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EXHIBIT 10.36
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 506 of the Securities Act of 1933, as amended.
RESEARCH SERVICES AGREEMENT
XXX XXXXX AND COMPANY
AND
ARRAY BIOPHARMA, INC.
MARCH 22, 2000
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ...........................................................................................1
1.1 Array Alliance Manager ...............................................................................1
1.2 Array Confidential Information .......................................................................1
1.3 Array FTE ............................................................................................2
1.4 Array Process ........................................................................................2
1.5 Array Project Leader .................................................................................2
1.6 Array Technology .....................................................................................2
1.7 Associate Chemist ....................................................................................2
1.8 Calendar Quarter .....................................................................................2
1.9 Calendar Year ........................................................................................3
1.10 cGCP .................................................................................................3
1.11 cGLP .................................................................................................3
1.12 cGMP .................................................................. ..............................3
1.13 Chemistry Invention ..................................................................................3
1.14 FTE Rate .............................................................................................3
1.15 Lilly Chemistry Research Services Director ...........................................................3
1.16 Lilly Confidential Information .......................................................................3
1.17 Lilly Project Leader .................................................................................4
1.18 Project ..............................................................................................4
1.19 Project Rights .......................................................................................4
1.20 Project Services .....................................................................................4
1.21 Project Team .........................................................................................4
1.22 Senior Chemist .......................................................................................4
1.23 Target Family ........................................................................................4
1.24 Third Party ..........................................................................................4
1.25 Work Plan ............................................................................................5
ARTICLE 2 PROJECT SERVICES .....................................................................................5
2.1 Project Services and Other Services ..................................................................5
2.2 Conflicts of Interest ................................................................................5
2.3 Project Management; Meetings .........................................................................6
2.4 Commitment to Project Staffing .......................................................................6
2.5 Array Employees Assigned to Each Project .............................................................6
2.6 [ * ]................................................................................................8
2.7 Communication and Access to Array Employees ..........................................................8
2.8 Reports, Records and Project Rights Transfer .........................................................8
2.9 Project Diligence ....................................................................................9
2.10 Governing Authority of Projects .....................................................................10
2.11 Array's Alliance Management .........................................................................10
ARTICLE 3 CONSULTING SERVICES ..................................................................................10
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ARTICLE 4 PROJECT RESOURCES AND COSTS ..........................................................................11
4.1 Project Resources and Costs .........................................................................11
4.2 Subcontracting Project Services or Other Services ...................................................12
4.3 Training ............................................................................................13
ARTICLE 5 PROJECT OWNERSHIP, PROCEDURAL SAFEGUARDS AND SECURITY ................................................12
5.1 [ * ]...............................................................................................13
5.2 Safeguards to Protect Confidentiality and Project Rights Ownership ..................................15
5.3 Security ............................................................................................15
ARTICLE 6 RECORD-KEEPING AND AUDIT .............................................................................15
6.1 Records Retention; Maintenance of Project Records ...................................................15
6.2 Financial Audit .....................................................................................16
6.3 Scientific and Legal Audit ..........................................................................16
6.4 Quality Assurance and Security Audits; On-Site Lilly Personnel ......................................17
ARTICLE 7 CONFIDENTIALITY AND NON-USE ..........................................................................17
7.1 Disclosure of Agreement .............................................................................17
7.2 Array's Confidentiality Obligations .................................................................18
7.3 Lilly's Confidentiality Obligations .................................................................18
ARTICLE 8 TERM AND TERMINATION .................................................................................19
8.1 Term ................................................................................................19
8.2 Lilly Voluntary Termination .........................................................................19
8.3 Termination for Default .............................................................................21
