file
patent applications at its own expense in any country in which Optionee has
elected not to secure foreign patent rights, and those patent applications and
resulting patents, if any, shall not thereafter be included in the licenses
granted under this Option Agreement.
18
<PAGE> 19
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
7.4 Optionee shall control the preparation, filing, prosecution and
maintenance of United States and foreign patent applications, with respect to
New Inventions jointly owned by The Regents and Optionee. Such applications
shall be prepared, filed, prosecuted and maintained using counsel reasonably
acceptable to The Regents. The Regents and Gladstone shall cooperate fully with
and provide assistance to Optionee (or if the parties agree to have The Regents
exercise control, Optionee shall cooperate fully with and provide assistance to
The Regents) in connection with the preparation, filing, prosecution and
maintenance of such jointly owned patent applications, including, without
limitation, execution of all documents and performance of all acts reasonably
necessary to file and prosecute such patent applications and maintain, enforce
and defend such patents. Optionee and The Regents shall each provide the other
in a timely manner with copies of all jointly owned patent applications filed by
either pursuant to this Section, as well as those documents involved in the
prosecution thereof, so that the other shall have an opportunity to provide
comment on any such applications and documents. Such jointly owned patent
applications and documents shall be held in confidence in accordance with the
Provisions of Article 11 (CONFIDENTIALITY). Optionee shall bear the expenses
associated with the filing and prosecution of such jointly owned patent
applications.
7.5 Neither party, with respect to a New Invention jointly owned by
Optionee and The Regents, shall abandon such patent application and resulting
patent without first providing the other party with thirty (30) days' prior
written notice.
7.6 Optionee shall pay all past, present and future costs incurred by The
Regents and Gladstone in preparing, filing, prosecuting and maintaining all
United States and foreign patents and patent applications covered by Regents'
Patent Rights. Patent costs incurred as of the Effective Date are approximately
**********************************************.
19
<PAGE> 20
The parties shall consult in good faith with each other regarding the
desirability of pursuing or defending any interferences or oppositions. The
costs of interferences and opposition, if approved by Optionee in writing, are
prosecution expenses and will be paid by the Optionee. If such costs are not
approved by Optionee, or Optionee chooses not to participate in such
interference and opposition, then such decision not to participate will be
deemed an election by Optionee not to pursue such action on behalf of Optionee.
Those patent applications and resulting patents, if any involved in such
interferences and opposition shall not thereafter be included in the licenses
granted under this Option Agreement, effective on the date The Regents provided
notice to Optionee of such interference and opposition, and The Regents will
have no further obligation to Optionee with respect thereto. Optionee shall
reimburse The Regents for all costs and charges within thirty (30) days
following receipt of a proper itemized invoice from The Regents for same. If
this Option Agreement is in effect two (2) months before the due date of PCT
filings, or four (4) months before the due date of National Phase filings, then
Optionee shall pay for the relevant PCT Chapter I, PCT Chapter II or National
Phase filings in all designated countries, notwithstanding the provisions of
Section 7.5 below. If Optionee decides not to proceed with such interference and
opposition, The Regents shall decide in its sole discretion, whether or not to
enter any interference proceedings or opposition.
7.7 Optionee may terminate its obligations with respect to any patent
application or patent in any or all designated countries upon three (3) months'
prior written notice to The Regents. The Regents will use its best efforts to
curtail the associated patent costs after notice is received from the Optionee.
The Regents may continue prosecution and/or maintenance of those applications or
patents at its sole discretion and expense and Optionee will have no further
right or licenses thereunder.
7.8 The Regents will promptly transmit to Optionee any disclosures of New
Inventions as provided in the Research Agreement. Within ninety (90) days of
receipt by
20
<PAGE> 21
Optionee of a disclosure of a New Invention, Optionee shall inform The Regents
in writing, whether or not it wishes to include The Regents' interest in any New
Invention within the Field of Use within Regents' Patent Rights and pay patent
costs therefor under this Article. If Optionee does not elect or elects not to
include The Regents' interest in the New Invention within Regents' Patent
Rights, Optionee and CNSI shall have no further rights thereto. If Optionee does
elect to include The Regents interest in the New Invention within Regents'
Patent Rights, The Regents, to the extent it is legally able to do so, shall
include its interest in any patent application filed under this Section 7.8 in
this Option Agreement.
7.9 Optionee has a continuing responsibility to keep The Regents informed
of its large/small business entity status (as defined by the United States
Patent and Trademark Office).
8. LIFE OF THE OPTION AGREEMENT
8.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Option Agreement, this Option
Agreement is in effect from the Effective Date and shall remain in effect for
the period specified in Section 3.1 hereof. Upon proper exercise of the option
as provided in Section 4.1, Optionee may have an extension throughout the
Negotiation Period specified in Section 5.4 to conclude a final written License
Agreement, after which time The Regents shall have no obligation to Optionee
whatsoever, except as provided in Section 5.4 hereof.
