1
EXHIBIT 10.1
TECHNOLOGY ACQUISITION AGREEMENT
This TECHNOLOGY ACQUISITION AGREEMENT is entered into as of July 19, 1999 by and
between PFIZER INC, a Delaware corporation, having an office at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and its Affiliates ("Pfizer"), and ARQULE, INC,
a Delaware corporation, having an office at 000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000
and its Affiliates ("ArQule").
WHEREAS, Pfizer has expertise in medicinal chemistry and its use in the
discovery, research, and development of pharmaceutical products; and
WHEREAS, ArQule has certain technology, know-how and expertise relating to the
automated synthesis of compounds and has ownership of the patent applications
and the patents set forth in Exhibit A, attached to and made part of this
Agreement; and
WHEREAS, Pfizer seeks to license ArQule's automated compound synthesis
technology and to access ArQule's expertise and know-how in the automated
synthesis of compounds for production of compound libraries; and
WHEREAS, Pfizer and ArQule wish to enter into this Agreement for transfer of
automated compound synthesis technology to Pfizer and to produce compound
libraries for Pfizer;
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the terms defined in this Section 1 shall have
the meanings specified.
2
1.1 "AFFILIATE" means any corporation or other legal entity owning,
directly or indirectly, fifty percent (50%) or more of the voting capital shares
or similar voting securities of Pfizer or ArQule; any corporation or other legal
entity fifty percent (50%) or more of the voting capital shares or similar
voting rights of which is owned, directly or indirectly, by Pfizer or ArQule or
any corporation or other legal entity fifty percent (5 0%) or more of the voting
capital shares or similar voting rights of which is owned, directly or
indirectly, by a corporation or other legal entity which owns, directly or
indirectly, fifty percent (50%) or more of the voting capital shares or similar
voting securities of Pfizer or ArQule.
1.2 "AMAP(TM) PARALLEL SYNTHESIS SYSTEM" or "System" means ArQule's
combinatorial chemistry synthesis platform comprising [*], as more fully
described in Exhibit B (AMAP Description) and Exhibit C (System Equipment),
attached to and made part of this Agreement. The term "AMAP" is a trademark of
ArQule.
1.3 "ARQULE COMPOUNDS" means [*].
1.4 "ARQULE CONFIDENTIAL INFORMATION" means all information about any
element of the ArQule Technology which is disclosed by ArQule to Pfizer and
designated "Confidential' in writing by ArQule at the time of disclosure or
within thirty (30) days following disclosure to the extent that such information
(i) as of the date of disclosure to Pfizer is not known to Pfizer other than by
virtue of a prior confidential disclosure to Pfizer by ArQule; or (ii) is not
disclosed in published literature, or otherwise generally known to the public
through no fault or omission of Pfizer; or (iii) is not obtained by Pfizer from
a third party free from any obligation of confidentiality to ArQule.
------------------
*Confidential treatment has been requested for the marked portion.
-2-
3
1.5 "ARQULE STAFF" means the full time equivalent ("FTE") ArQule employees
in the Production Facility who shall perform the Collaboration Program.
1.6 "ARQULE TECHNOLOGY" means Technology, including, but not limited to
Technology described and made a part of this Agreement in Exhibit A, comprising
the System and Improvements thereto, which Technology is developed by employees
of or consultants to ArQule alone or jointly with third parties prior to the
Effective Date and during the Contract Period, but excluding technology that
ArQule does not have the right to license, sublicense, or practice as set forth
in this Agreement without the consent of or payment to a third party. ArQule
Technology also includes all Improvements to the System that are developed under
the Plans by Pfizer employees alone or jointly with ArQule Staff during the
Contract Period; provided, however, that Pfizer Confidential Information has
been removed. ArQule Technology does not include Pfizer Compounds.
1.7 "AUTOMATED TRANSFORMATION" means [*].
1.8 "CHEMICAL TRANSFORMATION" means [*].
1.9 "COLLABORATION PLAN" means the written plan describing and governing
the activities to be carried out by Pfizer and ArQule pursuant to this
Agreement. The initial Collaboration Plan is attached to and made a part of this
Agreement as Exhibit D.
1.10 "COLLABORATION PROGRAM" is the ArQule Technology transfer program and
the Pfizer Compound synthesis program conducted by ArQule and Pfizer pursuant to
the Plans.
1.11 "CONTRACT PERIOD" means the period beginning on the Effective Date and
ending on the date on which this Agreement terminates.
1.12 "EFFECTIVE DATE" means July 19, 1999.
------------------
*Confidential treatment has been requested for the marked portion.
-3-
4
1.13 "IMPROVEMENT" means any improvement, augmentation, or enhancement to
the System that is developed by a party during the Contract Period.
1.14 "LEGAL BOOKS" mean the formal laboratory notebooks issued to ArQule
Staff and owned by Pfizer in which all work performed by ArQule Staff in the
Production Facility will be recorded. Legal Books will not be removed from the
Production Facility. Pfizer may review Legal Books at any time.
1.15 "LIBRARY PROTOCOLS" means [*].
1.16 "MOVE-IN DATE" means such date after the Effective Date and on or
before [*] ArQule shall certify the Production Facility as ready for occupancy
and operations by Pfizer employees and ArQule Staff.