8.4 Termination Due to Array Ownership Change ...........................................................21
8.5 Termination Due to Insolvency or Liquidation ........................................................21
8.6 Surviving Rights and Obligations ....................................................................21
ARTICLE 9 REPRESENTATIONS AND WARRANTIES .......................................................................22
9.1 Lilly's Authority to Perform Agreement ..............................................................22
9.2 Array's Authority to Perform Agreement ..............................................................22
9.3 No Debarment ........................................................................................22
9.4 Year 2000 ...........................................................................................23
ARTICLE 10 MUTUAL INDEMNIFICATION ..............................................................................23
10.1 Array's Right to Indemnification ....................................................................23
10.2 Lilly's Right to Indemnification ....................................................................23
10.3 Indemnification Notice and Defense Procedures .......................................................24
ARTICLE 11 MISCELLANEOUS .......................................................................................25
11.1 Further Assurances ..................................................................................25
11.2 No Agency; Independent Contractor ...................................................................25
11.3 Compliance with Laws " ..............................................................................25
11.4 Compliance with Work Plan and Lilly Protocols and Specifications ...................................25
11.5 Insurance ...........................................................................................26
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11.6 Amendment ........................................................................................26
11.7 Notices and Reports ..............................................................................26
11.8 Governing Law ....................................................................................26
11.9 Assignment .......................................................................................26
11.10 Headings .........................................................................................26
11.11 Severance of Clauses .............................................................................26
11.12 No Waiver ........................................................................................26
11.13 Entire Agreement .................................................................................27
11.14 Force Majeure ....................................................................................27
11.15 Counterparts .....................................................................................27
11.16 No Licenses ......................................................................................27
11.17 Jointly Prepared .................................................................................27
Schedule 1.25 Work Plan(s)
Exhibit A: Initial Press Release
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RESEARCH SERVICES AGREEMENT
THIS RESEARCH SERVICES AGREEMENT (the "Agreement") is made and entered into
effective as of March 22, 2000 (the "Effective Date"), by and between Xxx Xxxxx
and Company, Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX, 00000 ("Lilly"), and
Array BioPharma, Inc., 000000 x Xxxxxx, Xxxxxxx, XX, 00000 ("Array") (together
Lilly and Array, the "Parties").
RECITALS
WHEREAS, Lilly is engaged in the discovery, development, manufacturing and
marketing of pharmaceutical products; and
WHEREAS, Array provides research services in all aspects of chemistry, high
through-put screening, structural biology, and information management; and
WHEREAS, Lilly proposes to retain Array for the specific purpose of
providing chemical research, analysis, manufacturing of specialty chemical
products or related services that Array may offer.
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS
Terms defined in this Article I and parenthetically elsewhere shall have
the same meaning throughout this Agreement, including the recitals. Defined
terms may be used in the singular or plural.
1.1 "ARRAY ALLIANCE MANAGER" shall have the meaning set forth in Section
2.11.
1.2 "ARRAY CONFIDENTIAL INFORMATION" means (1) any and all Array Technology
and (2) any and all information, items, material or know-how (whether or not
patentable), except Project Rights and Array Processes, that is disclosed to
and/or received by Lilly from Array (whether orally, in writing, through
observation, or otherwise) during the term of this Agreement or prior to the
Effective Date, including, without limitation, any and all suggestions,
descriptions, ideas, inventions (whether or not patentable) discoveries,
know-how, trade secrets, techniques, data, strategies, methods, syntheses,
processes, practices, documents, apparatus, devices, chemical formulations,
chemical synthesis, compounds, composition of matter, chemical samples, assays,
cell lines, vectors, screens, databases, database structures, and data analysis
methods.
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Array Confidential Information shall not include any information that Lilly
can prove by competent evidence: (a) is now, or hereafter becomes, through no
act or failure to act on the part of Lilly, generally known or available; (b) is
known by Lilly at the time of receiving such information; (c) is hereafter
disclosed to Lilly by a Third Party, as a matter of right and without
restriction on disclosure; (d) is independently developed by Lilly without the
aid, application, or use of Array Confidential Information; (e) is the subject
of a written permission to disclose provided by Array; or (f) is required to be
disclosed by law, government agency, court order or valid discovery request in
connection with a legal proceeding
1.3 "ARRAY FTE" means a full time equivalent scientific person year
consisting of no less than a total of [ * ] of Project Services carried out by a
Lilly approved, Array employee who is either (except as the Parties may
otherwise agree in writing) (i) the Array Alliance Manager or (ii) an Array
Project Leader, Senior Chemist, or Associate Chemist exclusively assigned and
fully dedicated to Projects. Time spent by Array FTEs will qualify for
reimbursement under Subsection (a) of Section 4.1 only if it involves Project
Services on or directly related to a Project.
