Exhibit 10.13
CuraGen Corporation has omitted from this Exhibit 10.13 portions of the
Agreement for which CuraGen Corporation has requested confidential treatment
from the Securities and Exchange Commission. The portions of the Agreement for
which confidential treatment has been requested are marked with X's in brackets
and such confidential portions have been filed separately with the Securities
and Exchange Commission.
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
BETWEEN
PIONEER HI-BRED INTERNATIONAL, INC.
AND
CURAGEN CORPORATION
May 16, 1997
5/16/97
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
This COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement")
is entered into as of May 16, 1997 by and between PIONEER HI-BRED INTERNATIONAL,
INC. ("PIONEER"), an Iowa corporation having its registered office at 000
Xxxxxxx Xxxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000-0000 , and CURAGEN
Corporation ("CURAGEN"), a Delaware corporation, having its registered office at
000 Xxxx Xxxxx Drive, 00xx Xxxxx, Xxx Xxxxx, XX 00000, X.X.X.
WHEREAS, CURAGEN has expertise in the discovery and characterization
of genes utilizing proprietary technologies; and
WHEREAS, PIONEER has expertise in the breeding and development of
proprietary crop species and proprietary planting seed; and
WHEREAS, PIONEER and CURAGEN wish to enter into this Agreement in
order to collaborate in the performance of research to discover and develop
genes associated with plant growth and development; and
WHEREAS, CURAGEN will perform research which will be funded and
supported by PIONEER in order to discover and develop such genes and will
license the results of such research to PIONEER in the Territory for the purpose
of the development, testing, manufacture and sale of products in the PIONEER
Commercialization Field (as hereinafter defined); and
WHEREAS, PIONEER will perform research in order to develop products
and technology based on the genes and other research results discovered by
CURAGEN and will grant to CURAGEN an option to license the results of such
research in the territory for the purpose of the development, testing,
manufacture and sale of products in the CURAGEN Commercialization Field (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the parties hereby agree
as follows:
1. DEFINITIONS
-----------
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Whenever used in this Agreement with an initial capital letter, the
terms defined in this Section 1 shall have the meanings specified.
1.1 "Affiliate" means any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a party to this Agreement.
"Control" means ownership, directly or through one or more Affiliates, of forty
percent (40%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or forty percent (40%) or more of
the equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.
1.2 "Agent" shall mean any corporation, firm, limited liability
company, partnership or other entity through which PIONEER and/or any Affiliate
produces and/or markets Licensed Products. An Agent shall not be deemed a
sublicensee hereunder.
1.3 "Agricultural Chemical" means a chemical or non-chemical Licensed
Product other than a Seed Product or a Non-Seed Plant Product that is used
directly in crop production, including but not limited to fertilizers and
pesticides.
1.4 "Confidential Information" means all information (including but
not limited to information about any element of Proprietary Know-How) which is
disclosed by one party to the other hereunder or under the Superseded
Confidentiality Agreement (as defined in Section 13.13) except to the extent
that such information (i) as of the date of disclosure is demonstrably known to
the party receiving such disclosure or its Affiliates, as shown by written
documentation, other than by virtue of a prior confidential disclosure from the
other party to such party or its Affiliates; (ii) as of the date of disclosure
is in, or subsequently enters, the public domain, through no fault or omission
of the party receiving such disclosure; or (iii) as of the date of disclosure or
thereafter is obtained from a third party free from any obligation of
confidentiality.
1.5 "CURAGEN Commercialization Field" means all human healthcare and
pharmaceutical (including, without limitation, therapeutic, prophylactic and
diagnostic) applications, animal health applications and microbial applications.
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1.6 "Development Program" has the meaning set forth in Section 2.4.1
1.7 "Effective Date" means June 1, 1997 unless another date is agreed
upon by unanimous decision of the RDSC.
1.8 "Fiscal Quarter" means one quarter of a Fiscal Year.
1.9 "Fiscal Year" means the twelve month period beginning September 1
and ending August 31.
1.10 "FTE" means the equivalent of a full year of effort on a full
time basis of a scientist or other professional possessing skills and experience
necessary to carry out the R&D Program, determined in accordance with CURAGEN's
normal policies and procedures.
1.11 "Full-Price Unit" means units (i.e., packages) of seed that are
invoiced or otherwise transferred to Third Parties by PIONEER, its Affiliates,
Agents, licensees and/or sublicensees at full price or full price discounted for
volume, pre-pay or other trade discounts.
1.12 "Genomics Research" means the discovery and analysis of genes,
the discovery and analysis of the expression of genes, the discovery and
analysis of the function of genes, and discovery and analysis of mutations and
the pathways in which genes interact.
1.13 "Genomics Technology" means hardware, software and methods,
together with any copyright, patent application or patent with claims thereto,
relating to techniques and technologies for Genomics Research developed or
invented by CURAGEN, PIONEER or any PIONEER Affiliate, solely or jointly, in the
course of performance of the R&D Program, but shall not include Improvements to
the GeneScape(TM) database and software. "CURAGEN Genomics Technology" means
Genomics Technology developed or invented by CURAGEN. "PIONEER Genomics
Technology" means Genomics Technology developed or invented by PIONEER. "Joint
Genomics Technology" means Genomics Technology developed or invented jointly by
both parties.
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1.14 An item will be considered "jointly" developed or invented by
both parties if employees and/or consultants of both parties made an Inventive
Contribution to the invention or development thereof.
1.15 A party or a party's employees or consultants will be deemed to
have made an "Inventive Contribution":
A. to a patentable invention or copyrightable work if such employee
or consultant would be considered an inventor or author under 35
U.S.C. et. seq. or 17 U.S.C. et. seq., and as interpreted by the
U.S. Patent and Trademark Office and the U.S. Copyright Office,
respectively, and the United States courts, or
B. to any item, if the Confidential Information, Proprietary
Intellectual Property, or Research Results of such party were
actually used in the development or invention of the item in
question in a substantive manner, or if the development or
invention of the item was actually based in a substantive manner
on such party's Confidential Information, Proprietary
Intellectual Property, or Research Results.
1.16 "Improvements" means Pioneer-developed enhancements to the
GeneScape(TM) database and software that are uniquely applicable to the
GeneScape(TM) database and software and are not useful in databases or software
other than GeneScape(TM) database and software.
1.17 "Licensed Product" means any product or any part thereof, that
(i) the development, production, use or sale of which would infringe any issued
and unexpired claim contained in or any copyright included in CURAGEN Patent
Rights or Joint Patent Rights but for the license granted hereunder, or (ii)
which incorporates, or the discovery, development or production of which
incorporates or uses CURAGEN or Joint Proprietary Know-How.
1.18 "License Term" means the time period referenced in Section
8.2(a).
1.19 "Net Sales" means, with respect to a Licensed Product that is a
Seed Product within PIONEER Crop Species, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]
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[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxx
xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].
1.20 "Non-PIONEER Crop Species" means [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].
1.21 "Non-Seed Plant Product" means any Licensed Product other than a
Seed Product which is (i) a plant, (ii) a part of a plant, or (iii) an extract
from a plant, in each case whether in unprocessed or processed form, including
feed, food, industrial materials and fibers. Non-Seed Plant Product shall not
include any product produced in a plant or extracted from a plant which is
within the CURAGEN Commercialization Field or the Other Commercialization Field.
For example, a human protein produced in a plant shall not be a Non-Seed Plant
Product.
1.22 "Other Commercialization Field" means all fields other than the
PIONEER Commercialization Field and the CURAGEN Commercialization Field.
1.23 "Patent Coordinator" has the meaning set forth in Section 6.3
1.24 "Patent Rights" means the rights and interests in and to (i) issued
patents and pending patent applications in any country, including, but not
limited to, all provisional
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applications, substitutions, continuations, continuations-in-part, divisions,
and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, whether owned solely or jointly by a
party or licensed in by a party now or in the future, with the right to
sublicense, wherein at least one claim of such patent right is directly based,
in whole or in part, on Research Results other than Genomics Technology, and
(ii) copyrights with respect to Research Data and Proprietary Know-How, other
than Genomics Technology. "CURAGEN Patent Rights" shall mean Patent Rights with
respect to CURAGEN Proprietary Know-How and CURAGEN Research Results. "PIONEER
Patent Rights" shall mean Patent Rights with respect to PIONEER Proprietary
Know-How and PIONEER Research Results. "Joint Patent Rights" shall mean Patent
Rights with respect to Joint Proprietary Know-How and Joint Research Results.
1.25 "PIONEER Commercialization Field" means (i) Seed Products; (ii)
Non-Seed Plant Products and (iii) Agricultural Chemicals.
1.26 "PIONEER Crop Species" means [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].
1.27 "PIONEER Proprietary Material" means tissue samples or germplasm
provided by PIONEER to CURAGEN in order for CURAGEN to perform the R&D Program
and shall also be deemed to include the actual nucleic acids and other
substances contained in such tissue samples or germplasm.
1.28 "Proprietary Intellectual Property" means all Patent Rights and
Proprietary Know-How. "CURAGEN Proprietary Intellectual Property" shall mean
CURAGEN Patent Rights and CURAGEN Proprietary Know-How. "PIONEER Proprietary
Intellectual Property" shall mean PIONEER Patent Rights and PIONEER Proprietary
Know-How. "Joint Proprietary Intellectual Property" shall mean Joint Patent
Rights and Joint Proprietary Know-How.
1.29 "Proprietary Know-How" means, without limitation, all Research
Results and all non-patented inventions, improvements, discoveries, proprietary
materials, biological substances, data, know-how and trade secrets based on
Research Results. Proprietary Know-How shall not include Genomics Technology.