8.2 Any termination of this Option Agreement will not affect the rights
and obligations set forth in the following Sections and Articles:
Section 2.4 Notice of filing patent applications
21
<PAGE> 22
Section 5.4 Arbitration of License Agreement Financial Terms
Article 10 USE OF NAMES AND TRADEMARKS
Article 11 CONFIDENTIALITY
Article 13 INDEMNIFICATION AND INSURANCE
Article 16 LATE PAYMENTS
Article 20 GUARANTEED PERFORMANCE
8.3 Termination of this Option Agreement will not relieve a party of any
obligation or liability accrued prior to termination nor will it rescind
anything done by a party or any payments made by Optionee to The Regents prior
to the time termination becomes effective.
9. TERMINATION FOR CAUSE
9.1 If a party violates or fails to perform any material term of this
Option Agreement, then the aggrieved party may give written notice of default
("Notice of Default") to such party. If such party fails to repair the default
within forty-five (45) days of the date of notice, then the aggrieved party has
the right to terminate this Option Agreement upon delivery of a second written
notice so stating ("Notice of Termination").
9.2 If a Notice of Termination is delivered by a party, this Option
Agreement shall automatically terminate on the effective date of such notice.
Termination will not relieve a party of its obligation to pay all amounts under
this Option Agreement, the Research Agreement or the Stockholders' Rights
Agreement as of the date of termination and will not impair any accrued rights
of the party.
9.3 If this Option Agreement is terminated for cause, a party shall, upon
request made by another party, promptly return to the requesting party all
tangible personal property and confidential data (including copies, facsimiles,
and any derivatives thereof), belonging to
22
<PAGE> 23
the party and provided to the requesting party.
9.4 The Regents will also have the right and option to terminate this
Option Agreement if the Research Agreement or the Stockholders' Rights Agreement
is materially breached or terminated by Optionee or CNSI prior to the agreed
upon expiration date of the Research Agreement or the Stockholders' Rights
Agreement and there has been no breach thereof by The Regents or Gladstone. Such
termination of this Option Agreement will be subject to Article 14 (NOTICES).
10. USE OF NAMES AND TRADEMARKS
10.1 Nothing in this Option Agreement confers to a party, the right to use
any name, trade name, trademark or other designation (including contraction,
abbreviation or simulation of any name, trade name, trademark or other
designation) of another party in advertising, publicity or other promotional
activities. Unless expressly required by law, the use by Optionee or CNSI of the
names, "The Regents of the University of California," "The University of
California," "The J. David Gladstone Institutes" or of any campus of the
University of California is prohibited without prior written consent of The
Regents or, if appropriate, Gladstone.
10.2 If a third party inquires whether a license to Regents' Patent Rights
is available, The Regents may disclose the existence of this Option Agreement
and the extent of the grant in Article 2 (GRANT), but may not disclose the name
of Optionee or CNSI, except where The Regents is required to release that
information under the California Public Records Act or other applicable law.
11. CONFIDENTIALITY
23
<PAGE> 24
11.1 Each party shall safeguard confidential data, supplied by the another
party under this Option Agreement, against disclosure to others with the same
degree of care as it exercises with its own data of a similar nature. No party
shall use such data except to perform its obligations under this Option
Agreement and shall not disclose such data to others (except to its employees,
agents or consultants who are bound to such parties by a like obligation of
confidentiality) without the express written permission of the other party,
except that such party is not prevented from using or disclosing any of the data
that: (a) such party can demonstrate by written records was previously known to
it; (b) is now, or becomes in the future, public knowledge other than through
acts or omissions of such party; or (c) is lawfully obtained by such party from
sources independent of the other party. The secrecy obligations of each party
under these terms shall remain in effect for five (5) years from the expiration
or termination date of this Option Agreement.
11.2 The obligations of confidentiality and limited use hereunder apply to
any confidential information of a party relating to the subject matter of this
Option Agreement whether supplied under this Option Agreement or previously.
12. LIMITED WARRANTY
12.1 The Regents warrants to Optionee that it has the lawful right to
grant this option and that it is the owner of Regents' Patent Rights as of the
Effective Date.
12.2 This Option Agreement and the Invention are provided WITHOUT WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY,
EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT THE
LICENSED PRODUCT OR LICENSED METHOD PROVIDED HEREUNDER WILL NOT INFRINGE ANY
PATENT OR OTHER PROPRIETARY RIGHT.