1.4 "ARRAY PROCESS" means a chemical method or process that Array owns or
has a right to license and that Array used, by its choice, in at least one
Project, but the term expressly excludes all high-speed synthesis technology and
methods of Array.
1.5 "ARRAY PROJECT LEADER" means an Array employee assigned to lead other
Array employees working on a particular Project who, unless otherwise agreed to
by the Parties in writing, has a Ph.D. in organic chemistry, at least [ * ] of
professional medicinal chemistry experience, and previous project leadership
experience. Each Array Project Leader shall be responsible for managing the
day-to-day activities of Array FTEs assigned to his/her particular Project to
achieve the Project's goals in accordance with the Work Plan. An Array Project
Leader is subordinate to a Project's Lilly Project Leader regarding all aspects
of such Project, and therefore, any disagreements between them regarding the
direction, priorities, goals or other aspects of the Project shall be resolved
ultimately by the Lilly Project Leader.
1.6 "ARRAY TECHNOLOGY" means Array inventions (whether or not patentable)
and Array know-how. Array Technology expressly excludes all Project Rights
regardless of Array's contribution to such Rights and, for purposes of this
Agreement, also expressly excludes Array Processes.
1.7 "ASSOCIATE CHEMIST" means an Array employee who has at least a Masters
Degree in organic chemistry or its equivalent (i.e., a Bachelor Degree in
organic chemistry with several years of chemistry experience), but who is
neither an Array Project Leader, nor a Senior Chemist, nor the Array Alliance
Manager.
1.8 "CALENDAR QUARTER" means a three-month period ending on March 3 1, June
30, September 30, or December 31.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.9 "CALENDAR YEAR" means the twelve-month period ending on December 31.
1.10 "cGCP" means the then-current Good Clinical Practice Standards
promulgated or endorsed by the FDA (or in the case of foreign jurisdictions,
comparable regulatory standards), including those regulations or guidelines
expressed or implied in the regulatory filings made with respect to a particular
compound or product at issue with the FDA or foreign regulatory agents.
1.11 "cGLP" means the then-current Good Laboratory Practices promulgated or
endorsed by the FDA (or in the case of foreign jurisdictions, comparable
regulatory standards), including those procedures expressed or implied in the
regulatory filings made with respect to a particular compound or product at
issue with the FDA or foreign regulatory agents.
1.12 "cGNIP" means current Good Manufacturing Practices as defined in the
U.S. regulations 21 CFR Section 210 et seq., and the EEC Guide to Good
Manufacturing Practices for Medicinal Products (Vol. IV Rules Governing
Medicinal Products in the European Community 1992).
1.13 "CHEMISTRY INVENTION" means a [ * ] that is conceived and invented by
Array (by itself or jointly with Lilly) as a direct or indirect result of
performing Project Services or Other Services.
1.14 "FTE RATE" means [ * ] (12) month period ending December 31, 2000. The
FTE Rate for any Calendar Year after December 31, 2000 shall be adjusted
annually by Lilly in accordance with the annual percentage change in the
Consumer Price Index for all Urban Consumers as published by the United States
Department of Labor, Bureau of Labor Statistics.
1.15 "LILLY CHEMISTRY RESEARCH SERVICES DIRECTOR" means [ * ] (or his
successor as appointed by Lilly). As the Lilly Chemistry Research Services
Director, [ * ] (or his successor) will be responsible for, among other things,
(i) issuing Projects to Array, (ii) discontinuing Projects, (iii) reviewing
Array FTE rosters, (iv) informing Array of each Project's initial staffing
needs, (v) communicating changes in staffing levels, (vi) coordinating Lilly's
communications with Array, and (vii) facilitating the smooth operations of all
Projects.