"CURAGEN Proprietary Know-How shall mean Proprietary Know-How invented or
developed by CURAGEN. "PIONEER Proprietary Know-
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How" shall mean Proprietary Know-How invented or developed by PIONEER. "Joint
Proprietary Know-How" shall mean Proprietary Know-How invented or developed
jointly by both parties.
1.30 "R&D Field" means PIONEER Crop Species and Non-PIONEER Crop
Species.
1.31 "R&D Program" means the research and development program to be
conducted by CURAGEN and PIONEER pursuant to Section 2 and reflected in the Work
Plans.
1.32 "R&D Steering Committee" or "RDSC " means the committee created
pursuant to Section 2.2 hereof.
1.33 "Research Data" means all differential expression and xxxxxxxx
xxxx and any other information obtained, developed or derived in the course of
performance of the R&D Program, but excluding Genomics Technology.
1.34 "Research Materials" mean all tangible property invented,
obtained, discovered, developed or derived, or the function or utility of which
is discovered or determined, in the course of performance of the R&D Program
including, without limitation, all cDNAs cloned and/or sequenced in the course
of performance of the R&D Program, but excluding Genomics Technology.
1.35 "Research Results" means all Research Data and Research
Materials, collectively. "CURAGEN Research Results" means Research Results
invented or developed by CURAGEN. "PIONEER Research Results" means Research
Results invented or developed by PIONEER. "Joint Research Results" means
Research Results invented or developed jointly by both parties.
1.36 "Research Term" has the meaning set forth in Section 2.3.1.
1.37 "Royalty Reduction Date" has the meaning set forth in Section
8.4.4.
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1.38 "Sample Unit" means units (i.e., packages) of seed that are
invoiced or otherwise transferred to Third Parties by PIONEER, its Affiliates,
Agents, licensees and/or sublicensees for promotional purposes at no value.
1.39 "Seed Product" means a Licensed Product that is a seed of any
plant for use as planting seed.
1.40 "Staffing Level" has the meaning set forth in Section 2.1.1.
1.41 "Target Trait" means a Trait selected by PIONEER for which
CURAGEN will endeavor to identify and confirm associated genes in the course of
performance of the R&D Program.
1.42 "Territory" means all the countries of the world.
1.43 "Third Party" shall mean any party who is not a party hereto, or
an Affiliate, Agent, licensee or sublicensee thereof.
1.44 "Trait" means a characteristic of a product associated with one
or more genes which is manipulated (either through continued selection or
transgenic intervention) and tracked (as evidenced by recorded notes) by PIONEER
as part of the product development process. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].
1.45 "Work Plan" means the written plan describing the activities to
be carried out during each semi-annual period of the R&D Program pursuant to
this Agreement. Each Work Plan will be set forth in a written document prepared
by CURAGEN and PIONEER and approved by the R&D Steering Committee.
2. R&D PROGRAM
-----------
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2.1 Implementation of R&D Program.
-----------------------------
2.1.1 Basic Provisions of Program.
---------------------------
(a) The objective of the R&D Program shall be the discovery and
characterization of genes associated with plant growth and development,
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. CURAGEN and PIONEER shall each use
commercially reasonable efforts to perform such tasks as are set forth to be
performed by it in the Work Plans, including the provision of such facilities,
materials (including PIONEER Proprietary Materials), equipment and consultants
as each deems necessary to the achievement of such Work Plans. In carrying out
the R&D Program, CURAGEN shall devote an average of at least [XXXXXXXX] FTEs per
year, including [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] to the R&D Program
over its five year duration (the "Staffing Level") unless PIONEER has requested
an increase in the Staffing Level as provided in (b) below. At least one FTE,
who shall be an individual reasonably acceptable to PIONEER, shall be devoted to
the R&D Program on a full-time basis.
(b) PIONEER may, at its sole discretion, request an increase in the
Staffing Level of up to [XXXXXX] additional FTEs per year to be devoted to the
R&D Program by giving [XXXXXXXXXXXXXX] prior notice to CURAGEN, which notice may
not be given more than [XXXXXXXXXXXXXXXXXXXXXXX]. CURAGEN will use commercially
reasonable efforts to increase the staffing level as requested as promptly as
practical. Once the Staffing Level is increased, it may not be decreased during
the Research Term without the consent of CURAGEN, which consent may be withheld
at CURAGEN's sole discretion.
2.1.2 Collaborative Efforts and Reports.
---------------------------------
(a) The parties agree that the successful execution of the R&D
Program will require the collaborative use of both parties' areas of expertise.
The parties shall keep the RDSC fully informed about the status of the portions
of the R&D Program they respectively perform. In particular, without limitation,
each party shall furnish to the RDSC and each other semi-annual written reports
within thirty (30) days after the end of each semi-annual period, describing the
progress of its activities in reasonable detail, including (x) a detailed
accounting of the FTEs used and actual allocation of FTEs, and (y) a description
of Proprietary Intellectual Property arising
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from (i) CURAGEN's research efforts and accomplishments and (ii) PIONEER's
research programs, breeding programs and field tests. The RDSC shall also be
kept informed of any efforts by PIONEER or the parties jointly to (x) pursue
commercialization partners in the PIONEER Commercialization Field or (y) pursue
research partners for the purpose of facilitating additional research within the
R&D Field beyond the scope of the research on Target Traits described in the
Work Plan. Any such expansion of the research efforts in the R&D Field shall
include additional research funding for CURAGEN and may include additional
payments to the parties in the form of additional up front fees, milestone fees,
royalties or license fees which shall be shared by the parties in a mutually
agreeable manner so as to reflect each party's contribution to any such expanded
collaboration.
(b) Scientists at CURAGEN and PIONEER shall cooperate in the
performance of the R&D Program and, subject to any confidentiality obligations
to third parties, shall exchange information and materials as necessary to carry
out the R&D Program, subject to the provisions of Section 5. Each party will
attempt to accommodate any reasonable request of the other party to send or
receive personnel for purposes of collaborating or exchanging information under
the R&D Program. Such visits and/or access will have defined purposes and be
scheduled in advance. The requesting party will bear the travel and lodging
costs of any such personnel.
(c) CURAGEN shall set up and maintain, throughout the Research
Term, a secure partition of its GeneScape(TM) database and software and provide
online E-mail and telephone help in the use thereof to PIONEER. CURAGEN and
PIONEER shall jointly set up and maintain a secure connection to said partition
of the GeneScape(TM) database and software in order to give PIONEER on-line
access thereto. PIONEER shall have no rights to use the GeneScape(TM) database
and software except as set forth above and in Section 8.1.1(b). The parties
recognize that PIONEER may desire to include other data in GeneScape(TM)
database and software and/or that PIONEER may wish to analyze Research Data with
other data analysis tools not available in GeneScape(TM) database and software
or in conjunction with other data owned or controlled or accessed by PIONEER. In
recognition of this desire, the Parties may cooperate in an effort to
incorporate other data and/or data analysis tools into the GeneScape(TM)
database and software.
(d) After the first six (6) months of the R&D Program, but before
the first anniversary of the R&D Program, CURAGEN and PIONEER shall discuss
strategies and the resources needed to import a copy of Research Data to
PIONEER, if necessary for efficiency, and to keep
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it updated. Any such Research Data imported to PIONEER may be used by PIONEER
only for activities pursuant to Section 8.8.
2.1.3 Work Plans.
----------
The Work Plan for the first six months of the R&D Program will be
agreed upon by the parties within one (1) month of the Effective Date and will
include plans to implement the installation of access to the GeneScape(TM)
database and software for PIONEER. For each subsequent semi-annual period of the
R&D Program, the Work Plan shall be prepared by CURAGEN and PIONEER and approved
by the RDSC no later than thirty (30) days before the end of the prior
semi-annual period. The Work Plan shall set forth specific research and
development objectives, milestones and resource allocation requirements and
shall be designed to facilitate the earliest practical identification of genes
associated with Target Traits selected by PIONEER. Each Work Plan shall be in
writing and shall set forth with reasonable specificity tasks for the period
covered by the Work Plan. The RDSC may make adjustments in the Work Plan as it
may determine.
2.1.4 Exclusivity.
-----------
(a) CURAGEN agrees that during the Research Term CURAGEN will
not collaborate in the performance of research in the R&D Field with any other
commercial party or will not undertake activities for the benefit of any other
commercial party in the R&D Field, except as otherwise permitted hereby.
Notwithstanding the foregoing, nothing contained in this Agreement shall in any
way restrict CURAGEN's right to perform research or collaborate with third
parties outside of the R&D Field and to grant to third parties the right to
exploit the results of any such research or collaborations without restriction.
(b) PIONEER agrees that for the duration of this Agreement,
PIONEER will not utilize any CURAGEN Proprietary Intellectual Property or
CURAGEN Research Results for any purpose other than as provided herein. CURAGEN
agrees that CURAGEN will not use and/or replicate any PIONEER Proprietary
Materials or utilize any PIONEER Proprietary Intellectual Property or PIONEER
Research Results for any purpose other than as provided herein.
2.2 R&D Steering Committee.
----------------------
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2.2.1 Establishment and Functions of RDSC.
-----------------------------------
(a) CURAGEN and PIONEER shall establish an "R&D Steering
Committee" (the "RDSC"). The RDSC will act on behalf of the two companies and
will be responsible for the planning and monitoring of the R&D Program and for
setting forth specific research and development objectives, milestones and
resource allocation requirements. In particular, the activities of the RDSC
shall include reviewing progress in the R&D Program and recommending necessary
adjustments to the R&D Program, including any study substitutions deemed
desirable based on results and on PIONEER's commercial interest, as the research
and development progresses, and considering and evaluating potential
collaborations with third parties in the R&D Field or the PIONEER
Commercialization Field.
