Exhibit 10.11
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CuraGen Corporation has omitted from this Exhibit 10.11 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.
Agreement No.95-0191
OPTION AND EXCLUSIVE LICENSE AGREEMENT
--------------------------------------
This Agreement is made effective the 4th day of October, 1996, by and
between Wisconsin Alumni Research Foundation (hereinafter called "XXXX"), a
nonstock, nonprofit Wisconsin corporation, and CuraGen Corporation (hereinafter
called "CuraGen"), a corporation organized and existing under the laws of
Delaware;
WHEREAS, XXXX owns certain inventions that are described in the "Licensed
Patents" defined below, and XXXX is willing to grant a license to CuraGen under
any one or all of the Licensed Patents and CuraGen desires a license under all
of them;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the parties covenant and agree as follows:
Section 1. Definitions.
-----------
For the purpose of this Agreement, the Appendix A definitions shall apply.
Section 2. Grant.
-----
A. Option.
------
(i) XXXX hereby grants to Curagen and its Affiliates an option
to obtain set out in this Agreement in the Licensed Field and Licensed Territory
under the option shall expire on October 4, 1999.
(ii) In order to exercise its option under this Section 2A,
CuraGen must not XXXX in writing, prior to the expiration of the option, that
CuraGen is exercising its option and include with such notification a
development plan and the License Fee due under Section 3 C. Upon such exercise
of the option, the license granted under Section 2B will become effective.
B. License.
-------
Upon CuraGen's exercise of the option in Section 2A, XXXX will hereby grant
to CuraGen an exclusive license, limited to the Licensed Field and the Licensed
Territory, under the Licensed Patents to make, have made, use, sell, offer for
sale, and import Products.
C. Sublicenses.
-----------
(i) Upon CuraGen's exercise of the option in Section 2A,
CuraGen may grant written, nonexclusive sublicenses to third parties. Any
agreement granting a sublicense shall state that the sublicense is subject to
the termination of this Agreement. CuraGen shall have the same responsibility
for the activities of any sublicensee as if the activities were directly those
of CuraGen.
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(ii) In respect to sublicenses granted by CuraGen under this
Section 2C, CuraGen shall pay to XXXX an amount equal to what CuraGen would have
been required to pay to XXXX had CuraGen sold the amount of Products sold by
such sublicensee.
Section 3. Consideration.
--------------
A. Development.
------------
Upon CuraGen's exercise of the option in Section 2A, CuraGen agrees to use
diligent efforts in the exercise of its reasonable business judgment to develop,
produce and market Products, and to pursue the development plan set forth in the
Xxxxx Chart submitted by CuraGen upon exercise of the option in Section 2A, and
thereafter will provide XXXX with an annual letter describing the progress made
therein. XXXX agrees to keep such letter confidential pursuant to Section 13.
B. Option Fee.
-----------
CuraGen agrees to pay to XXXX an option fee of [XXXXXX] upon execution of
this Agreement. Such option fee will be credited against the license fee due
under Section 3C upon exercise of the option.
C. License Fee.
------------
Upon exercise of its option granted in Section 2A, CuraGen agrees to pay to
XXXX a license fee of [XXXXXXX].
D. Royalty.
--------
If CuraGen exercises its option in Section 2A, in addition to the Section
3C license fee, CuraGen or its sublicensee(s) agree to pay to XXXX as "earned
royalties" a royalty calculated as a percentage of the Selling Price of Products
made, used or sold by CuraGen and its Affiliates or its sublicensee(s) in the
United States subject however to any credits permitted hereunder. If the Product
is made and sold outside the United States, no royalties shall be payable on
such Products. The royalty is deemed earned as of the date the Product is
actually sold and paid for. The royalty shall remain fixed while this Agreement
is in effect at a rate of [XXXXXXXXXXXXXXXXXXXXX] of the Selling Price.