1.17 "PATENT RIGHTS" shall mean all patent rights in and to inventions
within Pfizer Technology and ArQule Technology including patents and patent
applications, whether domestic or foreign, claiming such patentable inventions,
including all continuations, continuations-in-part, divisions, and renewals, and
letters patent granted thereon, and all reissues, re-examinations and
extensions.
1.18 "PFIZER COMPOUNDS" means [*].
1.19 "PFIZER CONFIDENTIAL INFORMATION" means all information about any
element of Pfizer Technology which is disclosed by Pfizer to ArQule and
designated "Confidential" in writing by Pfizer at the time of disclosure or
within thirty (30) days following disclosure to the extent that such information
(i) as of the date of disclosure to ArQule is not known to ArQule other than by
virtue of a prior confidential disclosure to ArQule by Pfizer; or (ii) is not
disclosed in published literature, or otherwise generally known to the public
through no fault or omission
------------------
*Confidential treatment has been requested for the marked portion.
-4-
5
of ArQule; or (iii) is not obtained by ArQule from a third party free from any
obligation of confidentiality to Pfizer.
1.20 "PFIZER STAFF" means Pfizer FTE employees in the Production Facility
who shall perform the Collaboration Program.
1.21 "PFIZER TECHNOLOGY" means Technology developed by employees of or
consultants to Pfizer alone or jointly with third parties prior to the Effective
Date and during the Contract Period and shall include, without limitation,
Pfizer Compounds.
1.22 "PLANS" are the Collaboration Plan and the Production Plan.
1.23 [*].
1.24 "PRODUCTION FACILITY" means the space that Pfizer has leased from
ArQule under the terms and conditions of the Sublease Agreement, attached to and
made part of this Agreement as Exhibit E.
1.25 "PRODUCTION GOALS" mean [*].
1.26 "PRODUCTION PLAN" means the plan, first adopted by both parties during
the initial [*] months of the Contract Period and thereafter, amended every
calendar quarter ("Quarter") in advance. The Production Goals for each Quarter
will be described in the Production Plan. Each Production Plan will be attached
to and made part of this Agreement as Exhibit F.
1.27 "SUPPLEMENTARY STAFF" means the supplementary, full time Pfizer
employees who occupy the Production Facility but perform operations outside the
Collaboration Program, as further described in Section 2.5.4. (iv).
1.28 "TECHNOLOGY" means all information and materials, including, but not
limited to chemical reagents, monomers, compounds, protocols, chemistry,
hardware and software
------------------
*Confidential treatment has been requested for the marked portion.
-5-
6
technology, Automated Transformations, Chemical Transformations, technical
information, know-how, expertise and trade secrets as further described in the
Plans.
2. COLLABORATION PROGRAM
2.1 PURPOSE. ArQule and Pfizer shall conduct the Collaboration Program
throughout the Contract Period. The objectives of the Collaboration Program are
to transfer ArQule Technology to Pfizer and to produce Pfizer Compounds.
2.2 Collaboration Plan. The initial Collaboration Plan is described in
Exhibit D. The Steering Committee shall prepare an amended Collaboration Plan no
later than [*] and every [*] thereafter, during the Contract Period. Such
amended Collaboration Plans shall be appended to Exhibit D and made part of this
Agreement.
2.3 STEERING COMMITTEE
2.3.1 PURPOSE. Each party shall establish a committee to manage the
activities of both parties during the course of the Collaboration Program (the
"Steering Committee'):
(a) to review and evaluate progress under the Collaboration
Plan;
(b) to prepare the Plans and any amendments;
(c) to review and monitor progress under the Production Plan and
to report to Pfizer the completion of Production Goals:
(d) to coordinate and monitor activities and staffing of the
Production Facility as further described in Exhibit D;
(e) to coordinate and monitor [*];
(f) to coordinate and monitor [*];
------------------
*Confidential treatment has been requested for the marked portion.
-6-
7
(g) to monitor, review and approve [*] for the Production
Facility. (Approval of such [*] by either party shall not be unreasonably
withheld);
(h) to establish, implement and manage a series of operational
guidelines, including, but not limited to, FTE use reporting practices and
invoicing procedures;
(i) [*];
(j) to identify, to review and to coordinate licensing of third
party Chemical Transformations for use in the Production Facility;
(k) to establish and implement procedures to control both
physical and other security measures relating to the collaboration and the
Production Facility, including procedures controlling access to the Production
Facility (see Section 2.5.1 (vii) below); and
(l) to coordinate and monitor publication of Technology
developed during the Contract Period as specified in Section 4.2 and to
coordinate and monitor the exchange of information and materials that relate to
the Collaboration Program. (This function shall survive termination of this
Agreement.) The Steering Committee may have other duties as mutually agreed by
the parties or as expressly set forth in this Agreement.
2.3.2 MEMBERSHIP. Pfizer and ArQule each shall appoint four (4)
members to the Steering Committee. Subject to the terms and conditions of
Section 2.10, either party may appoint substitutes at any time upon written
notice to the other party.
The members initially shall be:
Pfizer Appointees: [*]
ArQule Appointees: [*]
------------------
*Confidential treatment has been requested for the marked portion.