(b) In planning and monitoring the R&D Program, the RDSC shall
assign tasks and responsibilities taking into account each party's respective
specific capabilities and expertise in order in particular to avoid duplication
and enhance efficiency and synergies.
2.2.2 RDSC Membership.
---------------
CURAGEN and PIONEER each shall appoint, in their sole discretion,
three members to the RDSC, which shall include a Co-Chair to be designated by
PIONEER and a Co-Chair to be designated by CURAGEN. Substitutes or alternates
for the Co-Chairs or other RDSC members may be appointed at any time by notice
in writing to the other party. The parties may mutually agree to change the size
of the RDSC as long as there shall be an equal number of representatives of each
party on the RDSC. The initial Co-Chairs and other RDSC members shall be
designated by the parties upon execution of this Agreement. CURAGEN shall
appoint a Project Coordinator, who shall be reasonably satisfactory to PIONEER,
to serve as the principal liaison with PIONEER for the R&D Program.
Such Project Coordinator will be one of CURAGEN's members of the RDSC.
2.2.3 Meetings.
--------
The RDSC shall meet at least semi-annually, with such meetings to be
held, alternately, in New Haven, Connecticut, and Des Moines, Iowa, unless the
parties agree otherwise. Any
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additional meetings shall be held at places and on dates selected by the Co-
Chairs of the RDSC. In addition, the RDSC may act without a formal meeting by a
written memorandum signed by the Co-Chairs of the RDSC. Whenever any action by
the RDSC is called for hereunder during a time period in which the RDSC is not
scheduled to meet, the Co-Chairs of the RDSC shall cause the RDSC to take the
action in the requested time period by calling a special meeting or by action
without a meeting. Subject to the obligations set forth in Section 5,
representatives of each party or of its Affiliates, in addition to the members
of the RDSC, may attend RDSC meetings at the invitation of either party with the
prior approval of the other party, which shall not be unreasonably withheld.
2.2.4 Minutes.
-------
The RDSC shall keep accurate minutes of its deliberations which
record all proposed decisions and all actions recommended or taken. Drafts of
the minutes shall be delivered to the Co-Chairs of the RDSC within twenty (20)
days after the 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-Chairs and shall be issued in final form only with their
approval and agreement as evidenced by their signatures on the minutes.
2.2.5 Quorum; Voting; Decisions.
-------------------------
At each RDSC meeting, at least two (2) member(s) appointed by each
party shall constitute a quorum and decisions shall be made by majority vote.
Each RDSC member shall have one vote on all matters before the RDSC, provided
that the member or members of each party present at an RDSC meeting shall have
the authority to cast the votes of any of such party's members on the RDSC who
are absent from the meeting. Notwithstanding the foregoing, the objective of the
parties to this Agreement is that decisions of the RDSC shall be made by
consensus. However, except as otherwise set forth herein, in the event that the
RDSC is unable to resolve any matter before it as set forth above, such matter
shall be resolved by PIONEER, taking into reasonable consideration the best
interests of both PIONEER and CURAGEN.
2.2.6 Expenses.
--------
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CURAGEN and PIONEER shall each bear all expenses of their respective
RDSC members related to their participation on the RDSC and attendance at RDSC
meetings.
2.3 Research and Development Term.
-----------------------------
2.3.1 Term of the R&D Program.
-----------------------
The R&D Program shall expire five (5) years after the Effective Date
unless extended as provided below or unless earlier terminated by either party
pursuant to the provisions in Section 2.3.3 and/or Article 9 (the "Research
Term").
2.3.2 Extension of the Research Phase of the R&D Program.
--------------------------------------------------
The Research Term may be extended upon six (6) months prior written
notice by mutual agreement of the parties on terms to be agreed upon between the
parties.
2.3.3 Early Termination of the R&D Program.
------------------------------------
(a) PIONEER may terminate the R&D Program at its sole
discretion upon three (3) months prior written notice, such notice to be given
at any time after eighteen months have elapsed from the Effective Date, if
[XXXXXXXX] prior to the time notice is given; provided, however, that such
notice shall be deemed automatically withdrawn if [XXXXXXX], and provided,
further, that for any such termination which would take effect prior to the
third anniversary of the Effective Date, PIONEER shall pay to CURAGEN upon such
termination an amount equal to the lesser of (i) nine months of research funding
at levels existing at the time of such termination, or (ii) the balance of the
research funding due through the third anniversary of the Effective Date at
levels existing at the time of such termination. Any such payments shall be made
within thirty (30) days of such termination. This Agreement shall terminate
simultaneously with the termination of the R&D Program under this Section
2.3.3(a) and all remaining PIONEER Proprietary Material provided to CURAGEN
under this Agreement shall be returned to PIONEER or destroyed.
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(b) Either party may terminate the R&D Program after the third
anniversary of the Effective Date upon three (3) months prior written notice;
provided, however, that CURAGEN shall have no such rights to terminate if the
Staffing Level is, or has been duly requested by PIONEER to be, set at
[XXXXXXXX] FTEs prior to the giving of any such termination notice by CURAGEN.
(c) Any termination of the R&D Program under Section 2.3.3(b)
shall be without prejudice to the rights of either party against the other, then
accruing or otherwise accrued under this Agreement and upon any such
termination, all remaining PIONEER Proprietary Material provided to CURAGEN
under this Agreement shall be returned to PIONEER or destroyed.
2.3.4 Post Research Term Cooperation.
------------------------------
At least three months prior to the expiration or termination pursuant
to Section 2.3.3 of the Research Term, the parties shall meet to agree on
mechanisms for coordinating and managing activities which shall occur after the
expiration of the Research Term which would otherwise be addressed by the RDSC
hereunder including but not limited to (i) reporting on the development of
Proprietary Intellectual Property; (ii) decisions with respect to patent filing
and prosecution; (iii) resolution of inventorship disputes; and (iv) other items
as needed.
2.4 Product Development.
-------------------
2.4.1 Development Obligations.
-----------------------
PIONEER agrees that it will use reasonable efforts to develop and
market Licensed Products in the PIONEER Commercialization Field throughout the
Territory at its own expense (the "Development Program"), but only to the extent
that the development and commercialization of such Licensed Products is
economically practicable and the market for such Licensed Products justifies, in
PIONEER's reasonable determination, such development and sale.
2.4.2 Reports.
-------
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After expiration or early termination pursuant to Section 2.3.3(b) of
the Research Term, PIONEER will keep CURAGEN fully informed concerning the
status of the Development Program for each Licensed Product. In particular,
without limitation, PIONEER shall (a) report to CURAGEN on an annual basis with
respect to all aspects of such development and commercialization activities; (b)
provide CURAGEN with summaries of all governmental filings filed in connection
with such Licensed Products in the United States and other countries; and (c)
provide such other information concerning such development and commercialization
activities as CURAGEN shall reasonably request.
3. EQUITY INVESTMENT
-----------------
In conjunction with the execution of this Agreement, PIONEER will
make an equity investment in CURAGEN of $7.5 million upon execution of this
Agreement. The equity investment will be in the form of a purchase of One
Million (1,000,000) shares of Series D Convertible Preferred Stock at a price of
$7.50 per share (the "Preferred Stock") pursuant to the provisions of a Stock
Purchase Agreement of even date herewith.
4. RESEARCH FUNDING
----------------
In partial consideration of the work to be done by CURAGEN in the R&D
Program, PIONEER will pay CURAGEN non-refundable research payments of
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] per year per FTE in the Staffing
Level during the first three years of the Research Term, commencing as of the
Effective Date. During the fourth and fifth years of the Research Term, PIONEER
will pay CURAGEN [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] per year per FTE, adjusted
for inflation occurring during the prior three year or four year term,
respectively, at the greater of (i) four percent (4%) per annum or (ii)
inflation as indicated by the Consumer Price Index for New Haven, Connecticut
for All Urban Consumers (CPI-U) (1982-84=100) published by the U.S. Department
of Labor, Bureau of Labor Statistics since the Effective Date. Such payments
will be made in advance, on or before the first day of each calendar quarter,
with the first and last payments prorated in the event that the Effective Date
is not the first day of a calendar quarter. In the event that the Staffing Level
is to change in any calendar quarter, such payment shall be pro-rated
accordingly based on the above-specified level of funding per FTE. The first
research payment shall be made simultaneously with the execution of this
Agreement and shall include all amounts necessary to
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make PIONEER current in research payments due since the Effective Date. PIONEER
will fund its own activities under the R&D Program.
5. TREATMENT OF CONFIDENTIAL INFORMATION
-------------------------------------
5.1 Confidentiality.
---------------
5.1.1 General.
-------
CURAGEN and PIONEER each recognize that the other party's
Confidential Information constitutes highly valuable and proprietary
confidential information. For the purposes hereof, PIONEER Proprietary Material
shall be deemed PIONEER Confidential Information. Subject to the terms and
conditions of Section 8, CURAGEN and PIONEER each agree that, except as required
by applicable law or regulation (including the filing and prosecution of patent
applications) or judicial or administrative order, during the term of this
Agreement and for five (5) years thereafter, (i) it will keep confidential, and
will cause its employees, consultants, Affiliates, licensees and sublicensees to
keep confidential, all Confidential Information of the other party that is
disclosed to it, or to any of its employees, consultants, Affiliates and
licensees and sublicensees, pursuant to or in connection with this Agreement;
and (ii) neither it nor any of its respective employees, consultants, Affiliates
and licensees and sublicensees shall use Confidential Information of the other
party for any purpose whatsoever except as expressly permitted in this
Agreement. Notwithstanding the foregoing, (i) either party may disclose
Confidential Information to its sublicensees as long as such sublicensees
execute a confidentiality agreement providing protections similar to those
contained herein, and (ii) PIONEER will reasonably cooperate with CURAGEN in the
making of reasonable disclosures of Confidential Information, CURAGEN Research
Results, Joint Research Results, CURAGEN Proprietary Intellectual Property and
Joint Proprietary Intellectual Property to investment bankers, investors and
potential investors of CURAGEN; provided, however, that such disclosures shall
only be made under the terms of a confidentiality agreement providing
protections similar to those contained herein.