E. Minimum Royalty.
----------------
CuraGen further agrees to pay to XXXX a minimum royalty for each calendar
year or part thereof during which this Agreement is in effect, starting in the
third calendar year after exercise of the option, against which any earned
royalty paid for the same calendar year will be credited. The minimum royalty
shall be [XXXXXX] per calendar year. The minimum royalty for a given year shall
be due at the time payments are due for the calendar quarter ending on December
31. It is understood that the minimum royalties will apply on a calendar year
basis, and that sales of Products requiring the payment of earned royalties made
during a prior or subsequent calendar year shall have no effect on the annual
minimum royalty due XXXX for any given calendar year.
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[Confidential treatment requested]
F. Accounting: Payments.
--------------------
(i) Amounts owing to XXXX under Sections 2C and 3D shall be
paid on a quarterly basis, with such amounts due and received by XXXX on or
before the sixtieth day following the end of the calendar quarter ending on
March 31, June 30, September 30 or December 31 in which such amounts were
earned. The balance of any amounts which remain unpaid more than sixty (60)days
after they are due to XXXX shall accrue interest until paid at the rate of the
lesser of one percent (1%) per month or the maximum amount allowed under
applicable law. However, in no event shall this interest provision be construed
as a grant of permission for any payment delays.
(ii) Except as otherwise directed, all amounts owing to XXXX
under this Agreement shall be paid in U.S. dollars to XXXX at the address
provided in Section 15(a). All royalties owing with respect to Selling Prices
stated in currencies other than U.S. dollars shall be converted at the rate
shown in the Federal Reserve Noon Valuation - Value of Foreign Currencies on the
day preceding the payment.
(iii) A full accounting showing how any amounts owing to XXXX
under Sections 2C and 3D have been calculated shall be submitted to XXXX on the
date of each such payment. Such accounting shall be on a per-country and product
line, model or tradename basis and shall be summarized on the form shown in
Appendix B of this Agreement. In the event no payment is owed to XXXX, a
statement setting forth that fact shall be supplied to XXXX.
Section 4. Certain Warranties of XXXX.
---------------------------
X. XXXX warrants that except as otherwise provided under Section 12
of this Agreement with respect to U.S. Government interests, it is the owner of
the Licensed Patents and has the right to grant the option and upon exercise of
such option the licenses granted to CuraGen in this Agreement. However, nothing
in this Agreement shall be construed as:
(i) a warranty or representation by XXXX as to the validity or
scope of any of Licensed Patents;
(ii) a warranty or representation that anything made, used, sold
or otherwise disposed of under the license granted in this Agreement will or
will not infringe patents of third parties; or
(iii) an obligation to bring or prosecute actions or suits
against third parties for infringement of Licensed Patents:
B. EXCEPT AS EXPRESSLY SET FORTH HEREIN, XXXX MAKES NO REPRESENTATIONS,
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES NO
RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY
CURAGEN, ITS SUBLICENSEES OR THEIR VENDEES OR OTHER TRANSFEREES OF PRODUCTS
INCORPORATING OR MADE BY USE OF INVENTIONS LICENSED UNDER THIS AGREEMENT.
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Section 5. Recordkeeping.
-------------
A. CuraGen and its sublicensee(s) shall keep books and records
sufficient to verify the accuracy and completeness of CuraGen's and its
sublicensee(s)'s accounting referred to above, including without limitation
inventory, purchase and invoice records relating to the Products or their
manufacture. Such books and records shall be preserved for a period not less
than five years after they are created during and after the term of this
Agreement.
B. CuraGen and its sublicensee(s) shall take all steps necessary so
that XXXX may within thirty days of its request review and copy all the books
and records at a single U.S. location to verify the accuracy of CuraGen's and
its sublicensee(s)'s accounting. Such review shall be made not more than once
each calendar year, upon reasonable notice and during regular business hours, at
the expense of XXXX by a Certified Public Accountant to whom CuraGen has no
reasonable objection.
C. If a royalty payment deficiency is determined, CuraGen or its sub
licensee(s) shall. pay the royalty deficiency outstanding within thirty (30)
days of receiving written notice thereof, plus interest on outstanding amounts
as described in Section 3F(i).
Section 6. Term and Termination.
--------------------
A. The term of this Agreement shall begin on the effective date of
this Agreement and continue until the expiration of the option granted in
Section 2A or, if the option is exercised, until the expiration of the last to
expire of the Licensed Patents.