-7-
8
2.3.3 CHAIR. Two co-chairpersons shall chair the Steering Committee,
one appointed by Pfizer and the other appointed by ArQule.
2.3.4 MEETINGS. The Steering Committee shall meet at least quarterly,
at places and on dates selected by each party in turn. Representatives of either
party, in addition to members of the Steering Committee, may attend such
meetings at the invitation of both parties.
2.3.5 MINUTES. The Steering Committee shall keep accurate minutes of
its deliberations, which record all proposed decisions and all actions
recommended or taken. Specifically, the minutes shall provide a record of
operational details relating to, among other things, training on the System and
the transfer of Improvements to the ArQule Technology (e.g., which Improvements
and the timing for their delivery and implementation). Drafts of the minutes
shall be delivered to all Steering Committee members within ten (10) business
days after each meeting. The party hosting the meeting shall be responsible for
the preparation and circulation of the draft minutes. Draft minutes shall be
edited by the co-chairpersons and shall be issued in final form only with their
approval and agreement.
2.3.6 DECISIONS. All decisions of the Steering Committee shall be made
[*]. ArQules' representatives on the Steering Committee shall [*] vote and
Pfizer's representatives on the Steering Committee shall [*] vote.
2.3.7 EXPENSES. Pfizer and ArQule shall each bear all expenses of
their respective members related to their participation on the Steering
Committee.
2.4 REPORTS
2.4.1 REPORTS. During the Contract Period, Pfizer and ArQule each
shall furnish to the Steering Committee:
------------------
*Confidential treatment has been requested for the marked portion.
-8-
9
(a) summary written reports within [*] days after the end of
each Quarter commencing on the Effective Date[*].
(b) comprehensive written reports within [*] days after the end
of each calendar year, describing in detail the work accomplished by it under
the Plans during the year and discussing and evaluating the results of such work
as further described in Section 2.4.1(a).
2.5 PRODUCTION FACILITY. During the Contract Period, the Collaboration
Program shall be performed in the Production Facility. The System and
Improvements shall be assembled, constructed and maintained in the Production
Facility as more fully described and provided below. ArQule covenants that the
Production Facility shall be made suitable in all respects for the performance
of its duties pursuant to this Agreement and shall be maintained in such
condition during the term of this Agreement.
2.5.1 ArQule shall be responsible for the following operations in the
Production Facility: [*].
2.5.2 Pfizer may inspect environmental health and safety procedures in
the Production Facility and may make recommendations with respect to
improvements to ensure compliance with local, state and federal regulations. At
ArQules' own expense, ArQule will make all such improvements to the Production
Facility as may be required to comply with any government regulations as
identified by Pfizer or the responsible government agency. If Pfizer seeks to
improve the standards of environmental health and safety beyond those required
by law, Pfizer may do so at Pfizer's own expense.
2.5.3 Pfizer may inspect security procedures in the Production
Facility and may seek to improve such procedures at Pfizer's own expense.
------------------
*Confidential treatment has been requested for the marked portion.
-9-
10
2.5.4 ArQule Staff, Pfizer Staff and Supplementary Staff will
co-occupy the Production Facility.
(i) The skills of ArQule Staff with respect to disciplines,
roles. level of education and ArQule employment experience will be as described
in the Collaboration Plan.
(ii) [*] will be responsible for management of ArQule Staff
and [*] or his appointee will be responsible for management of Pfizer Staff and
Supplementary Staff. The day to day operations of the Production Facility shall
be the responsibility of [*] or his successor pursuant to Section 2.10.
(iii) Subject to the terms and conditions of Section 2.5.4
(iv), commencing on [*], with [*] months written notice, Pfizer may substitute
ArQule Staff with Pfizer Staff for the performance of Plans; provided, however,
at least [*] ArQule Staff remain in the facility. Pfizer will replace ArQule
Staff with an equivalent number of Pfizer Staff, so that the total number of
FTEs dedicated to Pfizer Compound production is [*]. Commencing [*], until the
termination of this Agreement. Pfizer Staff may be increased to a maximum of [*]
FTEs so that there may be as many as [*] FTEs performing the Production Plan.
(iv) In addition to Pfizer Staff specified in Section 2.5.4
(iii), [*] Supplementary Staff may also occupy the facility to perform
operations which include, but are not limited to: [*].
(v) For each Pfizer Staff or Supplementary Staff member
occupying the Production Facility, Pfizer will compensate ArQule at the rates
provided in Section 3.6, applied to such staff members pro rata on the basis of
the time they actually occupy
------------------
*Confidential treatment has been requested for the marked portion.
-10-
11
the Production Facility. The Steering Committee shall establish methods to
record such occupancy times.
2.6 PRODUCTION PLAN AND GOALS. Subject to the Production Plans, if ArQule
achieves all Production Goals during the Contract Period, they will produce a
total of [*] Pfizer Compounds, each of which satisfies the following general
specifications:
[*]
Compounds produced during the Contract Period that fail to satisfy such
specifications will not count toward ArQule's Production Goal of [*] and ArQule
will destroy any such compounds, unless Pfizer notifies ArQule to the contrary
in writing, within [*] days of the end of the quarter in which such compounds
were a part of the Production Plan.