5.1.2 Restricted Access.
-----------------
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CURAGEN and PIONEER each agree that any disclosure of the other
party's Confidential Information to any of its officers, employees, consultants
or agents or those of any of its Affiliates and licensees and sublicensees shall
be made only if and to the extent necessary to carry out its rights and
responsibilities under this Agreement, shall be limited to the maximum extent
possible consistent with such rights and responsibilities and shall only be made
to persons who are bound by written confidentiality agreements to maintain the
confidentiality thereof and not to use such Confidential Information except as
expressly permitted by this Agreement. Each party, upon the other's request,
will return all the Confidential Information disclosed to it by the other party
pursuant to this Agreement, including all copies and extracts of documents,
within sixty (60) days of the request of the disclosing party following the
expiration or termination of this Agreement; provided that a party may retain
Confidential Information of the other party relating to any license or right to
use Proprietary Intellectual Property which survives such termination and one
copy of all other Confidential Information may be retained in confidential and
inactive archives solely for the purpose of establishing the contents thereof.
5.1.3 Employee Confidentiality Agreements.
-----------------------------------
CURAGEN and PIONEER each represent that all of its employees and all
of the employees of its Affiliates, and any consultants to such party or its
Affiliates, participating in the R&D Program or who shall otherwise have access
to Confidential Information of the other party are bound by written agreements
to maintain such information in confidence and not to use such information
except as expressly permitted herein. Each party agrees to enforce
confidentiality obligations to which its employees and consultants (and those of
its Affiliates) are obligated.
5.2. Publicity.
---------
Neither party may disclose the existence or terms of this Agreement
without the prior written consent of the other party; provided, however, that
either party may make such a disclosure to the extent required by law and that
CURAGEN may make a disclosure of the existence and terms of this Agreement to
investors, prospective investors, lenders and other financing sources, and to
strategic partners or licensees for products in the CURAGEN Commercialization
Field; provided, however, that such disclosures shall only be made under the
terms of a confidentiality agreement providing protections similar to those
contained herein. The parties, upon the execution of this Agreement, will agree
to a news release for publication in
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general circulation periodicals and news wires. Once any written statement is
approved for disclosure by both parties, either party may make subsequent public
disclosures limited to the specific contents of such prior statement without the
further approval of the other party.
5.3. Publication.
-----------
It is expected that each party may wish to publish the results of its
research under this Agreement. In order to safeguard intellectual property
rights, the party wishing to publish or otherwise publicly disclose the results
of its research hereunder shall first submit a draft of the proposed manuscripts
to the RDSC for review, comment and consideration of appropriate patent action
at least thirty (30) days prior to any submission for publication or other
public disclosure. Within thirty (30) days of receipt of the prepublication
materials, the RDSC will advise the party seeking publication as to whether a
patent application will be prepared and filed or whether trade secret protection
should be pursued and, if so, the RDSC will, in cooperation with both parties,
determine the appropriate timing and content of any such publications.
5.4. Prohibition on Hiring.
---------------------
Neither PIONEER nor its Affiliates shall, during the Research Term,
but in any event for at least five (5) years from the Effective Date, hire any
person who was employed by CURAGEN or its Affiliates during such period, whether
such person is hired as an employee, investigator, independent contractor or
otherwise, without the express written consent of CURAGEN.
5.5 Consultants.
-----------
Prior to retaining any consultant who shall have access to any
Confidential Information of the other party or who shall participate in the
performance of the R&D Program, each party shall use reasonable efforts to
determine if such consultant has or will have any potential conflict of interest
with respect to the other party as a result of any other relationships of such
consultant and will not retain any consultant known to have such a conflict
without the consent of the other party, such consent to not be unreasonably
withheld.
6. INTELLECTUAL PROPERTY RIGHTS
----------------------------
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6.1 Disclosure of Inventions.
------------------------
Each party shall promptly inform the other and the RDSC about all
Research Results, Proprietary Intellectual Property and Genomics Technology. The
following provisions shall apply to rights in Research Results, Proprietary
Intellectual Property, and Genomics Technology.
6.2 Ownership.
---------
6.2.1 CURAGEN Intellectual Property Rights.
------------------------------------
CURAGEN shall have sole and exclusive ownership of all right, title
and interest on a worldwide basis in and to any Research Results, Proprietary
Intellectual Property, and Genomics Technology developed or invented solely by
employees or consultants of CURAGEN.
6.2.2 PIONEER Intellectual Property Rights.
------------------------------------
PIONEER shall have sole and exclusive ownership of all right, title
and interest on a worldwide basis in and to any Research Results, Proprietary
Intellectual Property, and Genomics Technology developed or invented solely by
employees or consultants of PIONEER.
6.2.3 Joint Intellectual Property Rights.
----------------------------------
PIONEER and CURAGEN shall jointly own all Research Results,
Proprietary Intellectual Property, and Genomics Technology jointly developed or
invented by employees or consultants of both CURAGEN and PIONEER.
6.3 Patent Coordinators.
-------------------
CURAGEN and PIONEER shall each appoint a patent coordinator (a
"Patent Coordinator") who shall serve as such party's primary liaison with the
other party on matters relating to patent filing, prosecution, maintenance and
enforcement. Each party may replace its Patent Coordinator at any time by notice
in writing to the other party. The initial Patent Coordinators shall be
designated by the parties upon execution of this Agreement.
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6.4 Inventorship.
------------
In case of dispute between CURAGEN and PIONEER over inventorship or
authorship, the RDSC, with the advice of the Patent Coordinators and counsel,
shall, at its next meeting following the disclosure of any Research Results,
Proprietary Intellectual Property or Genomics Technology pursuant to Section
6.1, make a determination of the inventor(s) or author(s) by application of the
standards embodied in United States patent and copyright law. The RDSC, with the
advice of the Patent Coordinators and counsel, shall also, in the case of
dispute, make any determination as to whether an invention is Genomics
Technology or an Improvement to GeneScape(TM) database and software.
7. PROVISIONS CONCERNING THE FILING, PROSECUTION
---------------------------------------------
AND MAINTENANCE OF PATENT RIGHTS
--------------------------------
The following provisions relate to the filing, prosecution and
maintenance of Patent Rights during the term of this Agreement:
7.1 Filing of Patents.
-----------------
7.1.1 Primary Responsibilities.
------------------------
In consultation with the Patent Coordinators, the RDSC will
coordinate the determination of what patents will be filed on Research Results
developed under the R&D Program. PIONEER will be responsible for the filing,
prosecution and maintenance (including the defense of interferences and similar
proceedings) of any patents on such Research Results, provided that PIONEER
shall use reasonable efforts to obtain patent coverage that is as broad as
possible to cover all potential commercial applications thereof, and provided
that CURAGEN will have the opportunity to provide substantive review and comment
on any such prosecution. Additionally, CURAGEN shall have a period of fifteen
(15) business days from receipt of any draft patent application to add any
proper claims and specifications outside of the PIONEER Commercialization Field.
7.1.2 Elective Termination of Rights.
------------------------------
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If at any time PIONEER wishes to discontinue the prosecution or
maintenance of any Patent Rights filed in accordance with Section 7.1.1, PIONEER
shall promptly give notice of such intention to CURAGEN. CURAGEN shall have the
right, but not the obligation, to assume responsibility for the prosecution of
any such Patent Rights at its own expense, by giving notice to PIONEER of such
intention within thirty (30) days and such Patent Rights shall thereafter be
treated as Patent Rights of CURAGEN. PIONEER shall transfer ownership of such
Patent Rights to CURAGEN, and PIONEER shall no longer have any rights hereunder
to such Patent Rights.
7.2 Expenses.
--------
PIONEER will bear the costs of the filing, prosecution and
maintenance of all Patent Rights for which it has responsibilities pursuant to
Section 7.1, provided, however, that if CURAGEN desires, at its sole discretion,
to add any claims to any Patent Rights which are outside of the PIONEER
Commercialization Field as provided in Section 7.1, CURAGEN shall pay for the
drafting and prosecution of any such claims, which drafting and prosecution
shall be performed by patent counsel designated by CURAGEN, who shall cooperate
with PIONEER's patent counsel as necessary.
8. LICENSE RIGHTS
--------------
8.1 License Grants.
--------------
8.1.1 Licenses to PIONEER.
-------------------
(a) CURAGEN hereby grants to PIONEER a sole and exclusive
license in the Territory, including the right to grant sublicenses, to develop,
have developed, make, have made, use, have used, distribute for production
and/or sale, offer for sale, sell, have sold, and import Licensed Products in
the PIONEER Commercialization Field under any and all CURAGEN and/or Joint
Research Results and Proprietary Intellectual Property. PIONEER shall have the
right to assign or otherwise transfer its rights in the license granted herein
(or any part thereof) to certain Affiliates such as PIONEER Overseas Corporation
for the purposes of conducting PIONEER's business. Notwithstanding any such
assignment, PIONEER shall be responsible for
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the activities, including all reporting and royalty obligations, of such
Affiliates as if they were PIONEER.
