Research License Agreement

Exhibit 10.9 Confidential Treatment has been requested
for portions of this document marked with asterisks. RESEARCH AND LICENSE AGREEMENT This Agreement, effective as of April 1, 2006 (the " Effective Date" ), is by and between: NEW YORK UNIVERSITY (hereinafter " NYU" ), a corporation organized and existing under the laws of the State of New York and having a place of business at 70 Washington Square South, New York, New York 10012 AND INTELLECT NEUROSCIENCES, INC. (hereinafter " INI" ), a corporation organized and existing under the laws of the State of Delaware having its principal office at 7 West 18 th Street, 9 th Floor, New York, New York 10011. RECITALS WHEREAS, Drs. Blas Frangione, Thomas Wisniewski, and Einar Sigurdsson of NYU (hereinafter " the NYU Scientists" ) have made certain inventions relating to use of a vaccine for the mitigation, prophylaxis or treatment of Alzheimer' s Disease, all as more particularly described in the U.S. and foreign patent applications and patents owned by NYU, identified in annexed Appendix I, which forms an integral part hereof (hereinafter " the Pre-Existing Inventions" ); WHEREAS, NYU is willing to perform the NYU Research Project (as hereinafter defined); WHEREAS, INI is prepared to sponsor the NYU Research Project; WHEREAS, subject to the terms and conditions hereinafter set forth, NYU is willing to grant to INI and INI is willing to accept from NYU the License (as hereinafter defined); NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties hereto hereby agree as follows: 1. Definitions. 1.01. " Affiliate" shall mean any company or other legal entity which controls, or is controlled by, or is under common control with, INI; control means the holding of twenty five and one tenth percent (25.1%) or more of (i) the capital and/or (ii) the voting rights and/or (iii) the right to elect or appoint directors. 1.02. " Calendar Year" shall mean any consecutive period of twelve months commencing on the first day of January of any year. 1.03. " Date of First Commercial Sale" shall mean the date on which a Licensed Product is first offered for sale by INI or an Affiliate or sublicensee of INI.


Confidential Treatment has been requested
for portions of this document marked with asterisks. 1.04. " Field" shall mean the prophylaxis, mitigation and/or treatment of Alzheimer' s Disease. 1.05. " License" shall mean the exclusive worldwide license to practice the Research Technology (as hereinafter defined) for the development, manufacture, use and sale of the Licensed Products (as hereinafter defined) in the Field. 1.06. " Licensed Products" shall mean any vaccine for the mitigation, prophylaxis or treatment of Alzheimer' s Disease, covered by a claim of any unexpired NYU Patent (as hereinafter defined) which has not been disclaimed or held invalid by a court of competent jurisdiction from which no appeal can be taken, or which incorporates or is developed using NYU Know-How. 1.07. " Net Sales" shall mean the total amount invoiced in connection with sales of the Licensed Products to any person or entity that is not a Affiliate or a sublicensee of INI or a Affiliate under the License, after deduction of all the following to the extent applicable to such sales; i) all trade, case and quantity credits, discounts, refunds or rebates; ii) allowances or credits for returns; iii) sales commissions; and iv) sales taxes (including value-added tax). 1.08. " NYU Know-How" shall mean the Pre-Existing Inventions and any information and materials including, but not limited to, pharmaceutical, chemical, biological and biochemical products, technical and non-technical data, materials, methods and processes and any drawings, plans, diagrams, specifications and/or other documents containing such information, discovered, developed or acquired by, or on behalf of students or employees of NYU during the term and in the course of the NYU Research Project. 1.09. " NYU Patents" shall mean all United States and foreign patents and patent applications, and any divisions, continuations, in whole or in part, reissues, renewals and extensions thereof, and pending applications therefor: (1) which claim Pre-Existing Inventions and which are identified on annexed Appendix I; or (2) which claim inventions that are made, in whole or in part, by students or employees of NYU during the term and in the course of the NYU Research Project. 1.10. " Research Period" shall mean the 2-year period commencing on the Effective Date hereof and any extension thereof as to which NYU and INI shall mutually agree in writing.