2.6.1 During the Contract Period, Key Investigators will be solely
responsible for the process of [*]. ArQule shall be responsible for ensuring
that ArQule does not [*]. Such procedures shall be described in detail in the
Collaboration Plan as the same is updated from time to time.
2.7 ARQULE TECHNOLOGY TRANSFER. Upon execution of this Agreement by both
parties, ArQule will [*], as further described in the Collaboration Plan and the
Steering Committee minutes. The Steering Committee will govern these [*]
activities. [*] will continue throughout the Contract Period; provided, however,
that Pfizer acknowledges that [*] will be limited until Pfizer has full access
to [*]. As further described in the Collaboration Plans and in minutes of the
Steering Committee, during the Contract Period ArQule will document and transfer
to Pfizer any Improvements to ArQule Technology.
------------------
*Confidential treatment has been requested for the marked portion.
-11-
12
2.8 [*]. Within [*] days of the Effective Date, ArQule shall transfer to
Pfizer [*]. From time to time, during the Contract Period, ArQule will provide
Pfizer with all additional [*].
2.9 DILIGENT EFFORTS. Pfizer and ArQule each shall use reasonably diligent
efforts to achieve the objectives of the Collaboration Program. ArQule will use
reasonably diligent efforts to achieve the Plans and Pfizer will use reasonably
diligent efforts to assist ArQule in the Plans in pursuit of those objectives.
2.10 KEY INVESTIGATORS. (a) Subject to the provisions of Section 2.10 (b),
during the Contract Period, [*] ("Key Investigators") shall serve on the
Steering Committee. During such period, [*] shall commit approximately [*] of
his time each week to the Collaboration Program and [*] shall commit
approximately [*] of his time each week, (b) Promptly after execution of this
Agreement, ArQule shall [*]. Following approval by Pfizer, ArQule shall [*] and
during the Contract Period shall [*]. If for any reason, either [*], ArQule
shall within [*] days [*].
3. PAYMENTS AND RESPONSIBILITIES.
3.1 SYSTEM. In return for [*], Pfizer shall pay ArQule an amount (the "[*]
Cost") between [*] (the "Minimum [*] Cost") and [*] (the "Maximum [*] Cost")
depending upon [*]. ArQule shall deliver [*] no later than [*] months from the
Effective Date, at which time Pfizer shall acquire legal title and shall bear
the risk of loss. The Minimum [*] Cost shall be paid as follows: [*] shall be
payable within [*] days of execution of this Agreement and the remaining [*]
shall be payable over [*] years beginning on [*], in advance quarterly
installments, each of [*] during [*] years, and each of [*] during [*] years. In
addition to the Minimum [*] Cost, Pfizer will pay ArQule an additional amount of
up to [*] payable over [*] years beginning on the [*], in quarterly
installments, each of up to[*] during [*] years, and each of up to [*] during
[*] years, in
------------------
*Confidential treatment has been requested for the marked portion.
-12-
13
each case if, as, and when the [*] achieves [*], as determined by the Steering
Committee. Such additional amount (the "[*] Amount") shall be determined at the
end of each Quarter during the [*] year period beginning [*]. At the end of each
quarter, if [*]. Pfizer will pay ArQule the Quarterly installments of [*] Costs
within thirty (30) days of receipt of invoice and certification.
3.2 [*] COST FOR [*]. Pfizer shall reimburse ArQule for direct costs
incurred by ArQule to [*] that are needed to [*] any [*] to the ArQule
Technology; provided, however, that each such [*] and ArQule's estimated costs
are approved in advance by the Steering Committee in accordance with the
procedures set forth in the Collaboration Plan. Pfizer will pay ArQule within
thirty (30) days of receipt of an itemized invoice for each such [*]. At
Pfizer's option, Pfizer may purchase part or all of any such [*] directly from
the vendor (for example, [*]) and may pay the vendor directly.
3.3 SUBLEASE FOR PRODUCTION FACILITY. Commencing on the Move-In Date,
during the Contract Period, Pfizer will pay ArQule [*] annually for the sublease
to the Production Facility, which will be paid quarterly, in advance, upon
invoice from ArQule. As further described in the Sublease Agreement, Pfizer will
also pay ArQule for [*]. If ArQule fails or refuses to execute this Agreement,
Pfizer shall have no obligation to execute the Sublease Agreement.
3.4 [*] COSTS. From the Move-In Date and thereafter during the Contract
Period, Pfizer shall pay ArQule for [*] produced in the [*], an amount not to
exceed [*] in quarterly installments, each of [*] payable against ArQule's
invoice submitted in advance of such quarter. Pfizer shall supply the [*] with
any [*] necessary for performance of the [*] and not available by purchase from
an outside vendor.
------------------
*Confidential treatment has been requested for the marked portion.
-13-
14
3.5 [*] FEES. As set forth in the Collaboration Plan, ArQule will dedicate
[*] ArQule Staff FTEs per year (a) [*] and (b) [*]. After the Effective Date,
Pfizer will pay ArQule a fee of [*] in support of [*], against invoice.
Thereafter, commencing on Move-In Date, and until the termination of this
Agreement, Pfizer will pay to ArQule an annual fee of [*] in support of [*].
Such fee will be paid to ArQule in equal quarterly installments, in advance,
thirty (30) days after receipt of invoice.