(b) As set forth in Section 2.1.2(c), during the Research Term,
CURAGEN hereby agrees to continue to maintain its GeneScape(TM) database and
software and to use such database and software in the R&D Program; provided
that, for a period starting at expiration or termination of the Research Term
and for three years thereafter, CURAGEN shall license the GeneScape(TM) database
and software to PIONEER under reasonable terms and conditions which, for
clarity, shall be based on CURAGEN's reasonable costs for maintenance and
support under such license, all in accordance with a GeneScape(TM) License
Agreement to be negotiated in good faith by the parties. Further, CURAGEN hereby
agrees that, at PIONEER's option and expense, CURAGEN shall export a licensed
copy of GeneScape(TM) database and software to PIONEER, along with the Research
Data if not already resident at PIONEER pursuant to Section 2.1.2(d), upon
request made within twelve (12) months after the expiration of the Research
Term.
8.1.2 Licenses to CURAGEN.
-------------------
(a) PIONEER hereby grants to CURAGEN, to the extent it has
rights to do so, an exclusive, worldwide, royalty-free license of perpetual
duration to any Improvements made to the GeneScape(TM) database and software by
PIONEER or by the parties jointly during the Research Term or during the period
of any license to PIONEER as set forth in Section 8.1.1(b). PIONEER hereby
agrees to execute and deliver any documents as requested by CURAGEN in order to
achieve the intent of this Section 8.1.2(a).
(b) PIONEER hereby grants to CURAGEN, to the extent PIONEER has
the right to grant such licenses, a worldwide, royalty-free (except for the
consideration set forth in Section 8.4.3) license of perpetual duration to
commercialize products or services based on Genomics Technology under PIONEER's
ownership interest in such Genomics Technology. Such license shall be exclusive
with respect to Joint Genomics Technology, subject only to [XXXXXXXX]. The
license granted herein may be exploited by CURAGEN in all fields and at all
times with the sole exception that CURAGEN will not exploit such license for the
benefit of any Third Party in the R&D Field during the Research Term.
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8.1.3 Rights in the Other Commercialization Field.
-------------------------------------------
Neither party shall have the right, including rights under any of the
other party's solely-owned Research Results or Proprietary Intellectual Property
or jointly owned Research Results or Proprietary Intellectual Property, to
develop, have developed, make, have made, use, distribute for sale, sell, offer
for sale or import any Licensed Product in the Other Commercialization Field, or
to grant any licenses to any third parties to do the same. If either party
wishes to develop and commercialize Licensed Products in the Other
Commercialization Field alone, in collaboration with the other party, or in
conjunction with any third party, it shall notify the other party. All such
opportunities shall only be pursued upon terms mutually agreeable to both
parties, such agreement to not be unreasonably withheld.
8.2 Term of License and Royalty Periods.
-----------------------------------
The License Term with respect to any rights licensed to PIONEER in
Section 8.1.1(a) for any Licensed Product shall commence upon the Effective Date
and shall continue on a country-by-country basis until the royalty obligation
set forth in Section 8.4 expires for such Licensed Product. Thereafter, PIONEER
shall have a fully paid-up license of perpetual duration to all CURAGEN Research
Results, all CURAGEN Proprietary Intellectual Property and CURAGEN's interest in
all Joint Research Results and Joint Proprietary Intellectual Property with
respect to such Licensed Product.
8.3 Licenses and Sublicenses to Third Parties.
-----------------------------------------
If PIONEER grants a license or sublicense to a Third Party with
respect to any CURAGEN Research Results, Joint Research Results, CURAGEN
Proprietary Intellectual Property and/or Joint Proprietary Intellectual
Property, PIONEER shall guarantee that such licensee or sublicensee will fulfill
all of PIONEER's obligations under this Agreement; provided, however, that
PIONEER shall remain directly liable for the fulfillment of all such obligations
unless otherwise consented to in writing by CURAGEN.
8.4 Payment of Royalties, Royalty Rates, Accounting for
---------------------------------------------------
Royalties and Records
---------------------
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8.4.1 Payment of Royalties to CURAGEN.
-------------------------------
PIONEER recognizes and acknowledges that each of the following,
separately and together, has substantial economic benefit to PIONEER:
(i) CURAGEN's expertise and know-how concerning the discovery
and characterization of genes in the R&D Field,
(ii) the performance by CURAGEN of the R&D Program on the
terms specified herein,
(iii) the disclosure to PIONEER of results obtained in the R&D
Program by CURAGEN,
(iv) access to CURAGEN's informatics capabilities and software,
(v) the licenses granted to PIONEER hereunder with respect to
CURAGEN Proprietary Know-How and Joint Proprietary Know-How
which are not within the claims of any letters patent owned
or controlled by CURAGEN,
(vi) the licenses granted to PIONEER under letters patent owned
or controlled by CURAGEN,
(vii) the foundation afforded to PIONEER for its internal program
of research, development, manufacturing and marketing of
products in the PIONEER Commercialization Field using gene
discovery and characterization technology by each of the
elements set forth in subparagraphs (i) through (v) above,
(viii) CURAGEN's commitment not to collaborate with any other
party in the R&D Field during the Research Term, as set
forth in Section 2.1.4(a), and
(ix) the "head start" afforded to PIONEER, whether or not any
patents issue with respect to any CURAGEN Proprietary Know-
How and whether or not any or all unpatented CURAGEN Know-
How becomes a part of the public domain, by each of the
elements set forth in subparagraphs (i) through (viii)
above,
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and in consideration of each, separately and together, and in consideration of
the fact that CURAGEN is relying upon PIONEER to produce Licensed Products in
the PIONEER Commercialization Field, PIONEER agrees to pay to CURAGEN earned
royalties with respect to sales by PIONEER, its Affiliates, Agents, licensees
and sublicensees of Licensed Products as follows:
PIONEER shall pay CURAGEN a royalty based on the Net Sales of
Licensed Products pursuant to Section 8.4.1(a) in each country until the royalty
obligation ceases as set forth in Section 8.4.4; provided, however, that a
royalty shall not be payable with respect to any Licensed Product which is
within the definition of Licensed Product solely under clause (ii) of Section
1.17 unless CURAGEN has made an Inventive Contribution to such Licensed Product.
For each Licensed Product, the royalty shall be as follows:
(a) For Licensed Products in the PIONEER Commercialization
Field that are Seed Products within PIONEER Crop Species that are invoiced or
otherwise transferred to a Third Party, the royalty shall be [XXXXXXXX].
(b) For all other Licensed Products in the PIONEER
Commercialization Field not covered in (a) above, PIONEER and CURAGEN will share
revenues from the commercialization of such Licensed Products using a mutually
agreeable formula to be negotiated upon request of PIONEER, such negotiation to
be conducted in good faith over a period of not more than ninety (90) days,
prior to commercialization by PIONEER or the execution of any agreement with
third parties or the granting of any license or sublicense for such Licensed
Products. Such formula shall recognize the relative value contributed by CURAGEN
to the Licensed Product and the relative value contributed by PIONEER's plant
genetic business and expertise existing outside the R&D Program. The parties
recognize that PIONEER has substantial expertise and investment in plant
genomics research and product development, and that the relative value of
CURAGEN's contribution may be comparatively small. If the parties cannot agree
on the formula or the valuation during such good faith negotiation, the parties
will submit to dispute resolution as provided in Article 12.
8.4.2 Alternate Net Sales Calculation.
-------------------------------
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The parties agree that prior to the first commercialization of a
Licensed Product by PIONEER or its Affiliates, Agents, licensees or sublicensees
pursuant to Section 8.4.1(a), the parties will meet to discuss in good faith an
amendment to this Agreement which would provide for an alternative definition of
Net Sales for such Licensed Product which may be based on the gross amount
invoiced, less the average over a prior period of the deductions set forth in
Section 1.19(a) through (d).
8.4.3 Royalty Reductions Due to Other Commercial Activities.
-----------------------------------------------------
The royalty specified in Section 8.4.1(a) [XXXXXXXX] may be
reduced as a result of good faith negotiations between the parties (i) in the
event that technologies or intellectual properties owned by third parties are
essential for commercialization of [XXXXXXXX] Licensed Products and depending
on the relative contribution of the third party technology [XXXXXXXX] and/or
(ii) in the event that exclusive or non-exclusive rights granted to CURAGEN as
set forth in Section 8.1.2(b) have enabled CURAGEN to develop material business
opportunities; provided, however, that the [XXXXXXXX] minimum royalty will not
be reduced [XXXXXXXX] and that such discussions shall occur only once with
respect to (i) or (ii) above. Any reduction based on (ii) above will recognize
the value contributed by PIONEER relative to the overall value contributed by
CURAGEN's Genomics Technology and CURAGEN's genomics technology and expertise
existing outside the R&D Program. The parties recognize that CURAGEN has
substantial expertise and investment in genomics and Genomics Research, and that
the relative value of the rights granted to CURAGEN in Section 8.1.2(b) may be
comparatively small.