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for portions of this document marked with asterisks. 1.11. " NYU Research Project" shall mean the investigations at NYU during the Research Period (as hereinafter defined) into the Field under the supervision of the NYU Scientist(s) in accordance with the research program, described in annexed Appendix II, which forms an integral part hereof. 1.12. " Research Technology" shall mean all NYU Patents and NYU Know-How. 2. Effective Date. This Agreement shall be effective as of the Effective Date and shall remain in full force and effect until it expires or is terminated in accordance with Section 16. hereof. 3. Performance of the NYU Research Project. 3.01. In consideration of the sums to be paid to NYU as set forth in Section 4 below, NYU undertakes to perform the NYU Research Project under the supervision of the NYU Scientists during the Research Period. If, during the Research Period all of the NYU Scientists shall cease to supervise the NYU Research Project, then NYU shall promptly so notify INI and INI shall have the option to terminate its funding of the NYU Research Project. INI shall promptly advise NYU in writing if INI so elects. Such termination of funding pursuant to this Section 3.01 shall not terminate this Agreement or the License granted herein. Nothing herein contained shall be deemed to impose an obligation on NYU to find a replacement for the NYU Scientists. 3.02. Nothing contained in this Agreement shall be construed as a warranty on the part of NYU that any results or inventions will be achieved by the NYU Research Project, or that the Research Technology and/or any other results or inventions achieved by the NYU Research Project, if any, are or will be commercially exploitable and furthermore, NYU makes no warranties whatsoever as to the commercial or scientific value of the Research Technology and/or as to any results which may be achieved in the NYU Research Project. 3.03. Within sixty (60) days after the end of each year of the Research Period, NYU shall prepare a written report summarizing the results of the work conducted on the NYU Research Project during the preceding year. 3.04. NYU will have full authority and responsibility for the NYU Research Project. All students and employees of NYU who work on the NYU Research Project will do so as employees or students of NYU, and not as employees of INI. 4. Funding of the NYU Research Project. 4.01. As compensation to NYU for work to be performed on the NYU Research Project during the Research Period, subject to any earlier termination of the Research Project pursuant to Section 3.01 hereof, INI will pay NYU the total sum of $200,000, payable in eight (8) equal consecutive quarterly installments of $25,000 each, commencing upon the Effective Date and on each of the three (3), six (6), nine (9), twelve (12), fifteen (15), eighteen (18), and twenty-one (21) month anniversaries thereof.

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for portions of this document marked with asterisks. 4.02. Nothing in this Agreement shall be interpreted to prohibit NYU (or the NYU Scientists) from obtaining additional financing or research grants for the NYU Research Project from government agencies, which grants or financing may render all or part of the NYU Research Project and the results thereof subject to the patent rights of the U.S. Government and its agencies, as set forth in Title 35 U.S.C. a7200 et seq . 5. Title. 5.01. Subject to the License granted to INI hereunder, it is hereby agreed that all right, title and interest, in and to the Research Technology, and in and to any drawings, plans, diagrams, specifications, and other documents containing any of the Research Technology shall vest solely in NYU. At the request of NYU, INI shall take all steps as may be necessary to give full effect to said right, title and interest of NYU including, but not limited to, the execution of any documents that may be required to record such right, title and interest with the appropriate agency or government office. 5.02. Subject to the License granted to INI hereunder, for so long as the NYU Scientists are employed by NYU, any and all inventions made by the NYU Scientists and relating to the Field shall be owned solely by NYU. 6. Patents and Patent Applications. 6.01. NYU will promptly disclose to INI in writing any inventions which constitute potential NYU Patents. INI will promptly disclose to NYU any inventions which constitute potential NYU Patents and which are conceived by employees or consultants of INI. 6.02. At the initiative of INI or NYU, the parties shall consult with each other regarding the prosecution of all patent applications with respect to the Research Technology. Such patent applications shall be filed, prosecuted and maintained by the law firm of Darby & Darby or by other patent counsel jointly selected by NYU and INI. Copies of all such patent applications and patent office actions shall be forwarded to each of NYU and INI. NYU and INI shall each also have the right to have such patent applications and patent office actions independently reviewed by other patent counsel separately retained by NYU or INI, upon prior notice to and consent of the other party, which consent shall not unreasonably be withheld. 6.03. Upon prior written approval by INI, all applications and proceedings with respect to the NYU Patents shall be filed, prosecuted and maintained by NYU at the expense of INI. Against the submission of invoices, INI shall reimburse NYU for all costs and fees incurred by NYU during the term of this Agreement, in connection with the filing, maintenance, prosecution, protection and the like of the NYU Patents. As of the Effective Date, INI has a credit of $11,659.97 for amounts paid under the Option Agreement dated August 31, 2005 between the parties which shall be credited against future amounts owed by INI for patent expenses under this Agreement. 6.04. NYU and INI shall assist, and cause their respective employees and consultants to assist each other, in assembling inventorship information and data for the filing and prosecution of patent applications on inventions pertaining to the Research Technology.