24
<PAGE> 25
12.3 IN NO EVENT WILL THE REGENTS OR GLADSTONE BE LIABLE FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS
OPTION AGREEMENT OR THE MANUFACTURE, OR USE OF THE INVENTION, LICENSED PRODUCT,
OR LICENSED METHOD.
12.4 Nothing in this Option Agreement:
12.4.1 is a warranty or representation by The Regents as to the
validity, enforceability or scope of any Regents' Patent Rights;
12.4.2 is a warranty or representation that anything made, used or
otherwise disposed of under any license from The Regents is or will be free from
infringement of patents of third parties;
12.4.3 is an obligation to bring or prosecute actions or suit
against third parties for patent infringement, provided, however, that each
party shall promptly notify the other as to any such infringement of which it
becomes aware;
12.4.4 is an obligation to furnish any information or know-how not
provided in Regents' Patent Rights; or
12.4.5 confers by implication, estoppel or otherwise any license or
rights under any patents of The Regents other than Regents' Patent Rights.
13. INDEMNIFICATION AND INSURANCE
13.1 Optionee and CNSI shall indemnify, hold harmless and defend The
Regents, its officers, employees, and agents, the sponsors of the research that
led to the Invention and the
25
<PAGE> 26
Inventors and their employer (Gladstone), against any and all claims, suits,
losses, liabilities, damages, costs, fees and expenses resulting from or arising
out of actions of Optionee under this Option Agreement. This indemnification
includes, but is not limited to product liability.
13.2 The Regents shall promptly notify Optionee and CNSI in writing of any
claim or suit brought against The Regents in respect of which The Regents
intends to invoke the provisions of this Article. Optionee and CNSI will keep
The Regents informed on a current basis of their defense of any claims pursuant
to this Article.
(Remainder of this page deliberately left blank)
26
<PAGE> 27
14. NOTICES
Notices or payments are properly given and effective on the date of
delivery if delivered in person or five (5) days after mailing if mailed by
first-class, certified mail, postage paid, to the respective addresses given
below or to such other addresses as are designated by written notice:
To Optionee: Cambridge NeuroScience Partners, Inc.
c/o Cambridge NeuroScience, Inc.
One Kendall Square, Building 700
Cambridge, MA 02139
Attention: Harry Wilcox
Vice President
Finance and Business Development
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attention: F. Andrew Anderson, Esq.
To The Regents: The Regents of the University of California
Office of Technology Transfer
1320 Harbor Bay Parkway, Suite 150
Alameda, CA 94502
Attention: Executive Director
Research Administration and
Technology Transfer
UC Case No. 96-223
15. ASSIGNABILITY
This Option Agreement shall be binding on and inure to the benefit of The
Regents, its successors and assigns, but it is personal to Optionee. However,
Optionee may assign or transfer Optionee's rights and obligations under this
Option Agreement to an Affiliate or a successor to all or substantially all of
its assets or business relating to this Option Agreement,
27
<PAGE> 28
whether by sale, merger or operation of law. In such instances, Optionee shall
notify The Regents of such assignment in writing within thirty (30) days
following such assignment.
16. LATE PAYMENTS
If fees or patent cost reimbursements are not received by The Regents when
due, Optionee shall pay to The Regents interest charges at a rate of ten percent
(10%) simple interest per annum. Interest is calculated from the date payment
was due until actually received by The Regents. Acceptance by The Regents of any
late payment of fees, patent costs or interest from Optionee under this Article
in no way affects the provisions of Article 17 (NO WAIVER).
17. NO WAIVER
No waiver by either party hereto of any breach or default of any of the
covenants or agreements herein set forth is a waiver as to any subsequent and/or
similar breach or default.
18. FAILURE TO PERFORM
In the event of a failure of performance due under the terms of this
Option Agreement and if it becomes necessary for either party to undertake legal
action against the other on account thereof, then the prevailing party will be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.
28
<PAGE> 29
19. GOVERNING LAWS
This Option Agreement WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
20. GUARANTEED PERFORMANCE
CNSI HEREBY GUARANTEES PERFORMANCE OF ALL OBLIGATIONS OF OPTIONEE UNDER
ARTICLES 3, 4, 5, 6, 7, 13 AND 16 OF THIS OPTION AGREEMENT, UNDER THE RESEARCH
AGREEMENT AND UNDER THE STOCKHOLDERS' RIGHTS AGREEMENT. Without limiting the
foregoing, CNSI specifically guarantees the research funding required under
Section 6.2 above.
21. MISCELLANEOUS
21.1 This Option Agreement is not binding upon the parties until it has
been signed below by each party: it then becomes effective as of the Effective
Date.
21.2 No amendment or modification hereof is valid or binding upon the
parties unless made in writing and signed on behalf of each party.
