EXHIBIT 10.54
Certain confidential information contained in this
document, marked by brackets, is filed with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.
RESEARCH AND DEVELOPMENT AGREEMENT
between
ARQULE, INC.
and
SUGEN, INC.
TABLE OF CONTENTS
Page
1. Definitions.............................................................. 1.
1.1 "Active Homolog"................................................ 1.
1.2 "Active Sugen Compound"......................................... 1.
1.3 "Affiliate"..................................................... 1.
1.4 "Array"......................................................... 2.
1.5 "Base Rate of Interest"......................................... 2.
1.6 "Confidential Information"...................................... 2.
1.7 "Directed Array"................................................ 2.
1.8 "Directed Array Program......................................... 2.
1.9 "Field"......................................................... 2.
1.10 "Licensed Compound"............................................. 2.
1.11 "Materials"..................................................... 2.
1.12 "Mapping Array"................................................. 2.
1.13 "Net Sales"..................................................... 3.
1.14 "Net Sales Price"............................................... 3.
1.15 "Party.......................................................... 3.
1.16 "Patent Rights.................................................. 3.
1.17 "Preclinical Development"....................................... 3.
1.18 "Proprietary Materials"......................................... 3.
1.19 "Research Committee"............................................ 3.
1.20 "Research Plan"................................................. 3.
1.21 "Research Program".............................................. 4.
1.22 "Research Results".............................................. 4.
1.23 "Royalty-Bearing Product"....................................... 4.
1.24 "Royalty Period"................................................ 4.
1.25 "Sublicensee"................................................... 4.
1.26 "Sublicense Revenue............................................. 4.
1.27 "Substantial Homology".......................................... 4.
1.28 "Sugen Compound"................................................ 4.
1.29 "Sugen Derivative Compound"..................................... 4.
1.30 "Target"........................................................ 5.
2. Management of Research Program........................................... 5.
2.1 Research Committee.............................................. 5.
2.1.1 Creation of Research Committee......................... 5.
2.1.2 Meetings of the Research Committee..................... 5.
2.1.3 Decisions of Research Committee........................ 5.
2.1.4 Responsibilities of Research Committee................. 5.
2.1.5 Research Committee Reports............................. 6.
2.1.6 Business Deadlock...................................... 6.
i.
TABLE OF CONTENTS
(continued)
Page
3. License Grants........................................................... 6.
3.1 Screening Licenses.............................................. 6.
3.2 Development Licenses............................................ 6.
3.3 Commercialization Licenses...................................... 6.
3.3.1 Grant of License by ArQule to Sugen.................... 6.
3.3.2 Grant of Licenses by Sugen to ArQule................... 7.
3.3.3 Other Licenses......................................... 7.
3.4 Diligence....................................................... 7.
4. Collaborative Research Program........................................... 7.
4.1 Nature of Relationship.......................................... 7.
4.2 Conduct of Research Program..................................... 7.
4.3 Directed Array Program.......................................... 8.
4.3.1 Conduct of Directed Array Program...................... 8.
4.3.2 Completion of Testing.................................. 8.
4.4 Designation of Licensed Compounds............................... 8.
4.5 Disclosure of Research Results.................................. 8.
4.6 Research Records................................................ 8.
4.7 Payment of Costs and Expenses................................... 9.
5. Ownership of Sugen Compounds............................................. 9.
6. Intellectual Property Rights............................................. 9.
6.1 Ownership of Patent Rights...................................... 9.
6.2 Management of Joint Patent Rights...............................10.
6.3 Cooperation of the Parties......................................10.
6.4 Infringement by Third Parties...................................10.
7. Royalties; Sublicense Revenues; Reports..................................11.
7.1 Royalty Payments................................................11.
7.1.1 Sugen Royalty Payments.................................11.
7.1.2 ArQule Payments........................................11.
7.2 Reports and Payments............................................11.
7.3 Payments in U.S. Dollars........................................11.
7.4 Payments in Other Currencies....................................12.
7.5 Late Payments...................................................12.
8. Records; Inspection......................................................12.
8.1 Records.........................................................12.
ii.
TABLE OF CONTENTS
(continued)
Page
8.2 Inspection......................................................12.
9. Proprietary Materials....................................................12.
9.1 Ownership of Proprietary Materials..............................12.
9.2 Use of Proprietary Materials....................................13.
9.3 Transfer of Proprietary Materials...............................13.
9.4 Disposition of Unused Proprietary Materials.....................13.
10. Confidential Information.................................................13.
10.1 Confidential Information........................................13.
11. Term and Termination.....................................................15.
11.1 Term............................................................15.
11.2 Termination for Breach..........................................15.
11.3 Force Majeure...................................................15.
11.4 Effect of Termination...........................................15.
11.5 Survival of Provisions..........................................15.
12. Miscellaneous............................................................15.
12.1 Publicity.......................................................15.
12.2 Relationship of Parties.........................................15.
12.3 Dispute Resolution..............................................16.
12.4 Counterparts....................................................16.
12.5 Headings........................................................16.
12.6 Binding Effect..................................................16.
12.7 Assignment......................................................16.
12.8 Notices.........................................................16.
12.9 Amendment and Waiver............................................17.
12.10 Governing Law...................................................17.
12.11 Severability....................................................17.
12.12 Entire Agreement................................................18.
12.13 Indemnification.................................................18.
iii.
RESEARCH COLLABORATION AGREEMENT
THIS RESEARCH COLLABORATION AGREEMENT (this "Agreement") is entered
into as of September 4, 1996 (the "Effective Date") by and between ARQULE, INC.,
a Delaware corporation ("ArQule"), and SUGEN, INC., a Delaware corporation
("Sugen").