3.6 [*] FEES. Pursuant to Section 2.5.4 (v), for each [*] person who
replaces [*] person in the Production Facility, Pfizer will pay ArQule [*] for
each year or part thereof during the Contract Period that each such [*] person
is employed in the Production Facility; and, for each [*] person in the
Production Facility, Pfizer will pay ArQule [*] for each year or part thereof
during the Contract Period that each such [*] person is employed in the
Production Facility. The Steering Committee will determine the methods for
tracking and pro-rating the time spent by Pfizer employees in the Production
Facility.
3.7 REBATES. If Pfizer substitutes Pfizer Staff for ArQule Staff as
permitted by Section 2.5.4. (iii), then during the period of such substitution
the quarterly amount due ArQule as set forth in Section 3.4 shall be reduced by
the Steering Committee as further described in the Collaboration Plan.
3.8 RECORDS. ArQule shall keep for three (3) years from the conclusion of
each year complete and accurate records of its expenditures pursuant to the
Plans. The records shall conform to good accounting principles as applied to a
similar company similarly situated. Pfizer shall have the right at its own
expense during the term of this Agreement and during the subsequent three year
period to appoint an independent certified public accountant,-reasonably
------------------
*Confidential treatment has been requested for the marked portion.
-14-
15
acceptable to ArQule, to verify the accuracy of such expenditures. Upon
reasonable notice by Pfizer, ArQule shall make its records available for
inspection by the auditing company or the independent certified public
accountant during regular business hours at the place or places where such
records are customarily kept. This right of inspection shall not be exercised
more than once in any calendar year and not more than once with respect to
records covering any specific period of time. All information concerning such
expenditures, and all information learned in the course of any audit or
inspection, shall be deemed to be ArQule Confidential Information, except to the
extent that it is necessary for Pfizer to reveal the information in order to
enforce any rights it may have pursuant to this Agreement or if disclosure is
required by law. The failure of Pfizer to request verification of any
expenditures before or during the three year period shall be considered
acceptance by Pfizer of the accuracy of such expenditures, and ArQule shall have
no obligation to maintain any records pertaining to such report or statement
beyond such three year period. The results of such inspection, if any, shall be
binding on the parties.
4. TREATMENT OF CONFIDENTIAL INFORMATION
4.1 CONFIDENTIALITY
4.1.1 Pfizer and ArQule each recognize that the other's Confidential
Information constitutes highly valuable, confidential information. Subject to
the terms and conditions of this Agreement, the obligations set forth in Section
4.3, the publication rights set forth in Section 4.2. Pfizer and ArQule each
agree that during the term of this Agreement and for ten (10) years thereafter,
it will keep confidential, and will cause its Affiliates to keep confidential,
all ArQule Confidential Information or Pfizer Confidential Information, as the
case may be, that is disclosed to it, or to any of its Affiliates pursuant to
this Agreement. Neither Pfizer nor
------------------
*Confidential treatment has been requested for the marked portion.
-15-
16
ArQule nor any of their respective Affiliates shall use such Confidential
Information except as expressly permitted in this Agreement.
4.1.2 Pfizer and ArQule each agree that any disclosure of the other's
Confidential Information to any officer, employee or agent of the other party or
of any of its Affiliates shall be made only if and to the extent necessary to
carry out its responsibilities under this Agreement and shall be limited to the
maximum extent possible consistent with such responsibilities. Pfizer and ArQule
each agree not to disclose the other's Confidential Information to any third
parties under any circumstance without written permission from the other party.
Each party shall take such action, and shall cause its Affiliates to take such
action, to preserve the confidentiality of each other's Confidential Information
as it would take to preserve the confidentiality of its own Confidential
Information. Upon the termination of this Agreement by either party by its
breach, the breaching party, upon the other's request, will return all the
Confidential Information disclosed to the other party pursuant to this
Agreement, including all copies and extracts of documents, within sixty (60)
days of the request upon the termination of this Agreement except for one (1)
copy which may be kept for the purpose of complying with continuing obligations
under this Agreement.
4.1.3 ArQule and Pfizer each represent that all of its employees, and
any consultants to such party, participating in the Collaboration Program who
shall have access to Pfizer Technology, ArQule Technology and Pfizer
Confidential Information and ArQule Confidential Information are bound by
agreement to maintain such information in confidence consistent with the terms
and conditions of this Agreement.
4.2 PUBLICATION. Notwithstanding any matter set forth with particularity
in this Agreement to the contrary, results obtained in the course of the
Collaboration Program may be
-16-
17
submitted for publication following scientific review by the Steering Committee
and subsequent approval by ArQule's and Pfizer's managements. After receipt of
the proposed publication by both Pfizer's and ArQule's managements written
approval or disapproval shall be provided within thirty (30) days for a
manuscript, within fourteen (14) days for an abstract for presentation at, or
inclusion in the proceedings of a scientific meeting, and within fourteen (14)
days for a transcript of an oral presentation to be given at a scientific
meeting.
4.3 PUBLICITY. Except as required by law, neither party may disclose the
terms of this Agreement, nor the Collaboration Program described in it, without
the written consent of the other party, which consent shall not be unreasonably
withheld. Either party shall have the right to issue a press release or other
public statement concerning this Agreement provided that the content of such
release or statement has first been agreed by the other party, such agreement
not to be unreasonably withheld or delayed.