21.3 This Option Agreement, the Research Agreement (Appendix A) and the
Stockholder's Rights Agreement embody the entire understanding of the parties
and supersedes all previous communications, representations and understandings,
either oral or
29
<PAGE> 30
written, between the parties relating to the subject matter hereof. The Regents
agrees to be bound by and perform the intellectual property requirements of
Gladstone/The Regents as set forth in and required by, the Research Agreement
(Appendix A).
21.4 Each party hereby agrees that it does not intend by any provisions of
this Option Agreement to violate any public policy, statutory or common laws,
rules or regulations. Should one or more provisions of this Option Agreement be
or become invalid, the parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions that it can be reasonably assumed that
the parties would have entered into this Option Agreement with such valid
provisions. In case such valid provisions cannot be agreed upon, the invalidity
of one or several provisions of this Option Agreement shall not affect the
validity of this Option Agreement as a whole, unless the invalid provisions are
of such essential importance to this Option Agreement that it is to be
reasonably assumed that the parties would not have entered into this Option
Agreement without the invalid provisions.
21.5 In the event that any action shall be instituted in any court by a
party hereto for breach of this Option Agreement or the License Agreement or to
resolve any dispute with respect to either agreement, the prevailing party shall
be entitled to recover court costs and reasonable attorney's fees in such amount
or amounts as the court shall determine.
21.6 In the event of inconsistencies between this Option Agreement and the
Research agreement, this Option Agreement will prevail.
The Regents, Optionee and CNSI have executed this Option Agreement, in
triplicate originals, by their duly authorized representatives, on the day and
year hereinafter written.
30
<PAGE> 31
CAMBRIDGE NEUROSCIENCE THE REGENTS OF THE UNIVERSITY
PARTNERS, INC. OF CALIFORNIA
By: /s/ R.N. McBurney By: /s/ Terence A. Feuerborn
------------------------------ ------------------------------
(Signature) (Signature)
Name: R.N. McBurney Name: Terence A. Feuerborn
------------------------------
(Please print)
Title: President Title: Executive Director
------------------------------ Research Administration and
Technology Transfer
Date: Date: 12-19-96
------------------------------ ------------------------------
Approved as to legal form: /s/ Edwin H. Baker 12/19/96
------------------ --------
Edwin H. Baker, Associate Resident Counsel Date
Office of Technology Transfer
University of California
CAMBRIDGE NEUROSCIENCE, INC.
By: /s/ Elkan Gamzu
-----------------------------
(Signature)
Name: Elkan Gamzu
-----------------------------
Title: President and CEO
---------------------------
Date:
----------------------------
31
<PAGE> 1
Exhibit 99.3
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
STOCKHOLDERS' RIGHTS AGREEMENT
This Stockholders' Rights Agreement (the "Agreement") dated as of December
23, 1996, is entered into by and among Cambridge NeuroScience Partners, Inc., a
Delaware corporation (the "Company"), Cambridge NeuroScience, Inc., a Delaware
corporation ("CNSI"), The J. David Gladstone Institutes, a charitable trust
("Gladstone"), and The Regents of the University of California, a California
corporation ("The Regents").
WITNESSETH
WHEREAS, the Company, CNSI and The Regents have entered into an Option
Agreement of even date herewith (the "Option Agreement"); and
WHEREAS, the Company and Gladstone have entered into a Sponsored Research
and Collaboration Agreement of even date herewith (the "Sponsored Research and
Collaboration Agreement"); and
WHEREAS, concurrently with the execution of this Agreement, CNSI,
Gladstone and The Regents are purchasing Shares; and
WHEREAS, each of the parties hereto desires to set forth in a single
agreement certain rights with respect to the securities of the Company.
NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth and other good and valuable consideration, the
parties hereto agree as follows:
1. Certain Definitions.
--------------------
As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof (a "Person") which directly or indirectly controls, is controlled by, or
is under common control with, the indicated Person.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
<PAGE> 2
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
"MAJOR FINANCING" shall mean a sale of shares newly issued New Securities
to investors other than CNSI or an Affiliate of CNSI with aggregate net proceeds
to the Company of not less than *********************** (excluding the
conversion of debt by CNSI pursuant to Section 3.2 hereof) after deduction of
commissions, legal, accounting and all other expenses of sale.