RECITALS
WHEREAS, Sugen is engaged in research involving the evaluation and
analysis of compounds related to the inhibition of tyrosine, serine and
threonine kinases;
WHEREAS, ArQule has developed certain proprietary technology enabling
it to synthesize arrays of small organic molecules suitable for screening in
molecular assays;
WHEREAS, Sugen and ArQule desire to collaborate on research directed
towards the discovery and development of new compounds by testing certain
compound arrays produced by ArQule from compounds provided by Sugen against
selected chemical targets specified by Sugen; and
WHEREAS, ArQule has developed certain proprietary compounds which can
be used to facilitate the discovery and development of new compounds from
compounds provided by Sugen; and
WHEREAS, Sugen and ArQule desire to commercialize any new compounds so
developed on the terms and subject to the conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Parties hereby agree as follows:
1. DEFINITIONS.
1.1 "Active Homolog" shall mean any Sugen Derivative Compound that
exhibits Substantial Homology with an Active Sugen Compound as determined by
Sugen using appropriate business and scientific criteria.
1.2 "Active Sugen Compound" shall mean any Sugen Derivative Compound
which exhibits confirmed significant functional activity against a Target as
defined by Sugen using appropriate business and scientific criteria; provided,
however, that Sugen shall receive input and guidance from the Research Committee
with respect to the number of Active Sugen Compounds that are subject to this
Research Program.
1.3 "Affiliate" shall mean any person or entity which, directly or
indirectly, controls, or is controlled by, a party. For purposes of this
definition, "control" means the ownership, directly or indirectly, of more than
fifty percent (50%) of the outstanding equity securities of
1.
CONFIDENTIAL TREATMENT REQUESTED
a corporation entitled to vote in the election of directors or a more than fifty
percent (50%) interest in the net assets or profits of an entity which is not a
corporation.
1.4 "Array" shall mean a set of [ ]
that are synthesized by ArQule using its proprietary technology and arranged in
a format such as a microtiter screening plate.
1.5 "Base Rate of Interest" shall mean the rate of interest declared
from time to time by the Bank of Boston as being its prime rate.
1.6 "Confidential Information" shall mean any confidential, secret, or
proprietary information regardless of whether such information is in written,
oral (provided any such oral information is reduced to writing within thirty
(30) days), electronic, or other form (a) resulting from or related to the
Research Program or (b) relating to the scientific and business affairs of
either Party (and not otherwise described in clause (a)) and which is
specifically designated as "Confidential". Such Confidential Information shall
include, without limitation, the results of any tests conducted in connection
with the Research Program, all Research Committee reports, the screening systems
used to identify Active Sugen Compounds and the compositions of the Sugen
Compounds and Sugen Derivative Compounds. Such Confidential Information may also
include, without limitation, trade secrets, know-how, inventions, technical data
or specifications, testing methods, business or financial information, research
and development activities, product and marketing plans, and customer and
supplier information.
1.7 "Directed Array" shall mean any Array comprised of Sugen Derivative
Compounds synthesized by ArQule under the Directed Array Program as set forth in
Section 4.3.
1.8 "Directed Array Program" shall mean the Directed Array component of
the Research Program as set forth in Section 4.3.
1.9 "Field" shall mean each field described on Exhibit B attached
hereto.
1.10 "Licensed Compound" shall mean any Active Sugen Compound or Active
Homolog thereto with respect to which Sugen, using one or more of the criteria
set forth on Exhibit C hereto, has elected to conduct Preclinical Development.
1.11 "Materials" shall mean any tangible research materials, whether
biological, chemical, physical, or otherwise.
1.12 "Mapping Array" shall mean an Array of [ ]
(which may include, without limitation, [ ], but may not include
[ ] and which are licensed from time to time by ArQule to
third parties on a non-exclusive basis for [ ].
2.
CONFIDENTIAL TREATMENT REQUESTED
1.13 "Net Sales" shall mean the aggregate Net Sales Price of
Royalty-Bearing Products in any Royalty Period.
1.14 "Net Sales Price" shall mean the gross amount received on sales by
either Party and its Affiliates of Royalty-Bearing Products, less the following:
[
] In any
transfers of Royalty-Bearing Products between such Party and an Affiliate, the
Net Sales Price shall be calculated based on the final sale of the
Royalty-Bearing Product to an independent third party. In the event that such
Party receives non-monetary consideration for any Royalty-Bearing Products, the
Net Sales Price shall be calculated based on the average price charged by such
Party for such Royalty-Bearing Products during the preceding Royalty Period.
1.15 "Party" means ArQule or Sugen or their respective Affiliates;
"Parties" means ArQule and Sugen and their respective Affiliates.
1.16 "Patent Rights" shall mean all Valid Claims of all issued and
unexpired patents and reissues, reexaminations, extensions and supplementary
protection certificates thereof and all patent applications and any divisions,
continuations, or continuations-in-part thereof or patents issuing thereon. For
the purposes of this Section, "Valid Claim" shall mean either (a) a claim of an
issued patent that has not been held unenforceable or invalid by an agency or a
court of competent jurisdiction in any unappealable or unappealed decision or
(b) a claim that is based upon a specification of a pending patent application
that has not been abandoned or finally rejected without the possibility of
appeal or refiling and that has been pending in the U.S. Patent Office for less
than five (5) years or in the Japanese Patent Office for less than seven (7)
years.