4.4 DISCLOSURE OF INVENTIONS. ArQule shall inform Pfizer about all
Improvements to ArQule Technology and Pfizer shall inform ArQule about all
Improvements to ArQule Technology which Pfizer employees invent and use in the
Production Facility. The Steering Committee shall establish and implement
appropriate procedures to ensure that each party is given complete and timely
information about Improvements to ArQule Technology.
4.5 RESTRICTIONS ON TRANSFERRING MATERIALS. Subject to the grant of
license to Pfizer in Section 5.2, Pfizer and ArQule recognize that the synthetic
chemical materials, including, but not limited to, monomers, chemical
components, intermediates, and reagents which are part of ArQule Technology or
Pfizer Technology, represent valuable commercial assets. Therefore, throughout
the Contract Period and for [*] years thereafter, ArQule and Pfizer agree not to
------------------
*Confidential treatment has been requested for the marked portion.
-17-
18
transfer such materials received from the other party to any third party, unless
prior written consent for any such transfer is obtained from the other party.
For the purposes of this Section 4.5, ArQule employees outside of the Production
Facility shall be viewed as third parties with respect to Pfizer Technology
(i.e. materials within Pfizer Technology shall not be transferred to ArQule
outside the Production Facility).
5. INTELLECTUAL PROPERTY RIGHTS. The following provisions relate to rights in
the intellectual property developed by ArQule or Pfizer, or both, during the
course of carrying out the Collaboration Program.
5.1 OWNERSHIP. ArQule shall own all ArQule Confidential Information and
ArQule Technology and ArQule Patent Rights relating to them. Pfizer shall own
all Pfizer Confidential Information, Pfizer Technology and Pfizer Patent Rights
relating to them.
5.2 GRANTS OF LICENSES.
5.2.1 ArQule hereby grants to Pfizer a non-exclusive, worldwide, [*]
license, including the right to grant sublicenses to Affiliates, to make and use
[*] for [*]. Such license shall continue until termination of this Agreement,
whereupon its status shall be determined as provided in Sections 8 or 9, as the
case may be.
5.2.2 At all times Pfizer owns all intellectual property with respect
to all [*], and shall be free to use and dispose of any [*] in any manner it
sees fit without any compensation or other obligation to ArQule. ArQule
covenants that during the Contract Period and for a period of twenty (20) years
after [*], it shall not [*] any [*]. In furtherance of the foregoing covenant,
ArQule shall [*]. If ArQule consults such [*] determines that it has [*], it
shall promptly [*]. Pfizer shall have the right to monitor and review ArQule
activities with respect to [*] during normal business
------------------
*Confidential treatment has been requested for the marked portion.
-18-
19
hours and upon reasonable notification; provided, however; that Pfizer shall not
have access to ArQule confidential information or confidential information of
ArQule's collaborators (other than Pfizer) for this purpose. ArQule shall not
[*] for a period of twenty (20) years after [*], after which ArQule will [*].
5.2.3 At Pfizer's expense, but without further compensation to ArQule,
ArQule shall (a) prepare and complete any documents and take such actions as
Pfizer may require to file patent applications and to prosecute patents with
respect to Pfizer Compounds and Pfizer Technology in Pfizer's name or ArQule's
name or both; and (b) if Pfizer deems it necessary or desirable, to execute an
assignment of rights in favor of Pfizer with respect to such patent applications
and patents.
5.2.4 At ArQule's expense, but without further compensation to Pfizer,
Pfizer shall (a) prepare and complete any documents and take such actions as
ArQule may require to file patent applications and to prosecute patents with
respect to ArQule Technology in Pfizer's name or ArQule's name or both; and (b)
if ArQule deems it necessary or desirable, to execute an assignment of rights in
favor f ArQule with respect to such patent applications and patents.
5.3 [*]. ArQule will have the right to use and transfer to third parties
[*] developed under the Collaboration Program, which the Steering Committee
certifies, acting by an affirmative vote, that the [*] would not [*].
5.4 [*]. During the Contract Period, Pfizer shall not have the right to
modify any [*] without the prior written consent of ArQule. ArQule acknowledges
that from time to time Pfizer [*] staff will seek to [*] between [*]. ArQule
will provide [*] within thirty (30) days of Pfizer's written request for such
[*].
------------------
*Confidential treatment has been requested for the marked portion.
-19-
20
6. PROVISIONS CONCERNING THE FILING, PROSECUTION AND MAINTENANCE OF PATENTS.
ArQule and Pfizer shall each be responsible for the filing, prosecuting and
maintaining all ArQule Patent Rights and Pfizer Patent Rights, respectively.
7. OTHER AGREEMENTS. Concurrently with the execution of this Agreement, ArQule
and Pfizer shall enter into the Sublease Agreement. This Agreement, Exhibits A,
B, C, D, E and F, each appended to and made part of this Agreement, are the sole
agreements with respect to the subject matter and supersede all other agreements
and understandings between the parties with respect to same.