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for portions of this document marked with asterisks. 6.05. If at any time during the term of this Agreement INI decides that it is undesirable, as to one or more countries, to prosecute or maintain any patents or patent applications within the NYU Patents, it shall give prompt written notice thereof to NYU, and upon receipt of such notice INI shall be released from its obligations to bear all of the expenses to be incurred thereafter as to such countries in conjunction with such patent(s) or patent application(s) and such patent(s) or application(s) shall be deleted from the Research Technology and NYU shall be free to grant rights in and to the Research Technology in such countries to third parties, without further notice or obligation to INI, and the INI shall have no rights whatsoever to exploit the Research Technology in such countries. 6.06. Nothing herein contained shall be deemed to be a warranty by NYU that i) NYU can or will be able to obtain any patent or patents on any patent application or applications in the NYU Patents or any portion thereof, or that any of the NYU Patents will afford adequate or commercially worthwhile protection, or ii) that the manufacture, use, or sale of any element of the Research Technology or any Licensed Product will not infringe any patent(s) of a third party. 7. Grant of License. 7.01. Subject to the terms and conditions hereinafter set forth, NYU hereby grants to INI and INI hereby accepts from NYU the License. 7.02. NYU reserves the right to use, and to permit other non-commercial entities to use, the Research Technology for educational and research purposes other than conducting clinical trials. No license is granted to INI outside of the Field. 7.03. The parties acknowledge that the United States government retains rights in intellectual property funded under any grant or similar contract with a Federal agency. The License is expressly subject to all applicable United States government rights, including, but not limited to, any applicable requirement that products, which result from such intellectual property and are sold in the United States, must be substantially manufactured in the United States. 7.04. The License granted to INI in Section 7.01 hereto shall commence upon the Effective Date and shall remain in force on a country-by-country basis, if not previously terminated under the terms of this Agreement, for fifteen (15) years from the Date of First Commercial Sale in such country or until the expiration date of the last to expire of the NYU Patents whichever shall be later. INI shall inform NYU in writing of the Date of First Commercial Sale with respect to each Licensed Product in each country as soon as practicable after the making of each such first commercial sale. 7.05. INI shall be entitled to grant sublicenses under the License on terms and conditions in compliance and not inconsistent with the terms and conditions of this Agreement (except that the rate of royalty may be at higher rates than those set forth in this Agreement) (i) to a Affiliate or (ii) to other third parties for consideration and in an arms-length transaction. All

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for portions of this document marked with asterisks. sublicenses shall only be granted by INI under a written agreement, a copy of which shall be provided by INI to NYU as soon as practicable after the signing thereof. Each sublicense granted by INI hereunder shall be subject and subordinate to the terms and conditions of this License Agreement and shall contain (inter-alia) the following provisions: (1) the sublicense shall expire automatically on the termination of the License, provided that upon the request of any sublicensee in good standing, NYU shall grant to such sublicensee the same license which the sublicensee received under the sublicense with INI under an agreement in which such sublicensee shall pay to NYU the royalties and other payments which it would have paid to INI under the sublicense; (2) the sublicense shall not be assignable, in whole or in part; (3) the sublicensee shall not grant further sublicenses; and (4) both during the term of the sublicense and thereafter the sublicensee shall agree to a confidentiality obligation similar to that imposed on INI in Section 11 below, and that the sublicensee shall impose on its employees, both during the terms of their employment and thereafter, a similar undertaking of confidentiality; and (5) the sublicense agreement shall include the text of Sections 14 and 15 of this Agreement and shall state that NYU is an intended third party beneficiary of such sublicense agreement for the purpose of enforcing such indemnification and insurance provisions. 7.06. Within sixty (60) days after the Effective Date, INI may request in writing to add one or more additional indications of the Research Technology outside of the Field to the License. Upon receipt of such written request by NYU, the parties shall negotiate in good faith terms under which such additional indication(s) shall be added to the License, which terms shall include a mutually agreeable development plan with specific funding and development milestones, under which INI shall diligently develop the Research Technology for such additional indication(s). If the parties are unable to agree on such terms within sixty (60) days after INI' s written request to NYU, then INI shall have no further rights to such additional indication(s) and NYU shall be free to grant rights for such additional indication(s) to third parties. 8. Payments for License. 8.01. In consideration for the grant and during the term of the License with respect to each Licensed Product, INI shall pay to NYU: (a) a non-refundable, non-creditable license fee of two hundred thousand dollars ($200,000) according to the following schedule:on or before May 1, 2006: twenty-five thousand dollars ($25,000); on or before June 1, 2006: twenty-five thousand dollars ($25,000); on or before April 1, 2007: fifty thousand dollars ($50,000);