1.17 "Preclinical Development" shall mean, with respect to a Licensed
Compound, the testing of the Licensed Compound in appropriate systems in order
to meet regulatory requirements for a United States Investigational New Drug
Application which, except as may be otherwise agreed to by the Research
Committee, shall include one or more of the following: (a) demonstration of
potency and efficacy in validated animal models, (b) compiling an animal
pharmacology profile, (c) testing of acute toxicity and (d) toxicology testing,
including histopathology of vital organs, all as appropriate for the disease
indication and compound selected.
1.18 "Proprietary Materials" shall mean any Materials that were
developed by a Party prior to or outside the performance of the Research
Program; provided, however, that Proprietary Materials shall not include Sugen
Derivative Compounds, Active Sugen Compounds or any Active Homologs thereto.
1.19 "Research Committee" shall mean the Research Committee described
in Section 2.1.
1.20 "Research Plan" shall mean the Research Plan attached hereto as
Exhibit A, as revised by the Research Committee from time to time.
3.
CONFIDENTIAL TREATMENT REQUESTED
1.21 "Research Program" shall mean the collaborative research program
described in Section 4 of this Agreement.
1.22 "Research Results" shall mean any inventions (including
Materials), laboratory notes, technical data or specifications, test results, or
other information or materials that arise as a result of the Research Program.
1.23 "Royalty-Bearing Product" shall mean a product covered by Joint
Patent Rights containing as one of its constituents (a) any Active Sugen
Compound and/or any Active Homolog thereto; (b) any other compound discovered or
designed by Sugen as a direct result of information provided by ArQule to Sugen
under the Directed Array Program; or (c) any other compound discovered or
designed by ArQule or any third party customer or collaborator of ArQule from a
Sugen Compound or a Sugen Derivative Compound.
1.24 "Royalty Period" shall mean every calendar quarter, or partial
calendar quarter, commencing on the date of the first commercial sale of a
Royalty-Bearing Product in any country and continuing until the last calendar
quarter during which any Royalty-Bearing Product is sold in any country.
1.25 "Sublicensee" shall mean any non-Affiliate third party licensed by
either Party to make, use or sell any Royalty-Bearing Product.
1.26 "Sublicense Revenue" shall mean any payments that are received by
a Party from a Sublicensee, including all initial payments, royalties, milestone
payments and other periodic payments in connection with the sublicensing of any
Royalty-Bearing Product, but excluding [
]
1.27 "Substantial Homology" shall mean an alteration from an Active
Sugen Compound at [ ] sites where no more than [ ] atoms are altered
in total; e.g., [
]
1.28 "Sugen Compound" shall mean any chemical compound provided by
Sugen or its Affiliates to ArQule under the Directed Array Program. Examples of
such compounds are shown in Exhibit D, which may be updated by Sugen from time
to time in writing.
1.29 "Sugen Derivative Compound" shall mean a chemical compound
synthesized by ArQule under the Directed Array Program in [ ] steps from
another chemical compound by a process of [ ] of [ ] component
4.
CONFIDENTIAL TREATMENT REQUESTED
wherein [ ] structural feature is retained at each process step. The number of
intermediate steps or compounds is not relevant to the classification of a
compound as a Sugen Derivative Compound. A compound need not have structural
similarity to another compound in order to be classified as a Sugen Derivative
Compound. The term excludes those compounds synthesized by Sugen prior to
signing this Agreement.
1.30 "Target" shall mean any target in the Field selected by Sugen for
which Sugen has certain proprietary technology and/or expertise.
2. MANAGEMENT OF RESEARCH PROGRAM.
2.1 Research Committee.
2.1.1 Creation of Research Committee. The Parties hereby
create a Research Committee which shall consist of [ ] members, [ ] of which
shall be designated by ArQule and [ ] of which shall be designated by Sugen at
any time. The chairperson of the Research Committee shall be designated annually
on an alternating basis between the Parties, who shall initially be Xxxxxx X.
Xxxxx, Xx. The Party not designating the chairperson shall designate one of its
representatives as secretary to the Research Committee for such year.
Each member of the Research Committee shall have equal voting rights.
2.1.2 Meetings of the Research Committee. Regular meetings of
the Research Committee shall be held with such frequency as the Parties may deem
appropriate, at such times and places as the members of the Research Committee
shall from time to time agree. Special meetings of the Research Committee may be
called by either Party on ten (10) days' written notice to the other Party
unless notice is waived by the Parties. All meetings shall alternate between the
offices of the Parties unless the Parties otherwise agree. The chairperson shall
be responsible for sending notice of meetings to all members.
2.1.3 Decisions of Research Committee. A quorum of the
Research Committee shall be present at any meeting of the Research Committee if
at least one representative of each Party is present at such meeting in person
or by telephone. If a quorum exists at any meeting, the unanimous consent of all
members of the Research Committee present at such meeting is required to take
any action on behalf of the Research Committee. Unless otherwise specifically
stated to the contrary herein, no individual Party shall purport to act on
behalf of the other Party unless and then only to the extent authorized to do so
by the Research Committee.
2.1.4 Responsibilities of Research Committee. The Research
Committee shall be responsible for the day-to-day conduct and progress of the
Research Program, including, without limitation:
(i) directing and administering the Research
Program;
(ii) providing a forum for the exchange of
scientific information among the scientists
participating in the Research Program;
5.
(iii) reviewing test reports provided by Sugen as
to the significant functional activity
derived from testing Directed Arrays and,
based on such results, recommending to
ArQule whether to develop additional
Directed Arrays for any Active Sugen
Compound;
(iv) providing guidance to Sugen with respect to
the number of Active Sugen Compounds that
are subject to this Research Program;
(v) resolving matters involving scientific
questions; and
(vi) updating the Research Plan.