8. TERM, TERMINATION AND DISENGAGEMENT
8.1 TERM. Unless sooner terminated or extended, this Agreement shall
expire on December 31, 2003 at which time, provided that Pfizer has then paid
all amounts earned by ArQule under Section 3 of this Agreement, (a) Pfizer shall
[*] as set forth in Section 5 and (b) Pfizer shall [*].
8.2 EVENTS OF TERMINATION. The following events shall constitute events of
termination ("Events of Termination"):
(a) any material written representation or warranty by ArQule or
Pfizer, or any of its officers, made under or in connection with this Agreement
shall prove to have been incorrect in any material respect when made.
(b) ArQule or Pfizer shall fail in any material respect to
perform or observe any term, covenant or understanding contained in this
Agreement or in any of the other documents or instruments delivered pursuant to,
or concurrently with, this Agreement, and any such failure shall remain
unremedied for thirty (30) days after written notice to the failing party.
8.3 TERMINATION.
------------------
*Confidential treatment has been requested for the marked portion.
-20-
21
8.3.1 Upon the occurrence of any Event of Termination, the party not
responsible may, by notice to the other party, terminate this Agreement.
8.3.2 If Pfizer terminates this Agreement pursuant to Section 8.3.1
and Pfizer pays ArQule within sixty (60) days of termination the full amount of
the Minimum System Cost payable under Section 3.1 not previously paid, Pfizer's
research license to ArQule Technology, ArQule Confidential Information, and
ArQule Patent Rights granted under Section 5 shall become worldwide, perpetual,
irrevocable, and fully paid and Pfizer shall retain ownership of all equipment
and software comprising the System and delivered Improvements; otherwise, the
aforesaid research license to Pfizer shall thereupon terminate and Pfizer shall
return any components of the System and Improvements that incorporate or rely on
ArQule Technology. If ArQule terminates this Agreement pursuant to Section
8.3.1, then the aforesaid research license to Pfizer shall thereupon terminate.
Insofar as the components of the System and Improvements then in Pfizer's
possession do not incorporate or rely upon ArQule Technology, Confidential
Information or Patent Rights, Pfizer shall retain ownership of them and the
right to use them.
9. TERMINATION BY PFIZER.
9.1 Eighteen (18) months after the date of initiation of Pfizer Compound
Production and occupancy of the Production Facility by Pfizer, Pfizer may
terminate this Agreement, without cause, upon six (6) months' notice to ArQule,
effective at the conclusion of the six-month notice period. If Pfizer does not
provide ArQule notice at that time, Pfizer may only terminate the Agreement
pursuant to Section 8.3.
9.2 If Pfizer terminates this Agreement pursuant to this Section, (i)
Pfizer will pay ArQule a termination fee of [*] within thirty (30) days of
termination; (ii) the research license granted to Pfizer under Section 5 shall
thereupon terminate; (iii) the sublease shall terminate and Pfizer shall have no
further obligation thereunder (except for rent accrued and unpaid through the
------------------
*Confidential treatment has been requested for the marked portion.
-21-
22
effective date of termination; (iv) the equipment purchased by Pfizer including,
the System, components and Improvements shall be returned to ArQule; and (v)
Pfizer shall continue to [*], and ArQule shall act with respect to all such [*],
as provided in Section 5 of this Agreement.
9.3 Termination of this Agreement for any reason shall be without
prejudice to:
(a) the rights and obligations of the parties provided in those
Sections of the Agreement which by virtue of their term and condition extend
beyond any termination of this Agreement including Pfizer's rights in, and
ArQule's obligations respecting Pfizer Compounds set forth in Section 5;
(b) ArQule's right to receive all payments accrued under Section
3; or
(c) (c) any other remedies which either party may otherwise
have.
10. REPRESENTATIONS AND WARRANTIES. ArQule and Pfizer each represents and
warrants as follows:
10.1 It is a corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware, is qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the conduct of its business of the ownership of its properties requires such
qualification and has all requisite power and authority, corporate or otherwise,
to conduct its business as now being conducted, to own, lease and operate its
properties and to execute, deliver and perform this Agreement.
10.2 The execution, delivery and performance by it of this Agreement have
been duly authorized by all necessary corporate action and do not and will not
(a) require any consent or approval of its stockholders, (b) violate any
provision of any law, rule, regulations, order, writ, judgment, injunctions,
decree, determination award presently in effect having applicability to it
------------------
*Confidential treatment has been requested for the marked portion.
-22-
23
or any provision of its certificate of incorporation or by-laws or (c) result in
a breach of or constitute a default under any material agreement, mortgage,
lease, license, permit or other instrument or obligation to which it is a party
or by which it or its properties may be bound or affected.
10.3 This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws, from time to time in effect,
affecting creditor's rights generally.
10.4 It is not under any obligation to any person, or entity, contractual
or otherwise, that is conflicting or inconsistent in any respect with the terms
of this Agreement or that would impede the diligent and complete fulfillment of
its obligations.
10.5 It has good and marketable title to or valid leases or licenses for,
all of its properties, rights and assets necessary for the fulfillment of its
responsibilities under the Collaboration Program, subject to no claim of any
third party other than the relevant lessors or licensors.
11. COVENANTS OF ARQULE AND PFIZER OTHER THAN REPORTING REQUIREMENTS.
Throughout the Contract Period, ArQule and Pfizer each shall:
11.1 maintain and preserve its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in good standing in each jurisdiction in
which such qualification is from time to time necessary or desirable in view of
their business and operations or the ownership of their properties.