B. CuraGen may terminate this Agreement at any time by giving at
least sixty (60) days' prior written and unambiguous notice of such termination
to XXXX.
C. In the event either party shall materially breach any of the
terms, conditions and agreements contained in this Agreement to be kept,
observed and performed by it, then the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal and equitable
rights and remedies, by giving the party who committed the breach sixty (60)
days notice in writing, particularly specifying the breach, unless the notified
party within such sixty (60) day period shall have rectified the breach.
D. Upon the termination of this Agreement, CuraGen shall remain
obligated to provide an accounting for and to pay royalties earned up to the
date of the termination and any minimum royalties shall be prorated as of the
date of termination by the number of days elapsed in the applicable calendar
year.
Section 7. Assignability.
-------------
This Agreement may not be transferred or assigned by either party without
the prior written consent of the other party, except that CuraGen may freely
assign this Agreement to an Affiliate or to an entity acquiring substantially
all of its business to which Products relate.
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Section 8. Enforcement.
------------
Upon CuraGen's exercise of the option in Section 2A, the following
provisions shall take effect.
A. In the event that either party believes there is infringement of
any Licensed Patent under this Agreement, the party shall provide the other
party with notification thereof. During the term of this Agreement, CuraGen
shall have the right, but not the obligation, to prosecute at its own expense
any such infringement of the Licensed Patents. Before filing any such legal
action against such infringement, CuraGen shall have obtained the opinion of
outside counsel that such infringement is occurring and shall have provided XXXX
with a copy of such opinion. If CuraGen elects to prosecute such infringement,
the total cost of any infringement action shall be borne by CuraGen and CuraGen
shall keep any recovery or damages for past infringement derived therefrom. XXXX
agrees to cooperate with CuraGen in connection with said action and shall have
the right to join in such action upon prompt notification to CuraGen.
B. If CuraGen is unwilling or: unable to bring a suit against any
alleged infringer, then, and in those events only, XXXX shall have the right,
but not the obligation, to prosecute at its own expense any infringement of the
Licensed Patents. If XXXX elects to prosecute any such infringement, the total
cost of any infringement action shall be borne by XXXX and XXXX shall keep any
recovery or damages for patent infringement derived therefrom.
Section 9. Patent Marking.
--------------
Upon CuraGen's exercise of the option in Section 2A, CuraGen shall insure
that it and its sublicensee(s) apply patent markings that meet all requirements
of U.S. law, 35 U.S.C. 287, with respect to all Products subject to this
Agreement.
Section 10. Product Liability Conduct of Business.
--------------------------------------
Upon CuraGen's exercise of the option in Section 2A, the following
provisions shall take effect.
A. CuraGen shall, at all times during the term of this Agreement and
thereafter, indemnify, defend and hold XXXX and the inventors of the Licensed
Patents harmless against all claims and expenses, including legal expenses and
reasonable attorneys fees, arising out of the death of or injury to any person
or persons or out of any damage to property and against any other claim,
proceeding, demand, expense and liability of any kind whatsoever (other than
patent infringement claims) resulting from the production, manufacture, sale,
use, lease, consumption or advertisement of Products arising from any right or
obligation of CuraGen or any sublicensee hereunder. Notwithstanding the above,
XXXX at all times reserves the right to retain counsel of its own to defend
XXXX'x interests.
B. CuraGen warrants that it now maintains and will continue to
maintain liability insurance coverage appropriate to the risk involved in
marketing the products subject to this Agreement and that such insurance
coverage lists XXXX and the inventors of the Licensed Patents as additional
insureds. Within ninety (90) days after CuraGen's exercise of the option in
Section 2A and thereafter annually between January 1 and January 31 of each
year, CuraGen will
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present evidence to XXXX that the coverage is being maintained with XXXX and its
inventors listed as additional insureds if the Licensed Product has an in vivo
effect. In addition, CuraGen shall provide XXXX with at least 30 days prior
written notice of any change in or cancellation of the insurance coverage.
Section 11. Use of Names.