2.1.5 Research Committee Reports. Within ten (10) days
following each meeting of the Research Committee held pursuant to Section 2.1.2,
the secretary of the Research Committee shall prepare and send to each Party a
written report of actions taken at the meeting in such form and containing such
detail as shall be determined by the Research Committee.
2.1.6 Business Deadlock. In the event that the Research
Committee cannot agree with respect to a matter that is subject to its
decision-making authority, then the matter shall be resolved in accordance with
Section 12.3.
3. LICENSE GRANTS.
3.1 Screening Licenses. ArQule hereby grants to Sugen an exclusive,
royalty-free license (without the right to sublicense) to (i) test any Sugen
Derivative Compounds for significant functional activity against Targets within
the Field and (ii) and to conduct such additional tests on any such Sugen
Derivative Compounds within the Field prior to Preclinical Development as Sugen
may from time to time determine. Notwithstanding the foregoing, Sugen may from
time to time deliver Sugen Derivative Compounds to one or more third parties so
as to allow such third parties to perform testing and analytical work on any
such Sugen Derivative Compounds; provided, that, prior to delivery of any Sugen
Derivative Compounds to any such third party, Sugen and each such third party
enter into a materials transfer agreement in a form reasonably acceptable to
ArQule.
3.2 Development Licenses. Upon the identification by Sugen of any
Active Sugen Compound or any Active Homolog thereto and the determination by
Sugen that such Active Sugen Compound or any Active Homolog thereto should
properly be designated as a Licensed Compound, ArQule shall grant to Sugen,
under any intellectual property rights covering the composition, manufacture or
use of such Licensed Compound, an exclusive, royalty-free license to conduct
Preclinical Development of such Licensed Compound.
3.3 Commercialization Licenses.
3.3.1 Grant of License by ArQule to Sugen. ArQule hereby
grants to Sugen an exclusive, royalty-bearing license (with the right to grant
sublicenses) (i) to make or have
6.
made Licensed Compounds for use, distribution and sale within the Field, and
(ii) to distribute for sale and sell Licensed Compounds within the Field.
3.3.2 Grant of Licenses by Sugen to ArQule. Sugen hereby
grants to ArQule an exclusive, royalty-bearing, worldwide license (with the
right to grant sublicenses) to incorporate Sugen Derivative Compounds which are
not Sugen Compounds, Active Sugen Compounds or Licensed Compounds in any Mapping
Arrays to be provided by ArQule to its third party customers and collaborators
for screening only outside the Field; provided, that, prior to delivering such
Sugen Derivative Compounds to any such third party customer or collaborator,
ArQule and each such third party customer or collaborator enter into a materials
transfer agreement in a form reasonably acceptable to Sugen. In connection with
the grant of the license described in this Section 3.3.2, Sugen agrees that (i)
ArQule may grant royalty-bearing world-wide licenses solely under Joint Patent
Rights to any third parties to commercialize products derived from Sugen
Derivative Compounds which are not Sugen Compounds, Active Sugen Compounds or
Licensed Compounds included in any such Mapping Arrays outside the Field, (ii)
ArQule may conduct Preclinical Development of any such Sugen Derivative
Compounds or products derived therefrom but may not itself commercialize any
such Sugen Derivative Compounds or products derived therefrom, (iii) Sugen shall
not grant to any third party a license to permit Sugen Derivative Compounds to
be included in any screening program competitive with ArQule's Mapping Array
Program and (iv) Arqule shall not grant to any third party a license to permit
Sugen Derivative Compounds or any compound discovered or designed by ArQule or
any third party customer or collaborator of ArQule from a Sugen Compound or a
Sugen Derivative Compound to be used within the Field.
3.3.3 Other Licenses. Each Party hereby agrees that no other
license is granted by either Party to any of its existing or future intellectual
property other than as is expressly described in this Agreement.
3.4 Diligence. ArQule agrees to use reasonable commercial efforts to
develop and market Mapping Arrays based on or incorporating Sugen Derivative
Compounds for which it has obtained a license under Section 3.3.2, using a level
of effort consistent with that used for other Mapping Arrays having similar
commercial potential.
4. COLLABORATIVE RESEARCH PROGRAM.
4.1 Nature of Relationship. The purpose of this research collaboration
is to identify Sugen Derivative Compounds which demonstrate certain functional
activity against selected Targets and to develop and/or license to corporate
parties compounds so identified within the Field.
4.2 Conduct of Research Program. Unless earlier terminated in
accordance with Section 11 of this Agreement, the Research Program shall be
conducted by the Parties in accordance with the Research Plan attached hereto as
Exhibit A, as amended from time to time by the Research Committee, and as
described in this Section 4.
7.
CONFIDENTIAL TREATMENT REQUESTED
4.3 Directed Array Program.
4.3.1 Conduct of Directed Array Program. Under the direction
of the Research Committee and in accordance with the Research Plan, ArQule will
synthesize Sugen Derivative Compounds from Sugen Compounds in such quantities
and at such times as shall be determined by the Research Committee in accordance
with Section 2.1.4. The Parties intend that ArQule will produce approximately
[ ] of each Sugen Derivative Compound in the Directed Arrays,
subject to the availability of the original Sugen Compounds; provided, however;
that the amount of each Sugen Derivative Compound that ArQule actually produces
under the Directed Array Program will ultimately be determined by the Research
Committee. Promptly upon its receipt of any such Directed Array, Sugen shall
commence testing of such Directed Array for activity against Targets; provided,
however, that it is the intention of the Parties that (i) the initial shipment
of Directed Arrays based on Sugen Compounds be delivered by ArQule to Sugen on
or before [ ] and (ii) the initial screening of such Directed
Arrays be completed by Sugen on or before [ ]. Promptly upon
the completion by Sugen of its testing of each Directed Array, Sugen shall
provide the Research Committee with notice of the discovery of Active Sugen
Compounds, together with relevant information concerning the functional activity
identified. Under the direction of the Research Committee and in accordance with
the Research Plan, ArQule will thereafter provide Sugen with additional
quantities [ ] of each such Active Sugen Compound so as
to enable Sugen to conduct additional testing or Preclinical Development of such
Active Sugen Compound.