8.4.4 Royalties After the Royalty Reduction Date.
------------------------------------------
For the reasons set forth in Section 8.4.1, for each Licensed Product
specified in Section 8.4.1(a), for exclusive use of CURAGEN Proprietary Know-How
and Joint Proprietary Know-How, PIONEER also hereby agrees to pay royalties to
CURAGEN on a country-by-country [XXXXXXXX] basis, [XXXXXXXX], after the Royalty
Reduction Date, as defined below, in such country. For purposes hereof, the
"Royalty Reduction Date" for a Licensed Product in each country shall be
[XXXXXXXX]
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[XXXXXXXX]
8.4.5 Payment Dates and Reports.
-------------------------
Royalties shall be paid by PIONEER on Net Sales within thirty (30)
days after the end of each of the first three Fiscal Quarters in the Fiscal Year
in which such Net Sales are made, and within sixty (60) days of the end of the
final Fiscal Quarter in any Fiscal Year; provided, however, that royalties for
the first three Fiscal Quarters of each Fiscal Year shall be based on
seventy-five percent (75%) of Net Sales in such Fiscal Quarters, with royalties
for the fourth quarter to be adjusted to account for actual Net Sales for the
entire Fiscal Year. Such payments shall be accompanied by a report showing the
quantity and Net Sales of each Licensed Product sold by PIONEER or any
Affiliate, licensee or sublicensee in each country, the applicable royalty rate
for such Licensed Product, any credits or offsets to be applied, and a
calculation of the amount of royalty due.
8.4.6 Accounting.
----------
The Net Sales used for computing the royalties payable to CURAGEN
hereunder shall be computed, and royalties shall be paid, in U.S. dollars. For
purposes of determining the amount of royalties due, the amount of Net Sales in
any foreign currency shall be computed by converting such amount into U.S.
dollars at the prevailing commercial rate of exchange for purchasing dollars
with such foreign currency as reported in The Wall Street Journal on the last
business day of the period to which a royalty payment relates.
8.4.7 Records.
-------
PIONEER, its Affiliates, licensees and sublicensees shall keep for
three (3) years from the date of each payment of royalties complete and accurate
records of sales by PIONEER and its Affiliates, licensees and sublicensees of
each Licensed Product in sufficient detail to allow the
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accruing royalties to be determined accurately. CURAGEN shall have the right for
a period of three (3) years after receiving any report or statement with respect
to royalties due and payable to appoint an independent certified public
accountant reasonably acceptable to PIONEER to inspect the relevant records of
PIONEER and its Affiliates, licensees and sublicensees to verify such report or
statement. PIONEER and its Affiliates, licensees and sublicensees shall make its
records available for inspection by such independent certified public accountant
during regular business hours at such place or places where such records are
customarily kept, upon reasonable notice from CURAGEN, solely to verify the
accuracy of the reports and payments. Such inspection right shall not be
exercised more than once in any Fiscal Year nor more than once with respect to
sales of any Licensed Product in any given payment period. CURAGEN agrees to
hold in strict confidence all information concerning royalty payments and
reports, and all information learned in the course of any audit or inspection,
except to the extent necessary for CURAGEN to reveal such information in order
to enforce its rights under this Agreement or if disclosure is required by law,
regulation or judicial order. CURAGEN shall pay for such inspections, except
that in the event there is any upward adjustment in aggregate royalties payable
for any Fiscal Year of the inspected party shown by such inspection of more than
four percent (4%) of the amount paid, PIONEER shall pay for such inspection.
8.4.8 Overdue Royalties.
-----------------
Royalties not paid within the time period set forth in Section 8.4.5
shall bear interest at a rate of one percent (1%) per month from the due date
until paid in full.
8.5 Legal Action.
------------
8.5.1 Actual or Threatened Infringement.
---------------------------------
(a) In the event either party becomes aware of any possible
infringement or unauthorized possession, knowledge or use of any Patent Rights
or Proprietary Know-How licensed hereunder (collectively, an "Infringement"),
that party shall promptly notify the other party and provide it with full
details. The parties will meet to determine the appropriate course of action,
and will collaborate in pursuing such course or action.
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(b) Notwithstanding the foregoing, if the parties do not
otherwise agree on a course of action, PIONEER shall have primary responsibility
for the prosecution, prevention or termination of any Infringement in the
PIONEER Commercialization Field at PIONEER's expense and with the sharing of
recoveries as specified below and CURAGEN shall have primary responsibility for
the prosecution, prevention or termination of any Infringement in the CURAGEN
Commercialization Field or the Other Commercialization Field at CURAGEN's
expense and with the sharing of recoveries as specified below. If either PIONEER
or CURAGEN, respectively, does not commence an action to prosecute, or otherwise
take steps to prevent or terminate an Infringement of a Patent Right for which
it has primary responsibility hereunder within sixty (60) days from such notice,
then the other party shall have the right and option to take such reasonable
action as it considers appropriate to prosecute, prevent or terminate such
Infringement. If either party determines that it is necessary or desirable for
the other to join any such suit, action or proceeding, the second party shall
execute all papers and perform such other acts as may be reasonably required in
the circumstances.
(c) PIONEER shall bear the cost of any proceeding or suit
under this Section 8.5.1 brought by PIONEER and CURAGEN shall bear the cost of
any proceeding or suit under this Section 8.5.1 brought by CURAGEN. In each such
case, the responsible party shall have the right first to reimburse itself out
of any sums recovered in such suit or in its settlement for all reasonable costs
and expenses, including reasonable attorney's fees, related to such suit or
settlement. The remainder is next to be used to reimburse the other party for
its costs and expenses so incurred. Any remaining amounts which are in the form
of compensatory damages in the PIONEER Commercialization Field shall be treated
as Net Sales hereunder; any remaining amounts which are in the form of
compensatory damages in the CURAGEN Commercialization Field shall be the
property of CURAGEN; and any punitive damages shall be shared equally by CURAGEN
and PIONEER. Any non-monetary recovery or award shall be shared as mutually
agreed between the parties hereto. Each party shall always have the right to be
represented by counsel of its own selection and at its own expense in any suit
instituted under this Section by the other party for an Infringement. If either
party lacks standing and the other party has standing to bring any such suit,
action or proceeding as specified above, then the other party shall do so at the
request of the responsible party and at the responsible party's expense.
(d) In any action under this Section 8.5.1, the parties shall
fully cooperate with and assist each other. No suit under Section 8.5.1
regarding CURAGEN or Joint Proprietary Intellectual Property may be settled by
PIONEER without CURAGEN's consent. No suit under
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5/16/97
Section 8.5.1 regarding PIONEER or Joint Proprietary Intellectual Property may
be settled by CURAGEN without PIONEER's consent.
8.5.2 Defense of Claims Asserted by Third Parties.
-------------------------------------------
(a) Notwithstanding anything to the contrary in this Agreement,
in the event that any action, suit or proceeding is brought against CURAGEN or
PIONEER or any Affiliate, Agent, licensee or sublicensee of PIONEER alleging the
infringement of the intellectual property rights of a third party by reason of
the discovery, development, manufacture, use, sale, importation or offer for
sale of a Licensed Product by PIONEER or its Affiliates, Agents, licensees or
sublicensees, PIONEER will have the obligation to defend itself and CURAGEN and
such Affiliate, Agent, licensee or sublicensee in such action, suit or
proceeding at PIONEER's expense, except if the action, suit or proceeding is
brought primarily due to the actions of CURAGEN in its discovery and
characterization of genes, including but not limited to the use of CURAGEN's
proprietary technologies. (In such case, PIONEER shall have no obligation to
defend CURAGEN.) CURAGEN shall have the right to separate counsel at its own
expense in any such action or proceeding and PIONEER will reimburse CURAGEN for
all reasonable expenditures incurred in connection therewith. The parties will
cooperate with each other in the defense of any such suit, action or proceeding.
The parties will give each other prompt written notice of the commencement of
any such suit, action or proceeding or claim of infringement and will furnish
each other a copy of each communication relating to the alleged infringement.
PIONEER shall not compromise, litigate, settle or otherwise dispose of any such
suit, action or proceeding which involves CURAGEN Proprietary Intellectual
Property or Joint Proprietary Intellectual Property without CURAGEN's advice and
prior consent, provided that CURAGEN shall not unreasonably withhold its consent
to any settlement which does not have a material adverse effect on CURAGEN or
CURAGEN's business.
(b) Notwithstanding anything to the contrary in this
Agreement, in the event that any action, suit or proceeding is brought against
PIONEER or CURAGEN or any Affiliate, licensee or sublicensee of CURAGEN alleging
the infringement of the intellectual property rights of a third party by reason
of the discovery, development, manufacture, use, sale, importation or offer for
sale of a Licensed Product by CURAGEN or its Affiliates, licensees or
sublicensees, CURAGEN will have the obligation to defend itself and PIONEER and
such Affiliate, licensee or sublicensee in such action, suit or proceeding at
CURAGEN's expense, except if the action, suit or proceeding is brought primarily
due to the use by CURAGEN of PIONEER developed
32
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technologies. (In such case, CURAGEN is under no obligation to defend or to pay
for PIONEER's defense.) PIONEER shall have the right to separate counsel at its
own expense in any such action or proceeding and CURAGEN will reimburse PIONEER
for all reasonable expenditures incurred in connection therewith. The parties
will cooperate with each other in the defense of any such suit, action or
proceeding. The parties will give each other prompt written notice of the
commencement of any such suit, action or proceeding or claim of infringement and
will furnish each other a copy of each communication relating to the alleged
infringement. CURAGEN shall not compromise, litigate, settle or otherwise
dispose of any such suit, action or proceeding which involves PIONEER
Proprietary Intellectual Property or Joint Proprietary Intellectual Property
without PIONEER's advice and prior consent, provided that PIONEER shall not
unreasonably withhold its consent to any settlement which does not have a
material adverse effect on PIONEER or PIONEER's business.