"NEW SECURITIES" shall mean any capital stock of the Company whether now
authorized or not, and rights, options or warrants to purchase capital stock and
securities of any type whatsoever which are, or may become, convertible into
capital stock of the Company; provided, however, that the term "New Securities"
does not include (i) the Shares; (ii) securities offered to the public pursuant
to a Registration Statement; (iii) securities issued for the acquisition of
another corporation by the Company by merger, purchase of substantially all the
assets of such corporation or other reorganization resulting in the ownership by
the Company of not less than a majority of the voting power of such corporation;
(iv) securities issued as a result of a stock split, stock dividend or
reclassification of common stock, distributable on a pro rata basis to all
holders of common stock; (v) securities issued in connection with equipment
lease transactions between the Company and unaffiliated third parties; or (vi)
"Employee Shares" which, for purposes of this Agreement, shall consist of shares
of common stock issued or issuable to employees, officers and directors of, or
consultants to, the Company pursuant to agreements, plans or programs, or
pursuant to rights, options or warrants granted under stock option plans,
employee stock purchase plans, restricted stock plans or other employee stock
plans or agreements, in each case approved by the Board of Directors of the
Company.
"REGISTRATION STATEMENT" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statue and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"SECURITYHOLDERS" means Gladstone and The Regents, and any persons or
entities to whom the rights granted under this Agreement are transferred by
either Securityholder, their successors or assigns pursuant to Section 3.3
hereof.
"SHARES" means common stock of the Company, having a par value of $.0001
per share, purchased by the Securityholders and CNSI contemporaneously with the
execution of this Agreement and representing one hundred percent (100%) of the
initial capitalization of the Company.
2. Initial Equity Provisions.
--------------------------
2
<PAGE> 3
2.1 INCORPORATION AND CAPITALIZATION. CNSI and the Company represent that,
prior to the execution of the Option Agreement, The Company was incorporated in
the State of Delaware and, as of the Effective Date of the Option Agreement, has
paid in capital of at least One Million Two Hundred and Fifty Thousand Dollars
($1,250,000). Furthermore, unless the Company raises the required funds, by
selling stock to investors other than CNSI or an Affiliate, to fund the second
and third year research support payments as set forth in the Research Agreement,
CNSI must lend the Company all amounts which the Company may require to fund
such payments. All such loans shall be interest free loans.
2.2 ADDITIONAL CONSIDERATION FOR THE OPTION AGREEMENT. As additional
consideration for the Option Agreement, on or prior to the Effective Date of
this Agreement, CNSI shall have contributed at least One Million Two Hundred and
Fifty Thousand Dollars ($1,250,000) paid in capital to the Company and Company
shall issue to the Securityholders a number of Shares of the Company sufficient
to result in an equity position of five percent (5%) to The Regents, fifteen
percent (15%) to Gladstone, and eighty percent (80%) to CNSI as shown in Table 1
below.
<TABLE>
TABLE 1
CAPITAL STRUCTURE* OF CAMBRIDGE NEUROSCIENCE PARTNERS, INC. (THE "COMPANY")
<CAPTION>
FIRST ROUND: PRICE PER SHARE = $0.00064
# OF COMMON SHARES** TOTAL
<S> <C> <C>
CNSI: 468,750 $300.00
GLADSTONE 234,375 $150.00
THE REGENTS 78,125 $ 50.00
<CAPTION>
=============================================
SECOND ROUND: PRICE PER SHARE = $1.60
# OF COMMON SHARES** TOTAL
<S> <C> <C>
CNSI: 781,250 $1,250,000.00
=============================================
<CAPTION>
FIRST AND SECOND ROUND:
TOTAL NO. OF SHARES TOTAL DOLLAR AMOUNT
<S> <C>
1,562,500 $1,250,500
- ------------
<FN>
* Capital structure at an initial capitalization of One Million Two Hundred
Fifty Thousand Dollars ($1,250,000)
** Fully Diluted
</TABLE>
3
<PAGE> 4
3. Right of First Refusal.
-----------------------
3.1 New Securities Rights
---------------------
(a) The Regents and Gladstone shall each have the right, but not the
obligation, to maintain their pro rata portions of five percent (5%) and fifteen
percent (15%), respectively, as provided for in Section 2.2 above (or such other
percentages as they may respectively own as a result of (i) the failure of The
Regents and/or Gladstone, respectively, to exercise its rights under this
Section 3.1 or Section 3.2 with respect to a previous issuance of the capital
stock of the Company or (ii) the purchase of one of them or the others pro rata
portions of the capital stock of the Company pursuant to Section 3.1 (b) or
Section 3.2(c) by purchasing their pro rata portion of any New Securities which
the Company may, from time to time, sell at the same price per share paid
therefore by other purchasers, including CNSI, subject to the terms and
conditions set forth below in Section 3.1 (b) and 3.1 (c). A Securityholders'
pro rata portion of the New Securities shall be determined by the ratio of the
number of shares of common stock (which, for this purpose shall include shares
of common stock issuable upon conversion of any then outstanding shares of
preferred stock) of the Company owned by such Securityholder, bears to the total
number of shares of the Company's common stock (which, for this purpose shall
include shares of common stock issuable upon conversion of any then outstanding
shares of preferred stock) outstanding immediately prior to the offering of the
New Securities, including shares issued to CNSI upon conversion of debt of the
Company pursuant to Section 3.2 below.