4.3.2 Completion of Testing. The Parties shall continue the
procedure described in Section 4.3.1 for each Active Sugen Compound until the
earliest to occur of (i) the determination by Sugen to cease further testing of
such Active Sugen Compound, or (ii) the termination of this Agreement in
accordance with Section 11.
4.4 Designation of Licensed Compounds. The Parties hereby acknowledge
and agree that Sugen, in making its determination as to whether to designate any
Active Sugen Compound as a Licensed Compound, shall use the good scientific and
business criteria set forth on Exhibit C attached hereto, it being the intention
of the Parties that such criteria shall be used as the basis for determining
whether any Active Sugen Compound shall also be designated as a Licensed
Compound.
4.5 Disclosure of Research Results. Each Party agrees to promptly and
regularly communicate all Research Results to the other Party. Without limiting
the generality of the foregoing, each Party agrees to provide the Research
Committee with quarterly reports detailing all tests conducted and results
obtained by such Party in connection with the Research Program.
4.6 Research Records. Each Party shall prepare and maintain adequate
records, including bound laboratory notebooks maintained in accordance with
standard scientific procedures, containing all appropriate data reflecting the
Research Results. In addition, each Party shall retain under appropriate
conditions any necessary or desirable samples of Materials that constitute
Research Results.
8.
CONFIDENTIAL TREATMENT REQUESTED
4.7 Payment of Costs and Expenses. Each Party shall bear the costs and
expenses of its respective activities in connection with the Research Program
and shall promptly make payments to third parties arising therefrom.
5. OWNERSHIP OF SUGEN COMPOUNDS.
All Sugen Compounds shall be owned by Sugen or its Affiliates, except,
and only to the extent that, with respect to the Directed Array Program, ArQule
can show that any such compound [
] prior to
Sugen's description of such Sugen Compound in any written documentation.
6. INTELLECTUAL PROPERTY RIGHTS.
6.1 Ownership of Patent Rights.
(a) Sugen Patent Rights. Any Patent Rights filed by either
Party after the Effective Date of this Agreement claiming Sugen
Compounds will be owned solely by Sugen.
(b) Joint Patent Rights. Any Patent Rights conceived after the
Effective Date of this Agreement filed by either Party [
] Each of the Parties
hereby agrees that it will not practice or license such Joint Patent
Rights to any third party except as follows: [
]
provided, however, that if any such license involves an exclusive
license to commercialize a product covered by Joint Patent Rights, the
Party licensing such Joint Patent Rights shall notify the other Party
prior to the execution of any such license.
(c) Breach. If either Party shall practice or grant any
license to a third party in violation of Section 6.1(b) above, the
licensed Joint Patent Rights will immediately vest solely in the
non-granting Party and the license granted will be automatically and
immediately rescinded. The granting Party may prevent such vesting by
obtaining the written consent of the non-granting Party, which consent
will not be unreasonably withheld.
9.
CONFIDENTIAL TREATMENT REQUESTED
(d) Other Patent Rights. All other Patent Rights are owned
according to existing laws.
6.2 Management of Joint Patent Rights. In the case of Joint Patent
Rights, the Parties shall agree on the allocation of responsibility for, and the
expense of, the preparation, filing, prosecution, and maintenance of any Joint
Patent Rights claiming such inventions. In the event of any disagreement
concerning any Joint Patent Rights, the matter shall be resolved by the Research
Committee or, in the absence thereof, by the President of ArQule and the
Executive Vice President-Research of Sugen. The Party controlling a Joint Patent
Right shall consult with the other party as to the preparation, filing,
prosecution, and maintenance of such Joint Patent Right reasonably prior to any
deadline or action with the U.S. Patent & Trademark Office or any foreign patent
office, and shall furnish to the other Party copies of all relevant documents
reasonably in advance of such consultation. In the event that the Party
controlling a Joint Patent Right desires to abandon such Joint Patent Right, or
if the Party assuming control of a Joint Patent Right later declines
responsibility for such Joint Patent Right, the controlling Party shall provide
reasonable prior written notice to the other Party of such intention to abandon
or decline responsibility, and such other Party shall have the right, at its
expense, to prepare, file, prosecute, and maintain such Joint Patent Rights.
6.3 Cooperation of the Parties. The Parties hereby agree to file
appropriate applications for Patent Rights prior to taking any action, or
failing to take any action, that would jeopardize or prevent the obtaining of
commercially reasonable patent protection in the [
] under the Patent Rights. Each Party further agrees
to cooperate fully in the preparation, filing, and prosecution of any Patent
Rights under this Agreement. Such cooperation includes, but is not limited to:
(a) executing all papers and instruments, or requiring its
employees or agents, to execute such papers and instruments, so as to
effectuate the ownership of Patent Rights set forth in Section 6.1
above and to enable the other Party to apply for and to prosecute
patent applications in any country;
(b) promptly informing the other Party of any matters coming
to a Party's attention that may affect the preparation, filing, or
prosecution of any such patent applications; and
(c) undertaking no actions that are potentially deleterious to
the preparation, filing, or prosecution of such patent applications.