-------------
CuraGen and its sublicensee(s) shall not use XXXX'x name, the name of any
inventor of inventions governed by this Agreement, or the name of the University
of Wisconsin in sales promotion, advertising, or any other form of publicity
without the prior written approval of the entity or person whose name is being
used. Notwithstanding the foregoing, CuraGen may state in written materials that
CuraGen has obtained an option or a license, as appropriate, from XXXX to the
technology which is the subject of this Agreement.
Section 12. United States Government Interests.
-----------------------------------
It is understood that if the United States Government (through any of its
agencies or otherwise) has funded research, during the course of or under which
any of the inventions of the Licensed Patents were conceived or made, the United
States Government is entitled, as a right, under the provisions of 35 U.S.C. (S)
200-212 and applicable regulations. of Chapter 3,7. of the Code of Federal
Regulations, to a nonexclusive'; nontransferable, `irrevocable paid-up license
to practice or have practiced the invention of such Licensed Patents for
governmental purposes. Any license granted to CuraGen in this Agreement shall be
subject to such right.
Section 13. Confidential Information.
-------------------------
The following provisions relate to restrictions on the disclosure and use
of Confidential Information by the parties:
A. Confidentiality. CuraGen and XXXX each agree to treat as
---------------
confidential and to use only in the conduct of its business, all Confidential
Information disclosed to it by the other party.
B. Non-Disclosure and Non-Use. CuraGen and XXXX each agrees not to
--------------------------
disclose any of the Confidential Information received from the other party to
any unauthorized third party and not to use any of the Confidential Information
except in the conduct of its business until the later of (a) five years from the
effective date of this Agreement; or (b) two years from the effective date of
termination.
C. Release from Restrictions. All information which is
-------------------------
characterized as Confidential Information shall cease to be confidential and
CuraGen and/or XXXX shall be released from their respective obligations under
Sections 13A and 13B hereof on the date when, through no fault or omission of
the party seeking such release, such information becomes (a) disclosed in
published literature; (b) generally available to industry; or (c) obtained by
the party seeking such release from a third party without binder of secrecy,
provided. however that such third party has no confidentiality obligations to
--------- -------
the other party.
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Section 14. Miscellaneous.
--------------
This Agreement shall be construed in accordance with the internal laws of
the State of Wisconsin. If any provisions of this Agreement are or shall come
into conflict with the laws or regulations of any jurisdiction or any
governmental entity having jurisdiction over the parties or this Agreement,
those provisions shall be deemed automatically deleted, if such deletion is
allowed by relevant law, and the remaining terms and conditions of this
Agreement shall remain in full force and effect. If such a deletion is not so
allowed or if such a deletion leaves terms thereby made clearly illogical or
inappropriate in effect, the parties agree to substitute new terms as similar in
effect to the present terms of this Agreement as may be allowed under the
applicable laws and regulations. The parties hereto are independent contractors
and not joint ventures or partners.
Section 15. Notices.
--------
Any notice required to be given pursuant to the provisions of this
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the time when actually received as a consequence of any effective
method of delivery, including but not limited to hand delivery, transmission by
telecopier, or delivery by a professional courier service or the time when sent
by certified or registered mail addressed to the party for whom intended at the
address below or at such changed address as the party shall have specified by
written notice, provided that any notice of change of address shall be effective
only upon actual receipt.
(a) Wisconsin Alumni Research Foundation
Attn: Managing Director
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
(b) CuraGen Corporation
Attn: Xxxxxxxx X. Xxxxxxxx, Ph.D.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Section 16. Integration.
-----------
This Agreement constitutes the full understanding between the parties with
reference to the subject matter hereof, and no statements or agreements by or
between the parties, whether orally or in writing, made prior to or at the
signing hereof, shall vary or modify the written terms of this Agreement.
Neither party shall claim any amendment, modification, or release from any
provisions of this Agreement by mutual agreement, acknowledgement, or otherwise,
unless such mutual agreement is in writing, signed by the other party, and
specifically states that it is an amendment to this Agreement.
Section 17. Benefits.