(b) In the event the Company intends to sell New Securities, it
shall deliver written notice of such intention to each Securityholder,
describing the type of New Securities to be sold, the price thereof and the
general terms upon which the Company proposes to effect such sale. Each
Securityholder shall have ten (10) days from the date of any such notice to
agree to purchase all or part of its pro rata portion of such New Securities for
the price and upon the general terms and conditions specified in the Company's
notice by giving written notice to the Company stating the quantity of New
Securities to be so purchased. Each Securityholder shall have a right of
overallotment such that if either Securityholder fails to exercise its right
hereunder to purchase its total pro rata portion of New Securities, the other
Securityholder may purchase such unpurchased portion by giving written notice to
the Company with five (5) days from the date that the Company provides written
notice to such Securityholder of the amount of New Securities with respect to
which such non-purchasing Securityholder has failed to exercise its right
hereunder.
(c) In the event either Securityholder fails to exercise its rights
in Sections 3.1 and 3.2 within such 10-day period (or the additional 5-day
period provided for overallotments), the Company may within one hundred twenty
(120) days thereafter sell any or all of such nonpurchased New Securities at a
price and upon general terms no more favorable to the purchasers thereof than
those specified in the notice given to each Securityholder pursuant to paragraph
(b) above. In the event the Company has not sold such New Securities within such
120-day period, the Company shall not thereafter sell such New Securities
without first offering such New Securities to the Securityholders in the manner
provided above.
4
<PAGE> 5
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
(d) Unless otherwise approved by the Securityholders, any issuance
and sale of New Securities by the Company following the date hereof must be on
the basis of the Company being deemed to have a pre-money valuation of not less
than ***********************************************************.
3.2 Shares Issued Upon Conversion of Debt.
--------------------------------------
(a) CNSI shall have the right, but not the obligation, to convert
all or any part of debt incurred by the Company to CNSI, into New Securities of
the Company, provided that such conversion is coincident with a Major Financing.
The conversion price shall be the average price per share which the investors
will pay for their shares in said Major Financing.
(b) In the event of any such conversion of debt by CNSI pursuant to
subsection (a) above, The Regents and Gladstone shall have the right to purchase
from CNSI five percent (5%) and fifteen percent (15%), respectively, of the
shares of New Securities issued to CNSI upon such conversion at the same price
per share paid by CNSI with debt of the Company. Promptly after any such
conversion, CNSI shall deliver written notice to the Securityholders of the date
of conversion, the number of shares issued to CNSI upon such conversion and the
price per share paid by CNSI with debt of the Company. The Securityholders shall
have up to two (2) years from the date of conversion to exercise their right
under this Section 3.2(b).
(c) If either Securityholder shall fail to purchase its total pro
rata portion of such shares of common stock pursuant to subsection (b) above,
CNSI shall promptly notify the Company and the other Securityholder. Each
Securityholder shall have a right of overallotment such that if either
Securityholder fails to exercise its right hereunder to purchase its total pro
rata portion of the shares of common stock from CNSI pursuant to subsection (b)
above, the other Securityholder may purchase such portion on a pro rata basis by
giving written notice to CNSI and the Company within five (5) days from the date
that CNSI provides written notice pursuant to this subsection (c) above.
(d) Unless otherwise approved by the Securityholders, any New
Securities issued to CNSI pursuant to this Section 3.2 shall have a purchase or
conversion price determined on the basis of the Company being deemed to have a
pre-money valuation of not less than ******************************************
*************************************************.
3.3 Transfers of Certain Rights.
----------------------------
(a) The rights granted to a Security holder under this Article 3 may
be transferred by such Securityholder only to another Securityholder, to any
Affiliate of the Company or to any person or entity that is acquiring all of
such Securityholder's Shares provided that the Company is given written notice
by the transferee at the time of such
5
<PAGE> 6
transfer stating the name and address of the transferee and identifying the
securities with respect to which such rights are being assigned.
(b) Any transferee (other than a Securityholder) to whom rights
under this Article 3 are transferred pursuant to this Section 3.3 shall, as a
condition to such transfer, deliver to the Company a written instrument by which
such transferee agrees to be bound by the obligations imposed upon
Securityholders under this Agreement to the same extent as if such transferee
were a Securityholder hereunder.
(c) A transferee to whom rights under this Article 3 are transferred
pursuant to this Section 3.3 may not again transfer such rights to any other
person or entity, other than as provided in paragraphs (a) or (b) above.