6.4 Infringement by Third Parties. ArQule and Sugen shall each promptly
notify the other in writing of any alleged or threatened infringement by a third
party of any Joint Patent Right of which they become aware. The Parties shall
consult concerning the action(s) to be taken.
10.
CONFIDENTIAL TREATMENT REQUESTED
7. ROYALTIES; SUBLICENSE REVENUES; REPORTS.
7.1 Royalty Payments.
7.1.1 Sugen Royalty Payments. In consideration of the licenses
granted to Sugen hereunder, Sugen shall pay to ArQule, during the Royalty
Period, as applicable (A) (i) a royalty of [ ] of Net Sales by Sugen or any
Affiliate of any Royalty-Bearing Product in the United States and (ii) a royalty
of [ ] of Net Sales by Sugen or any Affiliate of any Royalty-Bearing Product in
all other countries or (B) [
] of any Sublicense Revenues received by Sugen from any Sublicensee
in connection with its sublicensing of any Royalty-Bearing Product in any
country.
7.1.2 ArQule Payments. In consideration of the license granted
to ArQule hereunder, ArQule shall pay to Sugen, during the Royalty Period, [ ]
of any Sublicense Revenue received by ArQule from any Sublicensee in connection
with its sublicensing of any Royalty-Bearing Product.
7.2 Reports and Payments. Within [ ] days after the conclusion of each
Royalty Period, each Party shall deliver to the other Party a report containing
the following information:
[
.]
All such reports shall be maintained in confidence by the Parties. If no
royalties are due to any Party for any reporting period, the report shall so
state. Concurrent with each such report, the Party delivering the report shall
remit to the other Party any payment due for the applicable Royalty Period with
the method of payment mutually agreed to by the Parties. All amounts payable to
the Parties under this Section 7.2 will first be calculated in the currency of
sale and then converted into U.S. dollars in accordance with Section 7.3, and
such amounts shall be paid without deduction of any withholding taxes,
value-added taxes, or other charges applicable to such payments.
7.3 Payments in U.S. Dollars. All payments due under this Agreement
shall, except as provided in Section 7.4 below, be payable in United States
dollars. Conversion of foreign currency to U.S. dollars shall be made at the
average conversion rate existing in the United States (as reported in the Wall
Street Journal) during the last calendar quarter preceding the applicable
calendar quarter. Such payments shall be without deduction of exchange,
collection, or other charges.
11.
CONFIDENTIAL TREATMENT REQUESTED
7.4 Payments in Other Currencies. If by law, regulation, or fiscal
policy of a particular country, conversion into United States dollars or
transfer of funds of a convertible currency to the United States is restricted
or forbidden, the paying Party shall give the other Party prompt written notice
of such restriction, which notice shall satisfy the [ ] payment
deadline described in Section 7.2. Such paying Party shall pay any amounts due
the other Party through whatever lawful methods such other Party reasonably
designates; provided, however, that if such other Party fails to designate such
payment method within [ ] days after it is notified of the restriction,
then the paying Party may deposit such payment in local currency to the credit
of the other Party in a recognized banking institution selected by the paying
Party and identified by written notice to the other Party, and such deposit
shall fulfill all obligations of the paying Party to the other Party with
respect to such payment.
7.5 Late Payments. Any payments by any Party that are not paid on or
before the date such payments are due under this Agreement shall bear interest,
to the extent permitted by law, at [ ] above the Base Rate of Interest
calculated based on the number of days that payment is delinquent.
8. RECORDS; INSPECTION.
8.1 Records. Each Party shall maintain complete and accurate records of
(i) all Royalty-Bearing Products commercialized by or through such Party under
this Agreement, (ii) all Net Sales and Sublicense Revenues received by such
Party in connection with each such Royalty-Bearing Product and (iii) any amounts
payable to such Party in relation to each such Royalty-Bearing Product, which
records shall contain sufficient information to permit each Party to confirm the
accuracy of any payments distributed in accordance with Section 7.1 of this
Agreement. Each Party shall retain such records for at least [ ] years
after the termination of this Agreement.
8.2 Inspection. Each Party shall permit the other Party, at such other
Party's expense, to examine its books of account and records which relate to
this Agreement to the extent necessary to ensure such Party's compliance with
the terms of this Agreement; provided, however, that neither Party shall be
obligated pursuant to this Section 8.2 to provide access to any information
which it reasonably considers to be a trade secret or similar confidential
information except under appropriate confidentiality agreements. The Parties
shall reconcile any underpayment or overpayment within [ ] days
after the accountant delivers the results of the audit. In the event that any
inspection performed under this Section reveals an underpayment in excess of
[ ] in any Royalty Period, the Party obligated to make the payment
shall bear the full cost of such audit.
9. PROPRIETARY MATERIALS.
9.1 Ownership of Proprietary Materials. In the course of the Research
Program, one Party (the "Provider") may transfer to the other Party (the
"Recipient") certain of its Proprietary Materials. The Recipient acknowledges
and agrees that such Proprietary Materials are and shall be owned by the
Provider. The Recipient agrees to execute and deliver any
12.
documents of assignment or conveyance to effectuate the ownership rights of the
Provider in such Proprietary Materials.
9.2 Use of Proprietary Materials. The Recipient agrees to use
Proprietary Materials provided by the Provider solely for purposes set forth in
this Agreement. The Recipient shall use such Proprietary Materials only in
compliance with all applicable Federal, state, and local laws and regulations.