---------
All terms and provisions of this Agreement shall bind and inure to the
benefit of the parties hereto, and upon their respective successors and assigns
as those are permitted under the terms of this Agreement.
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Section 18. Contract Formation and Authority.
---------------------------------
The persons signing on behalf of XXXX and CuraGen hereby warrant and
represent that they have authority to execute this Agreement on behalf of the
party for whom they have signed.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the dates indicated below.
WISCONSIN ALUMNI RESEARCH FOUNDATION
/s/ Xxxxxxx X. Xxxxxx Date: November 13, 1996
----------------------
Xxxxxxx X. Xxxxxx, Managing Director
CURAGEN CORPORATION
/s/ Xxxxxxxx X. Xxxxxxxx Date: October 30, 1996
-------------------------
Xxxxxxxx X. Xxxxxxxx, President
Reviewed by XXXX'x Attorney:
/s/ Attorney Date: October 3, 1996
------------
(XXXX'x attorney shall not be deemed a signatory to this Agreement.)
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APPENDIX A
A. "Licensed Patents" shall refer to and mean [XXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXX], and reissues and extensions of such patent; and
United States and foreign patents granted thereon, and reissues and extensions
thereof.
B. "Affiliates" shall mean any corporation, company, partnership, joint
venture or other entity which controls, is controlled or under common control
with CuraGen or XXXX as the case may be. For the purposes of this definition,
control shall mean the direct or indirect ownership of at least fifty percent
(50%) or, if less than fifty percent (50%), the maximum percentage as allowed by
applicable law of (a) the stock shares entitled to vote for the election of
directors; or (b) ownership interest.
C. "Products" shall refer to and mean [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXX]. For the purposes of calculating the selling Price; "Products" shall
include [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].
D. "Selling Price" shall mean, in the case of Products that are sold, the
invoice price to the retail customer of Products (regardless of uncollectible
accounts) less any discounts, shipping costs, allowances because of returned
Products, or sales taxes. In the event of a sale to a previous purchaser of
Products of a component that incorporates the technology of the Licensed
Patents, the "Selling Price" will be the price of solely the component.
E. "Licensed Field" shall be limited to the field of [XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].
F. "Licensed Territory" shall be worldwide.
G. "Confidential Information" shall mean this Agreement, the Development
Plan and Development Reports, and any and all books, records, opinions of
counsel and business information required to be supplied to XXXX by CuraGen
under the terms of this Agreement.
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[Confidential treatment requested]
APPENDIX B
XXXX ROYALTY REPORT
-------------------
Licensee:_______________________________ Agreement No.___________________
INVENTOR:_______________________________ P#: P
-----------------------------
Period Covered: From: / 199 THROUGH: / / 199
-------------------- ------------------------
Prepared By:___________________________ DATE:__________________________
Approved By:___________________________ DATE:__________________________
If license covers several major product LINES, please prepare a separate
report for each line. Then combine all product lines into a summary report.
Report Type: [_] Single Product Line Report:
[_] Multiproduct Summary Report Page I of ______ PAGES
[_] Product Line Detail. Line:______TRADENAME:_______PAGE:______
Report Currency:[_] U.S. Dollars ID Other
==============================================================================
County Gross Less Net Royalty Period Royalty Amount
Sales Allowances Sales Rate This Year Last Year
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U.S.A.
------------------------------------------------------------------------------
Canada
------------------------------------------------------------------------------
Europe:
------
------------------------------------------------------------------------------
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------------------------------------------------------------------------------
------------------------------------------------------------------------------
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Japan
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Other:
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==============================================================================
TOTAL:
==============================================================================
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Total Royalty:_____________Conversion Rate: ____________ Royalty in U.S.
Dollars:_____________
The following royalty forecast is non-binding and for XXXX'x internal planning
purposes only
Royalty Forecast Under This Agreement: Next Quarter:______ Q2_____ Q3:______
Q4______:
--------------------------------------------------------------------------------
On a separate page, please indicate the reasons for returns or other
adjustments if significant.
Also note any unusual occurrences that affected royalty amounts during this
period.
To assist XXXX'x forecasting, please comment on any significant expected
trends in sales volume.
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