(d) Notwithstanding anything to the contrary contained in this
Agreement, either Securityholder may transfer rights granted to such
Securityholder under this Article 3 to any inventor and up to three (3)
transferees to whom Shares are transferred and who delivers to the Company a
written instrument in accordance with subsection (b) above and containing the
representation that the transfer is exempt from registration under the
Securities Act. In the event of such transfer, such transferee shall be deemed a
Securityholder for purposes of this Section 3.3 and may again transfer such
rights to any other person or entity which acquires Securities from such
transferee in accordance with, and subject to, the provisions of subsections
(a), (b) and (c) above.
4. MERGERS AND CONSOLIDATIONS. The Company has the right to (a) issue equity
for consideration other than money, and (b) merge into or consolidate with
another corporation other than CNSI without the approval of The Regents or
Gladstone, provided that the Company shall deliver written notice to The Regents
and Gladstone at least thirty (30) days prior to the consummation of such merger
or consolidation. If the Company merges into CNSI, the terms of the merger,
including but not limited to the number of shares to be issued by CNSI in
exchange for shares of the capital stock of the Company as established by the
underwriters, must be approved by an independent and qualified investment
banking firm, such firm having been selected by the Securityholders. The fees of
any such investment banking firm will be paid by the Securityholders on a pro
rata basis.
5. TERMINATION OF RIGHTS. The covenants contained in Articles 3 and 4 of this
Agreement shall terminate, and be of no further force and effect, with respect
to each Securityholder upon the Closing of a public offering of the Company's
common stock, pursuant to a Registration Statement.
6. Sale or Transfer of Shares: Legend.
-----------------------------------
6.1 RESTRICTIONS ON TRANSFER. The Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities Act
or (ii) the Company first shall have been furnished with an opinion of legal
counsel (which may be counsel to the Company), reasonable satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Securities Act, and, in the case of a sale of
transfer to a party other than an Affiliate of The Regents or Gladstone, as the
case may be,
6
<PAGE> 7
the Company has consented to such sale or transfer.
6.2 "STAND-OFF" AGREEMENT. Each Securityholder, if requested by the
Company and an underwriter of common stock or other securities of the Company,
shall agree not to sell or otherwise transfer or dispose of any Shares or other
securities of the Company held by such Securityholder for a specified period of
time (not to exceed one hundred eighty (180) days) following the effective date
of a Registration Statement relating to any public offering of the Company's
common stock; provided, that all officers and directors of the Company and all
holders of more than one percent (1%) of the outstanding shares of common stock
of the Company enter into agreements at least as restrictive as this Agreement.
6.3 LEGEND. Each certificate or other instrument representing the Shares
shall bear a legend substantially in the following form:
"This security has not been registered under the Securities Act of
1933, as amended, and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and until it has been
registered under such Act or an opinion of counsel satisfactory to
the Company is obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates
representing any Shares, at the request of the holder thereof, at such time as
they become eligible for resale pursuant to Rule 144(k) under the Securities
Act.
7. REPRESENTATIONS OF PURCHASERS. Each of CNSI, Gladstone and The Regents (each
hereinafter referred to as a "Purchaser") hereby represents to the Company in
connection with the Purchaser of their respective Shares contemporaneously the
execution of this Agreement that:
7.1 INVESTMENT. Such Purchaser is acquiring the Shares for its own account
for investment and not with a view to, or for sale in connection with, any
immediate distribution thereof, nor with any present intention of immediately
distributing or selling the same; and, except as contemplated by this Agreement,
such Purchaser has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof except The Regents' obligation to inventors to share Shares
in accordance with The Regents' Patent Policy.
7.2 EXPERIENCE. Such Purchaser has adequate net worth and means of
providing for its current needs and personal contingencies to sustain a complete
loss of its investment in the Company; such Purchaser's overall commitment to
investments which are not readily marketable is not disproportionate to its net
worth and such Purchaser's investment in the Shares will not cause such overall
commitment to become excessive; and such Purchaser has sufficient knowledge and
experience to evaluate the risk of its investment in the Company.
7.3 ACCREDITED INVESTOR. Such Purchaser is an "accredited investor" within
the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended.
7
<PAGE> 8
8. Piggy-Back Registration Rights.
-------------------------------
8.1 REGISTRATION RIGHTS. The Securityholders shall have the right to
request inclusion of Shares including shares of common stock issuable to them
upon conversion of New Securities (if applicable) in any registration under the
Securities Act proposed by the Company, other than a registration relating
solely to employee benefit plans, a registration relating solely to a Rule 145
transaction or a registration pursuant to any registration form that does not
permit secondary sales. Any required reduction in the number of shares to be
included in such registered offering shall be effected pro-rata among the
holders having registration rights of all shares of capital stock of the
Company. If the registration described herein involves an underwriting, then the
Securityholders participating in such underwritten offering shall enter into an
underwriting agreement with the representative of the underwriter or
underwriters selected by the Company, which underwriting agreement shall contain
customary terms and conditions, including provisions relating to indemnification
by and among the Company, the Securityholders and the underwriters. The Company
shall bear all cost and expenses of such registration, other than fees and
expenses, if any, of counsel or other advisors to the Securityholders.