9.3 Transfer of Proprietary Materials. The Recipient shall not
distribute any Proprietary Materials to any third party other than its employees
who are working on the Research Program.
9.4 Disposition of Unused Proprietary Materials. Upon completion of the
Research Program, or sooner at the request of the Provider, the Recipient shall
either destroy or return to the Provider any unused Proprietary Materials.
10. CONFIDENTIAL INFORMATION.
10.1 Confidential Information.
(a) Restrictions on Confidential Information. With respect to
all Confidential Information furnished by one Party (the "Disclosing Party") to
the other (the "Receiving Party") during the term of this Agreement, the
Receiving Party shall:
(i) maintain such Confidential Information in
strict confidence;
(ii) not disclose or permit the disclosure of
such Confidential Information to any persons
other than to its directors, officers,
consultants and employees who need to know
such Confidential Information in order to
conduct the Research Program and who are
obligated to maintain the confidential
nature of such Confidential Information;
(iii) use such Confidential Information only for
the purposes set forth in this Agreement
herein and not for its own benefit or for
the benefit of any other person or business
entity; and
(iv) allow its directors, officers, employees,
agents, and other representatives to
reproduce the Confidential Information only
to the extent necessary to effect the
purposes set forth in this Agreement, with
all such reproductions being considered
Confidential Information.
13.
(b) Exceptions to Restrictions. The obligations of the
Receiving Party under Subsection (a) above shall not apply to the extent that
the Receiving Party can demonstrate that certain Confidential Information:
(i) was in the public domain prior to the time
of its disclosure;
(ii) entered the public domain after the time of
its disclosure through means other than an
unauthorized disclosure resulting from an
act or omission by the Receiving Party;
(iii) was independently developed or discovered by
the Receiving Party at any time prior to the
time of its disclosure under this Agreement,
as shown by prior documentary evidence;
(iv) is or was disclosed to the Receiving Party
at any time, whether prior to or after the
time of its disclosure under this Agreement,
by a third Party having no fiduciary
relationship with the Disclosing Party and
having no obligation of confidentiality with
respect to such Confidential Information; or
(v) is required to be disclosed to comply with
applicable laws or regulations or with a
court or administrative order, provided that
the Disclosing Party receives prior written
notice of such disclosure and that the
Receiving Party takes all reasonable and
lawful actions to obtain confidential
treatment for such disclosure and, if
possible, to minimize the extent of such
disclosure.
(c) Ownership of Confidential Information. The Receiving Party
agrees that the Disclosing Party (or any third party entrusting its own
Confidential Information to the Disclosing Party) is and shall remain the
exclusive owner of the Confidential Information disclosed by the Disclosing
Party and all patent, copyright, trademark, trade secret, and other intellectual
property rights in such Confidential Information or arising therefrom. No
option, license, or conveyance of such rights to the Receiving Party is granted
except as expressly set forth in this Agreement.
(d) Return of Confidential Information. Upon the termination
of this Agreement, or at any time upon the written request of the Disclosing
Party, the Receiving Party shall return to the Disclosing Party all originals,
copies, and summaries of documents, materials, and other tangible manifestations
of Confidential Information in the possession or control of the Receiving Party,
except that the Receiving Party may retain one copy of the Confidential
Information in the possession of its legal counsel (for ArQule) and its Legal
and Trademarks Department (for Sugen) solely for the purpose of monitoring its
obligations under this Agreement.
14.
CONFIDENTIAL TREATMENT REQUESTED
11. TERM AND TERMINATION.
11.1 Term. This Agreement shall commence on the Effective Date and
shall continue for a period of one (1) year unless earlier terminated pursuant
to this Section 11; provided, however, that upon the mutual agreement of the
Parties, the term of this Agreement may be extended for additional one (1) year
periods.
11.2 Termination for Breach. This Agreement may be terminated by either
Party by reason of a material breach that the breaching Party fails to remedy
within [ ] days after written notice thereof by the non-breaching Party.
11.3 Force Majeure. Neither Party will be responsible for delays
resulting from acts beyond the control of such Party, provided that the
nonperforming Party uses commercially reasonable efforts to avoid or remove such
causes of nonperformance and continues performance hereunder with reasonable
dispatch whenever such causes are removed.
11.4 Effect of Termination. Notwithstanding the termination or
expiration of this Agreement, this Agreement shall remain in effect: (a) for any
Active Sugen Compound for the period of time as is necessary to allow Sugen to
determine if such Active Sugen Compound is a Licensed Compound and (b) for any
such Licensed Compound or for any other Licensed Compound for the period of time
as is necessary to complete Preclinical Development and commercialization of
such Licensed Compound. Upon the termination of this Agreement, ArQule agrees
that it shall not initiate any programs for any other party involving the
production of Directed Arrays based upon any Sugen Compound, Sugen Derivative
Compound, Active Sugen Compound or Active Homolog thereto. ArQule agrees that
any breach of this clause may be remedied by an injunction against any such
program, among other remedies.
11.5 Survival of Provisions. The following provisions shall survive
termination or expiration of this Agreement: Sections 3, 5, 6, 7, 8, 9, 10, 11.4
and 12.
12. MISCELLANEOUS.
12.1 Publicity. No press release, advertising, promotional sales
literature, or other promotional oral or written statements to the public in
connection with or alluding to work performed under this Agreement or the
relationship between the Parties created by it, having or containing any
reference to ArQule or Sugen, shall be made by either Party without the prior
written approval of the other Party.