11.2 comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any government authority to
the extent necessary to conduct the
-23-
24
Research Program, except for those laws, rules, regulations, and orders it may
be contesting in good faith.
12. INDEMNIFICATION. Pfizer will indemnify ArQule and its agents and employees
("the Indemnitees") for damages, settlements, costs, legal fees and other
expenses incurred in connection with a claim against the Indemnitees based on an
action or omission of Pfizer, its agents or employees related to the rights or
obligations of Pfizer under this Agreement; provided, however, that the
foregoing shall not apply (i) if the claim is found to be based upon the
negligence, recklessness or willful misconduct of the Indemnitees or (ii) if
ArQule fails to give Pfizer prompt notice of any claim it receives and such
failure materially prejudices Pfizer with respect to any claim or action to
which Pfizer's obligation pursuant to this Section applies. Pfizer, in its sole
discretion, shall choose legal counsel, shall control the defense of such claim
or action and shall have the right to settle same on such terms and conditions
it deems advisable; provided, however, it shall obtain ArQule's prior consent to
such part of any settlement which requires payment or other action by ArQule or
is likely to have a material adverse effect on ArQule's business.
13. NOTICE. All notices shall be in writing mailed via certified mail, return
receipt requested, courier, or confirmed facsimile transmission addressed as
follow, or to such other address as may be designated from time to time:
If to Pfizer: To Pfizer at its address as set forth at the beginning
of this Agreement.
Attention: President, Central Research
with copy to: Counsel, Central Research
Pfizer Inc
Xxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
If to ArQule: To ArQule at its address as set forth at the beginning
of this Agreement.
Attention: President
with copy to: General Counsel
-24-
25
Notices shall be deemed given as of the date received.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. MISCELLANEOUS. 15.1 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective legal
representatives, successors and permitted assigns.
15.2 HEADING. Paragraph headings are inserted for convenience of reference
only and do not form a part of this Agreement.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original.
15.4 AMENDMENT, WAIVER. This Agreement may be amended, modified, superseded
or canceled, and any of the terms may be waived, only by a written instrument
executed by each party or, in the case of waiver, by the party or parties
waiving compliance. The delay or failure of any party at any time or times to
require performance of any provisions shall in no manner affect the rights at a
later time to enforce the same. No waiver by any party of any condition or of
the breach of any term contained in this Agreement, whether by conduct, or
otherwise, in any one or more instances, shall be deemed to be, or considered
as, a further or continuing waiver of any such condition or of the breach of
such term or any other term of this Agreement.
15.5 NO THIRD PARTY BENEFICIARIES. No third party including any employee of
any party to this Agreement shall have or acquire any rights by reason of this
Agreement. Nothing contained in this Agreement shall be deemed to constitute the
parties partners with each other or any third party.
15.6 ASSIGNMENT AND SUCCESSORS. This Agreement may not be assigned by
either arty, except that each party may assign this Agreement and the rights and
interests of such party, in
-25-
26
whole or in part, to any of its Affiliates, any purchaser of all or
substantially all of its assets or to any successor corporation resulting from
any merger or consolidation of such party with or into such corporations.
15.7 Y2K COMPLIANCE. ArQule represents and covenants that Y2K issues will
not materially affect Production Facility and ArQule Technology. Pfizer shall
have the right to inspect and/or evaluate the Production Facility and ArQule
Technology and documentation thereof in order to confirm such representation.
15.8 FORCE MAJEURE. Neither Pfizer nor ArQule shall be liable for failure
of or delay in performing obligations set forth in this Agreement, and neither
shall be deemed in breach of its obligations, if such failure or delay is due to
natural disasters or any causes reasonably beyond the control of Pfizer or
ArQule.
15.9 SEVERABILITY. If any provision of this Agreement is or becomes invalid
or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of the
Agreement shall lot be affected.
15.10 [*]
------------------
*Confidential treatment has been requested for the marked portion.
-26-
27
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
PFIZER INC. ARQULE, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx Xxxx
----------------------------------- ---------------------------------
Title: Sr. Vice President Title: CEO
------------------------------- ------------------------------
Date: 14 June 1999 Date: 19 July 1999
-------------------------------- -------------------------------
cc: Pfizer Inc, Xxxxx Xxxxxxxx, Xxxxxx, XX
-27-
28
EXHIBIT A
ArQule Patents
[*]
-----------------
* Confidential Treatment has been requested for the marked portion.
-28-
29
EXHIBIT B
AMAP Description
[*]
-----------------
*Confidential Treatment has been requested for the marked portion.
-29-
30
EXHIBIT C
System Equipment
[*]
-----------------
*Confidential Treatment has been requested for the marked portion.
-30-
31
EXHIBIT D
Collaboration Plan
[*]
-----------------
*Confidential Treatment has been requested for the marked portion.
-31-
32
EXHIBIT E
Sublease
[Filed as Exhibit 10.2 to Arqule's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999 and incorporated herein by reference.]
-32-
33
EXHIBIT F
Production Plan
-----------------
*Confidential Treatment has been requested for the marked portion.
-33-