8.2 INDEMNIFICATION. The Company shall indemnify, defend and hold the
Securityholders harmless against all claims, losses and damages arising out of
the registration statement prepared by or on behalf of the Company and for the
violation of any rule or regulation promulgated under the Securities Act or
state "blue sky" law.
9. Miscellaneous.
--------------
9.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions of this Agreement shall be binding upon, and inure to the benefit of,
the respective successors and assigns of the parties hereto.
9.2 AMENDMENTS. Except as otherwise expressly set forth in this Agreement,
any term of this Agreement may be amended or modified only with the written
consent of each of the parties hereto. No waivers of or exceptions to any term,
condition or provision of this Agreement in any one or more instances shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
9.3 REMEDIES. In case any one or more of the covenants or agreements set
forth in this Agreement shall have been breached by any party hereto, the other
party or parties may proceed to protect and enforce its or their rights either
by suit in equity or by action at law, including an action for damages as a
result of any such breach or an action for specific performance of any such
covenant or agreement contained in this Agreement. In the event that any action
shall be instituted in any court by a party hereto for breach of this Agreement,
the prevailing party shall be entitled to recover court costs and reasonable
attorney's fees in such amount or amounts as the court shall determine.
9.4 NOTICES. All notices, requests, consents and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first-class, certified or registered mail, return receipt requested,
postage prepaid:
8
<PAGE> 9
If to CAMBRIDGE NEUROSCIENCE
PARTNERS, INC. or CNSI: Cambridge NeuroScience, Inc.
One Kendall Square, Building 700
Cambridge, MA 02139
Attention: Harry W. Wilcox
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attention: William T. Whelan, Esq.
If to GLADSTONE: The J. David Gladstone Institutes
Purchaser O. Box 419100
San Francisco, CA 94141-9100
Attention: Dr. Robert W. Mahley
Executive Director
with a copy to: Richard Hille
J. David Gladstone Institutes
43 Corporate Park, Suite 102
Irvine, CA 92714
If to The Regents: The Regents of the University of California
Office of Technology Transfer
1320 Harbor Bay Parkway, Suite 150
Alameda, CA 94502
Attention: Terence A. Feuerborn
Executive Director
Research Administration and
Technology Transfer
UC Case No. 96-223
9.5 ENTIRE AGREEMENT. With respect to the subject matter hereof, this
Agreement together with the Option Agreement and the Sponsored Research and
Collaboration Agreement, embodies the entire agreement and understanding between
the Securityholders and the Company and supersedes in their entirety all prior
agreements and understandings relating to such subject matter; provided,
however, that in the event of any conflict between the provisions of this
Agreement and the provisions of the Option Agreement and/or the Sponsored
Research and Collaboration Agreement, the provision of this Agreement shall
prevail.
9.6 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9
<PAGE> 10
9.7 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision, provided, that no such severability shall be effective
if the result of such action materially changes the economic benefit of this
Agreement to Gladstone or The Regents.
9.8 HEADINGS. The headings of the Articles, Sections and subsections of
this Agreement have been added for convenience only and shall not be deemed to
be a part of this Agreement.
10
<PAGE> 11
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.
CAMBRIDGE NEUROSCIENCE CAMBRIDGE NEUROSCIENCE, INC.
PARTNERS, INC.
By: /s/ R. N. McBurney By: /s/ Elkan Gamzu
------------------------- --------------------------------
Name: R. N. McBurney Name: Elkan Gamzu
------------------------- -------------------------------
Title: President Title: President and CEO
------------------------ ------------------------------
Date: Date:
------------------------ -------------------------------
THE J. DAVID GLADSTONE THE REGENTS OF THE UNIVERSITY
INSTITUTES OF CALIFORNIA
By: /s/ Richard Brawerman By: /s/ Terence A. Feuerborn 12-19-96
------------------------- ------------------------------------
Richard Brawerman, Trustee Terence A. Feuerborn
Executive Director
Research Administration
and Technology Transfer
By: /s/ Albert A. Dorman
------------------------------
Albert A. Dorman, Trustee
Approved as to legal form: /s/ Edwin H. Baker 12/19/96
-----------------------------
Edwin H. Baker, Associate Resident Counsel Date
Office of Technology Transfer
University of California
By: /s/ Richard D. Jones
-----------------------------
Richard D. Jones, Trustee
11