12.2 Relationship of Parties. For the purposes of this Agreement, each
Party is an independent contractor and not an agent or employee of the other
Party. Neither Party shall have authority to make any statements,
representations or commitments of any kind, or to take any action which shall be
binding on the other Party, except as may be explicitly provided for herein or
authorized in writing.
15.
12.3 Dispute Resolution. Any disputes arising between the Parties
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either Party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
promptly presented to the Chief Executive Officers of each of ArQule and Sugen
for resolution and if the Chief Executive Officers or their designees cannot
promptly resolve such disputes, then such dispute shall be finally resolved by
binding arbitration. Whenever a Party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other Party. The
Party giving such notice shall refrain from instituting the arbitration
proceedings for a period of sixty (60) days following such notice. Any
arbitration hereunder shall be conducted under the commercial rules of the
American Arbitration Association. Each such arbitration shall be conducted by a
panel of three arbitrators appointed in accordance with such rules; provided,
however, that both Parties hereto shall be entitled to representation by
counsel, to appear and present written and oral evidence and argument and to
cross-examine witnesses presented by the other Party. The arbitral panel (i)
shall have the authority to grant specific performance, (ii) may allocate
between the Parties the costs of arbitration in such equitable manner as they
may determine, but (iii) shall not render an arbitral award contrary to the
provisions of this Agreement. The arbitral award shall be in writing and the
arbitral panel shall provide written reasons for its award. The award of the
arbitral panel shall be final and binding upon the Parties hereto. Any such
arbitration shall be held in Boston, Massachusetts, or any other mutually agreed
location. Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.
12.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
12.5 Headings. All headings in this Agreement are for convenience only
and shall not affect the meaning of any provision hereof.
12.6 Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the Parties and their respective lawful successors and assigns.
12.7 Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, except that either of the
Parties may assign this Agreement to a successor in connection with the merger,
consolidation, or sale of all or substantially all of its assets or that portion
of its business pertaining to the subject matter of this Agreement.
12.8 Notices. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized national overnight courier, confirmed facsimile
transmission, or registered or certified mail, return receipt requested, postage
prepaid, to the following addresses or facsimile numbers:
16.
If to ArQule:
ArQule, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Dodge
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Sugen:
Sugen, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxx-Freke
Tel: (000) 000-0000
Fax: (000) 000-0000
Either Party may change its designated address and facsimile number by notice to
the other Party in the manner provided in this Section 12.8.
12.9 Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified at any time, but only by means of a written instrument
signed by both Parties. Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether or
not similar.
12.10 Governing Law. This Agreement and the legal relations among the
Parties shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts irrespective of any conflict of laws principles.
12.11 Severability. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and this Agreement shall be construed as if such invalid or unenforceable
provision had not been included herein.
17.
12.12 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous oral and prior written agreements and
understandings.
12.13 Indemnification. To the maximum extent permitted by law each
Party shall indemnify and hold harmless the other Party from and against all
claims, expenses or liability of whatever nature arising from any default, act,
omission or negligence of the Indemnifying Party, or the Indemnifying Party's
agents or employees or others exercising rights by, through or under the
Indemnifying Party, or the failure of the Indemnifying Party or such persons to
comply with any applicable laws, rules, regulations, codes, ordinances or
directives of governmental authorities, in each case to the extent the same are
related, directly or indirectly, to this Agreement and/or the Research Program
described herein; provided, however, that in no event shall the Indemnifying
Party be obligated under this section to indemnify the Indemnified Party where
such claim, expense or liability results solely from any omission, fault,
negligence or other misconduct of the Indemnified Party.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as a sealed instrument effective as of the date first above
written.
ARQULE, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
SUGEN, INC.
By: /s/ Xxxxxxx Xxxxx-Freke
------------------------------------------
Name: Xxxxxxx Xxxxx-Freke
Title: Chairman and Chief Executive Officer
18.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
RESEARCH PLAN
ARQULE/SUGEN PROJECT PLAN
[
]
CONFIDENTIAL TREATMENT REQUESTED
Arqule/SUGEN Project Plan
--------------------------------------------------------------------------------
[
]
2.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B
DESCRIPTION OF FIELD
The Field shall mean, with respect to any Target, the field of [
] Such Field includes
[
]
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
LICENSED COMPOUND CRITERIA
Compounds will evaluated as Licensed Compound candidates based good scientific
and business criteria, including one or more of the following:
o Compound potency as measured by [
]
o Compound selectivity as calculated by [
]
o Assessment of effects on [
]
o Assessment of effects on [ ]
o Assessment of [ ]
o Assessment of effects on [ ]
o Assessment of effects on [ ] in appropriate species
o Assessment of [ ]
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
SUGEN COMPOUNDS
[
]
1.
CONFIDENTIAL TREATMENT REQUESTED
[
]
2.
CONFIDENTIAL TREATMENT REQUESTED
[
]
3.
CONFIDENTIAL TREATMENT REQUESTED
[
]
4.
CONFIDENTIAL TREATMENT REQUESTED
[
]
5.
CONFIDENTIAL TREATMENT REQUESTED
[
]
6.
CONFIDENTIAL TREATMENT REQUESTED
[
]
7.
CONFIDENTIAL TREATMENT REQUESTED
[
]
8.
CONFIDENTIAL TREATMENT REQUESTED
[
]
9.
CONFIDENTIAL TREATMENT REQUESTED
[
]
10.
CONFIDENTIAL TREATMENT REQUESTED
[
]
11.
CONFIDENTIAL TREATMENT REQUESTED
[
]
12.
CONFIDENTIAL TREATMENT REQUESTED
[
]
13.
CONFIDENTIAL TREATMENT REQUESTED
[
]
14.