8.6 CURAGEN License Option.
----------------------
8.6.1 Option.
------
PIONEER hereby grants to CURAGEN an option to obtain a worldwide
exclusive license in the CURAGEN Commercialization Field with the right to grant
sublicenses (to the extent PIONEER has the right to grant such license) under
(i) all PIONEER Research Results and PIONEER Proprietary Intellectual Property
and (ii) PIONEER's rights to Joint Research Results and Joint Proprietary
Intellectual Property.
8.6.2 Exercise of Option.
------------------
In the event that CURAGEN wishes to exercise its option to obtain an
exclusive license as provided in Section 8.6.1, CURAGEN shall give written
notice to PIONEER specifying in reasonable detail the rights that CURAGEN
desires to license (the "Notice"). The parties shall execute a license in a form
to be agreed upon within ninety (90) days of the date hereof, with the
definition of "Licensed Intellectual Property" completed to specify the Research
Results and/or Proprietary Intellectual Property specified in CURAGEN's Notice.
Such license (i) shall define Licensed Products and Net Sales in a manner
substantially similar to the definitions herein, (ii) shall require royalties to
be paid at a rate of [XXXXXXXX] of Net Sales for a period determined in a manner
substantially similar to the period determined pursuant to Section 8.4.4, and
(iii) shall
33
[Confidential Treatment Requested]
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contain other provisions substantially similar to the provisions regarding
licensing, royalties, record keeping and reporting, confidentiality, prosecution
and maintenance of patent rights, legal action, default and warranties and
indemnifications set forth herein. Any license requested in the Notice to any
Research Results or Proprietary Intellectual Property other than PIONEER
Proprietary Intellectual Property shall be royalty free.
8.6.3 Third Party Licenses.
--------------------
PIONEER shall not offer any licenses to any third parties in the
CURAGEN Commercialization Field under its rights in any PIONEER Proprietary
Intellectual Property or PIONEER Research Results or Joint Proprietary
Intellectual Property or Joint Research Results during the Research Term and for
a period of one year thereafter. After such period, PIONEER shall only be
permitted to offer any such licenses to any third parties which would limit its
ability to grant the licenses to CURAGEN as specified in Section 8.6.1 or 8.6.2
after giving CURAGEN sixty days prior written notice of its intent to do so in
order to give CURAGEN an opportunity to exercise its option with respect thereto
as set forth in Section 8.6.2.
8.7 Use of Research Results and Proprietary Intellectual
----------------------------------------------------
Property.
--------
CURAGEN shall use Research Results and Proprietary Intellectual
Property for the sole purpose of performing the R&D Program and shall keep all
Research Results and Proprietary Intellectual Property confidential as set forth
in Section 5, provided, however, that CURAGEN will have the right to use
Research Results and Proprietary Intellectual Property to pursue its research
and development and commercialization goals in the CURAGEN Commercialization
Field and will have the right to disclose or transfer Research Results and
Proprietary Intellectual Property for uses related to the CURAGEN
Commercialization Field; provided, however, that such disclosures shall only be
made under the terms of a confidentiality agreement providing protections
similar to those contained herein. CURAGEN recognizes that such disclosure may
compromise the value of Proprietary Know-How and Proprietary Intellectual
Property to PIONEER, and as such, CURAGEN agrees to use discretion to reasonably
protect against such compromise when making such disclosure.
8.8 Research Rights.
---------------
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CURAGEN shall have the sole and exclusive right to use all
Proprietary Intellectual Property and Research Results to conduct Genomics
Research in the CURAGEN Commercialization Field. PIONEER shall have the sole and
exclusive right to use all Proprietary Intellectual Property and Research
Results to conduct Genomics Research in the PIONEER Commercialization Field.
Both parties shall have the right to use all Proprietary Intellectual Property
and Research Results to conduct Genomics Research in the Other Commercialization
Field.
9. Termination and Disengagement
-----------------------------
9.1 Material Breach.
---------------
(a) A material breach of this Agreement by a party shall occur:
i) upon the failure of such party to pay, when
due, any amount due hereunder to the other party, effective
thirty (30) days after receiving written notice from the
other party of such failure to pay; or
ii) upon the material breach by such party of the
provisions of Section 5 effective sixty (60) days after
receiving written notice from the other party of such
breach; or
iii) upon breach of any material obligation or
condition by such party, effective sixty (60) days after
receiving written notice from the other party of such
breach.
(b) The foregoing notwithstanding, if the default or breach is
cured or shown to be non-existent within the aforesaid thirty (30) or sixty (60)
day period, the notice shall be deemed automatically withdrawn and of no effect.
(c) The foregoing notwithstanding, in the event that CURAGEN is
acquired by any material competitor of PIONEER, only a breach by PIONEER as set
forth in Section 9.1(a)(i) shall be deemed a material breach.
9.2 Effect of Breach.
----------------
(a) Effect of Material Breach by PIONEER. After the expiration
------------------------------------
of the date for curing any material breach by PIONEER under Section 9.1, without
the cure of such breach, the
35
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exclusive license granted by CURAGEN to PIONEER under Section 8.1.1 shall
convert to a non-exclusive license, without the right to sublicense. PIONEER
shall continue to pay royalties to CURAGEN at the rate as set forth in Section
8.4. In addition, the limitation imposed on CURAGEN under Section 8.1.3 shall
cease and CURAGEN shall be free to commercially exploit CURAGEN Research
Results, Joint Research Results, CURAGEN Proprietary Intellectual Property and
Joint Proprietary Intellectual Property in the Other Commercialization Field.
(b) Effect of Material Breach by CURAGEN. After the expiration
------------------------------------
of the date for curing any material breach by CURAGEN under Section 9.1, without
the cure of such breach, the royalties due by PIONEER to CURAGEN shall be
reduced commensurately with the impact of the breach by CURAGEN on PIONEER's
profitability from Licensed Products, as determined by mediation, as described
in Section 12.2.
9.3 Termination Upon Bankruptcy.
---------------------------
(a) If either party files for protection under bankruptcy
laws, makes an assignment for the benefit of creditors, appoints or suffers
appointment of a receiver or trustee over its property, files a petition under
any bankruptcy or insolvency act or has any such petition filed against it which
is not discharged within sixty (60) days of the filing thereof, then the other
party may terminate this Agreement by notice to such party.
(b) All rights and licenses granted under or pursuant to this
Agreement by CURAGEN to PIONEER, and by PIONEER to CURAGEN, are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code, licenses or rights to "intellectual property" as defined under Section
101(52) of the U.S. Bankruptcy Code. The parties agree that each party, as a
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the U.S. Bankruptcy Code, subject
to performance by the licensee of its preexisting obligations under this
Agreement. The parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against the licensor under the U.S. Bankruptcy Code,
the licensee shall be entitled to a complete duplicate of (or complete access
to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to the licensee (a) upon any such commencement of a
bankruptcy proceeding
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upon written request therefor by the licensee, unless the licensor elects to
continue to perform all of its obligations under this Agreement, or (b) if not
delivered under (a) above, upon the rejection of this Agreement by or on behalf
of the licensor upon written request therefor by the licensee, provided,
however, that upon the licensor's (or its successor's) written notification to
the licensee that it is again willing and able to perform all of its obligations
under this Agreement, the licensee shall promptly return all such tangible
materials to the licensor, but only to the extent that the licensee does not
require continued access to such materials to enable the licensee to perform its
obligations under this Agreement.
9.4 Surviving Provisions.
--------------------
Expiration or termination of this Agreement for any reason shall be
without prejudice to:
(a) the rights and obligations of the parties provided in
Article 3, Article 5, Sections 6.1, 6.2, 6.4, 7.1, 7.2, 8.1.2, 8.1.3, 8.4.6,
8.4.7, 8.4.8, 8.5, 8.7, 8.8, 10.1, 10.2, Article 11 and Article 12, all of which
shall survive such termination;
(b) CURAGEN's right to receive all payments earned and/or
accrued prior to expiration or termination hereunder; and
(c) any other rights or remedies which either party may
otherwise have against the other.
10. REPRESENTATIONS AND WARRANTIES
------------------------------
10.1 Mutual Representations.
----------------------
CURAGEN and PIONEER each represents and warrants as follows:
10.1.1 Organization.
------------
It is a corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware and of Iowa, respectively, is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the performance of its obligations
37
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hereunder 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.
10.1.2 Authorization.
-------------
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 or (b) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
any provision of its charter documents.
10.1.3 Binding Agreement.
-----------------
This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions.
10.1.4 No Inconsistent Obligation.
--------------------------
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 hereunder.
10.1.5 Warranty Disclaimer.
-------------------
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS
OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING.
10.1.6 Limited Liability.
-----------------
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NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER
CURAGEN NOR PIONEER WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY OR SERVICES.
10.2 PIONEER Representation.
----------------------
PIONEER represents to CURAGEN that no withholding tax is due on any
payment required to be made hereunder and that PIONEER will not withhold any
amounts on account of any tax or withholding.
11. INDEMNIFICATION
---------------
11.1 Indemnification of CURAGEN by PIONEER.
-------------------------------------
PIONEER shall indemnify, defend and hold harmless CURAGEN, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "CURAGEN Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the CURAGEN
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments of third parties, including without limitation personal
injury and product liability matters (except in cases where such claims, suits,
actions, demands or judgments result from a willful material breach of this
Agreement, gross negligence or willful misconduct on the part of CURAGEN)
arising directly out of any actions of PIONEER in the performance of the R&D
Program or arising out of the development, testing, production, manufacture,
promotion, import, sale or use by any person of any Licensed Product
manufactured or sold by PIONEER or by an Affiliate, Agent, licensee,
sublicensee, distributor or agent of PIONEER.