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for portions of this document marked with asterisks. on or before April 1, 2008: fifty thousand dollars ($50,000); and on or before April 1, 2009: fifty thousand dollars ($50,000). (b) upon the achievement of the following technical milestones, with respect to each Licensed Product, the payments as indicated below: Milestone Payments i) Upon commencement of the first Phase III clinical trial of a Licensed Product *** ii) Upon receipt of the first approval to market a Licensed Product in the U.S., the European Economic Community, or Japan *** (c) A royalty of *** of the Net Sales of INI or of Affiliate or of a sublicensee of INI or Affiliate; provided that if INI is required to obtain a license from a third party in order to manufacture, use, or sell a Licensed Product, then INI may deduct the royalties paid to the third party from the royalties payable to NYU, provided that the royalties payable to NYU shall not be reduced to less than *** of Net Sales; and (d) a percentage of any consideration, monetary or otherwise (not based on Net Sales), received by INI from a sublicensee of INI (not being a Affiliate) under the terms of, or as a consideration for the grant of, a sublicense of any rights or for grant of an option to acquire such a sublicense to the Research Technology, which percentage shall be equal to *** if the sublicense or option is entered into after the start of the first Phase I clinical trial of a Licensed Product, and *** if the sublicense or option is entered into prior to the start of the first Phase I clinical trial of a Licensed Product; provided that if such consideration also includes consideration for INI sublicensing rights acquired from a third party necessary to make, use, or sell a Licensed Product, then INI may deduct the percentage of sublicense consideration paid to the third party from the percentage of sublicense revenue payable to NYU hereunder, provided that the percentage of sublicense revenue payable to NYU hereunder shall not be reduced to less than *** of what it otherwise would have been. 8.02. Beginning with Calendar Year 2010 and continuing thereafter until this Agreement shall terminate or expire, INI agrees that if the total royalties paid to NYU under subsection 8.01(c) hereof do not amount to one hundred thousand dollars ($100,000) in each

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for portions of this document marked with asterisks. Calendar Year, INI will pay to NYU within sixty (60) days after the end of each such Calendar Year, as additional royalty, the difference between the amount of the total royalties paid to NYU by INI in such Calendar Year and one hundred thousand dollars ($100,000), failing which NYU shall have the right solely at its election, upon written notice to INI, to either terminate this Agreement for cause or to declare the License granted herein to INI to be non-exclusive. 8.03. For the purpose of computing the royalties due to NYU hereunder, the year shall be divided into four parts ending on March 31, June 30, September 30, and December 31. Not later than sixty (60) days after each December, March, June, and September in each Calendar Year during the term of the License, INI shall submit to NYU a full and detailed report of royalties or payments due NYU under the terms of this Agreement for the preceding quarter year (hereinafter " the Quarter-Year Report" ), setting forth the Net Sales and/or lump sum payments and all other payments or consideration from sublicensees upon which such royalties are computed and including at least i) the quantity of Licensed Products used, sold, transferred or otherwise disposed of; ii) the selling price of each Licensed Product; iii) the deductions permitted under subsection 1.07 hereof to arrive at Net Sales; and iv) the royalty computations and subject of payment. If no royalties or other payments are due, a statement shall be sent to NYU stating such fact. Payment of the full amount of any royalties or other payments due to NYU for the preceding quarter year shall accompany each Quarter-Year Report on royalties and payments. INI shall keep for a period of at least six (6) years after the date of entry, full, accurate and complete books and records consistent with sound business and accounting practices and in such form and in such detail as to enable the determination of the amounts due to NYU from INI pursuant to the terms of this Agreement. 8.04. Within sixty (60) days after the end of each Calendar Year, commencing on the Date of First Commercial Sale INI shall furnish NYU with a report (hereinafter " the Annual Report" ), certified by an independent certified public accountant, relating to the royalties and other payments due to NYU pursuant to this Agreement in respect of the Calendar Year covered by such Annual Report and containing the same details as those specified in Section 8.03 above in respect of the Quarter-Year Report. 8.05. On reasonable notice and during regular business hours, NYU or the authorized representative of NYU shall each have the right to inspect the books of accounts, records and other relevant documentation of INI or of Affiliate and the sublicensees of INI insofar as they relate to the production, marketing and sale of the Licensed Products, in order to ascertain or verify the amount of royalties and other payments due to NYU hereunder, and the accuracy of the information provided to NYU in the aforementioned reports. The cost of such inspection shall be borne by NYU, unless it is determined in such inspection that NYU has been underpaid

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for portions of this document marked with asterisks. in any period by more than five percent (5%) of the amount which NYU should have been paid, in which case the cost of such inspection shall be reimbursed to NYU by INI. 9. Method of Payment. 9.01. Royalties and other payments due to NYU hereunder shall be paid to NYU in United States dollars. Any such royalties on or other payments relating to transactions in a foreign currency shall be converted into United States dollars based on the closing buying rate of the Morgan Guaranty Trust Company of New York applicable to transactions under exchange regulations for the particular currency on the last business day of the accounting period for which such royalty or other payment is due. 9.02. INI shall be responsible for payment to NYU of all royalties due on sale, transfer or disposition of Licensed Pro ...