11.2 Indemnification of PIONEER by CURAGEN.
-------------------------------------
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CURAGEN shall indemnify, defend and hold harmless PIONEER, its
Affiliates, Agents and their respective directors, officers, employees, and
agents and their respective successors, heirs and assigns (the "PIONEER
Indemnitees"), against any liability, damage, loss or expense (including
reasonable attorneys' fees and expenses of litigation) incurred by or imposed
upon the PIONEER Indemnitees, or any one of them, in connection with any claims,
suits, actions, demands or judgments of third parties, (except in cases where
such claims, suits, actions, demands or judgments result from a willful material
breach of this Agreement, gross negligence or willful misconduct on the part of
PIONEER), arising directly out of any actions of CURAGEN in the performance of
the R&D Program.
12. DISPUTE RESOLUTION
------------------
12.1 Senior Officials.
----------------
The parties recognize that a bona fide dispute as to certain matters
may from time to time arise during the term of this Agreement which relates to
either party's rights and/or obligations hereunder. In the event of the
occurrence of such a dispute, either party may, by notice to the other party,
have such dispute referred to their respective senior officials designated as
set forth below or their successors, for attempted resolution by good faith
negotiations within thirty (30) days after such notice is received. Said senior
officials shall be designated by the parties upon execution of this Agreement.
12.2 Formal Dispute Resolution.
-------------------------
12.2.1 General.
-------
In the event of any dispute, difference or question arising between
the parties in connection with this Agreement, the construction thereof, or the
rights, duties or liabilities of either party, and which dispute cannot be
amicably resolved by the good faith efforts of the persons designated under
Section 12.1, then such dispute shall (i) be resolved by non-binding mediation
conducted in the manner set forth in Section 12.2.2, and (ii) in the event that
such dispute is not amicably resolved by such non-binding mediation, it may be
resolved by a lawsuit filed in a court of competent jurisdiction.
40
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12.2.2 Mediation.
---------
In the event of the occurrence of a dispute which cannot be amicably
resolved by the good faith efforts of the persons designated under Section 12.1,
either party may, by notice to the other party, commence a non-binding mediation
to resolve such dispute by providing written notice to the other party, which
notice (a "Mediation Notice") shall inform the other party of such dispute and
the issues to be resolved and shall contain a list of five (5) recommended
individuals to serve as the mediator. Within ten (10) business days after the
receipt of such Mediation Notice, the other party shall respond by written
notice to the party initiating mediation, which notice shall contain a list of
five (5) recommended individuals to serve as the mediator and which may add
additional issues to be resolved. The recommended mediators shall be individuals
with experience in the biotechnology and/or agriculture industry and shall not
be an employee, director, shareholder or agent of either party or of an
Affiliate or subsidiary of either party, or otherwise involved (whether by
contract or otherwise) in the affairs of either party. If, within twenty (20)
business days after receipt of such Mediation Notice, the parties shall have
been unable to mutually agree upon an individual to serve as a mediator, then
such dispute may be settled by lawsuit. If, within twenty (20) business days
after receipt of such Mediation Notice, the parties shall have mutually agreed
upon an individual to serve as a mediator, then the mediator shall conduct a
mediation in an effort to resolve such dispute as follows:
(a) Within thirty (30) business days after selection, the
mediator shall hold a hearing to resolve each of the issues identified by the
parties. Each party shall be represented at the hearing by up to two (2)
employees of such party, one of whom is an officer of such party, and may be
represented by counsel. The hearing shall be held in a mutually agreeable
location. No discovery will be conducted, unless the parties otherwise mutually
agree.
(b) At least ten (10) business days prior to the date set for
the hearing, each party shall submit to the other party and the mediator a
proposed ruling on each issue to be resolved, which writing (A) may, in addition
to containing the proposed rulings, contain arguments or analyses of the facts
or issues and (B) shall be limited to not more than twenty (20) pages.
(c) Each party shall be entitled to no more than three (3)
hours of hearing time to present oral testimony. The oral testimony of both
parties shall be presented during the same calendar day. Such time limitation
shall include any direct, cross or rebuttal testimony, but such time limitation
shall only be charged against the party conducting such direct, cross or
rebuttal
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testimony. It shall be the responsibility of the mediator to determine whether
the parties have had the presentation time to which they are entitled.
(d) At the hearing, the mediator shall attempt to resolve each
issue in dispute between the parties. If the mediator shall be unable to resolve
any issue, the mediator shall provide the parties with the mediator's non-
binding ruling on each such issue. The mediator shall, in rendering his
decision, apply the substantive law of the State of Delaware, without giving
effect to its principles of conflicts of law, and without giving effect to any
rules or laws relating to arbitration.
(e) If the mediator has not been able to resolve each issue,
each issue remaining in dispute may be settled by lawsuit. At any subsequent
legal proceeding, neither any rulings of the mediator, any admissions or
settlement offers made by any party at the mediation nor any other information
disclosed at the mediation may be introduced into evidence. The mediation
proceeding shall be confidential. Except as required by law, regulation or
judicial order, no party shall make (or instruct the mediator to make) any
public announcement with respect to the proceedings or rulings of the mediator
without the prior written consent of each other party. The existence of any
dispute submitted to mediation, and the rulings of the mediator, shall be kept
in confidence by the parties and the mediator, except as required by applicable
law, regulation or judicial order.
(f) Each party shall pay its own costs (including, without
limitation, attorneys fees) and expenses in connection with such mediation. The
fees and expenses of the mediator shall be shared equally by the parties.
13. MISCELLANEOUS
-------------
13.1 Payment Method.
--------------
Each payment to CURAGEN under this Agreement shall be paid by PIONEER
in U.S. currency by wire transfer of funds to an account of CURAGEN in
accordance with instructions provided by CURAGEN.
13.2 Notices.
-------
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All notices shall be in writing mailed via certified mail, return
receipt requested, courier providing evidence of delivery, addressed as follows,
or to such other address as may be designated by notice so given from time to
time:
If to PIONEER: PIONEER HI-BRED INTERNATIONAL, INC.
0000 XX 00xx Xxxxxx
Xxxxxxx, Xxxx 00000-0000
Attention: Director, Research Technology
Services
With a copy to: PIONEER HI-BRED INTERNATIONAL, INC.
000 Xxxxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
If to CURAGEN: CURAGEN CORPORATION
000 Xxxx Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Executive Vice President
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to the RDSC: To the Chair and Co-Chair at their respective
addresses furnished in writing to the parties
If to the Patent
Coordinators: To the two Patent Coordinators at their
respective addresses furnished in writing to
the parties
Notices shall be deemed given as of the date received.
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13.3 Governing Law and Jurisdiction.
------------------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut, U.S.A., without regard to the application
of principles of conflicts of law.
13.4 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.
13.5 Headings.
--------
Section and subsection headings are inserted for convenience of
reference only and do not form a part of this Agreement.
13.6 Counterparts.
------------
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
13.7 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.
13.8 No Third Party Beneficiaries.
----------------------------
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Except as set forth in Section 10, no third party, including any
employee of any party to this Agreement, shall have or acquire any rights by
reason of this Agreement.
13.9 No Agency or Partnership.
------------------------
Nothing contained in this Agreement shall give either party the right
to bind the other, or be deemed to constitute the parties as agents for the
other or as partners with each other or any third party.
13.10 Assignment and Successors.
-------------------------
This Agreement may not be assigned by either party without the
consent of the other, which shall not be unreasonably withheld, except that each
party may, without such consent, assign this Agreement and the rights,
obligations and interests of such party, in whole or in part, to any of its
Affiliates, to any purchaser of all or substantially all of its assets in the
line of business to which this Agreement pertains or to any successor
corporation resulting from any merger or consolidation of such party with or
into such corporations.
13.11 Force Majeure.
-------------
Neither PIONEER nor CURAGEN 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 beyond the reasonable control of PIONEER or CURAGEN. In
event of such force majeure, the party affected thereby shall use reasonable
efforts to cure or overcome the same and resume performance of its obligations
hereunder.
13.12 Interpretation.
--------------
The parties hereto acknowledge and agree that: (i) each party and its
counsel reviewed and negotiated the terms and provisions of this Agreement and
have contributed to its revision; (ii) the rule of construction to the effect
that any ambiguities are resolved against the drafting party shall not be
employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all parties hereto
and not in a favor of
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or against any party, regardless of which party was generally responsible for
the preparation of this Agreement.
13.13 Integration: Severability.
-------------------------
This Agreement is the sole agreement with respect to the subject
matter hereof and supersedes all other agreements and understandings between the
parties with respect to same, including but not limited to the Confidentiality
Agreement between CURAGEN and PIONEER dated October 3, 1996 (the "Superseded
Confidentiality Agreement"). 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 this
Agreement shall not be affected.
13.14 Export Controls.
---------------
This Agreement is made subject to any restrictions concerning the
export of Licensed Products or Research Results or Proprietary Intellectual
Property ("Technology") from the United States which may be imposed upon or
related to either party to this Agreement from time to time by the Government of
the United States. Neither party will export, directly or indirectly, any
Technology or any Licensed Products utilizing such Technology to any countries
for which the United States Government or any agency thereof at the time of
export requires an export license or other governmental approval, without first
obtaining the written consent to do so from the Department of Commerce or other
agency of the United States Government when required by applicable statute or
regulation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed this 16th day of May, 1997 by their duly authorized representatives.
PIONEER HI-BRED INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
----------------------------------
Title: Vice President
---------------------------------
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CURAGEN CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Title: Chairman and Chief Executive Officer
------------------------------------
47