1.16 "LILLY CONFIDENTIAL INFORMATION" means (1) any and all Project Rights
and (2) any and all other information, items, material or know-how (whether or
not patentable) that is disclosed to and/or received by Array from Lilly
(whether orally, in writing, through observation, or otherwise) during the term
of this Agreement or prior to the Effective Date, including, without limitation,
any and all suggestions, descriptions, ideas, inventions (whether or not
patentable) discoveries, know-how, trade secrets, techniques, data, strategies,
methods, syntheses, processes, practices, documents, apparatus, devices,
chemical formulations, chemical synthesis, compounds, composition of matter,
chemical samples, assays, cell lines, vectors, screens, databases, database
structures, and data analysis methods.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Lilly Confidential Information shall not include any information that Array
can prove by competent evidence: (a) is now, or hereafter becomes, through no
act or failure to act on the part of Array, generally known or available; (b) is
known by Array at the time of receiving such information; (c) is hereafter
disclosed to Array by a Third Party, as a matter of right and without
restriction on disclosure; (d) is independently developed by Array without the
aid, application, or use of Lilly Confidential Information; (e) is the subject
of a written permission to disclose provided by Lilly; or (f) is required to be
disclosed by law, government agency, court order or valid discovery request in
connection with a legal proceeding.
1.17 "LILLY PROJECT LEADER" means a Lilly employee assigned by Lilly to
lead a particular Project. Each Lilly Project Leader shall, with appropriate
input from Array, establish the direction, priorities, and goals of the Project
assigned to such Lilly Project Leader. However, the Lilly Project Leader shall
be the ultimate authority with respect to all issues and decisions pertaining to
such Project and as such, may at any time accept, reject, or modify any portion
of such Project or its Work Plan, except as specified in Section 2.10, to the
extent he or she deems appropriate.
1.18 "PROJECT" means a chemistry project for a specific biological target
submitted by Lilly and accepted by Array under the terms of this Agreement and
which is fully described in a Work Plan. "PROJECTS" means each and every Project
under the terms of this Agreement.
1.19 "PROJECT RIGHTS" shall have the meaning set forth in Subsection (a) of
Section 5.1.
1.20 "PROJECT SERVICES" shall have the meaning set forth in Section 2.1.
1.21 "PROJECT TEAM" means the Array FTEs who are assigned to and Lilly's
employees, independent contractors, and research collaboration partners who are
working on a particular Project.
1.22 "SENIOR CHEMIST" means an Array employee who has a Ph.D. in organic
chemistry and at least [ * ] of organic synthesis chemistry experience
subsequent to obtaining such Ph.D.
1.23 "TARGET FAMILY" means a group of targets related to each other by, for
example, [ * ]. Although the term is broader than a single target such as
"[ * ]" or "[ * ]", it is not as broad as "all [ * ]" or "all [ * ]". The
following non-comprehensive list contains examples of Target Families; [ * ],
and [ * ], [ * ] and [ * ].
1.24 "THIRD PARTY" means any person or organization, incorporated or
unincorporated, other than Array, Lilly, or an employee of Array or Lilly.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.25 "WORK PLAN" means the detailed plan established and submitted by Lilly
to Array for each Project that defines the parameters, scope, and deliverables
of such Project. Each Work Plan shall include, without limitation: (i) a
detailed plan for the Project at issue including specific milestones to be
accomplished throughout the Project; (ii) a determination of the Array FTEs
(including the composition thereof) reasonably necessary to carry out the
Project; and (iii) a designation by Lilly of whether the Project is a "[ * ],"
"[ * ]," or "[ * ]". It is anticipated that before finalizing a Work Plan the
Parties shall attempt to fully discuss and reach consensus regarding the
parameters, scope, deliverables, and other details of the Project described in
that Work Plan, but in the absence of such consensus, Lilly shall make the final
determination with respect to all issues and decisions related to a Project and
its Work Plan. All Work Plans shall be subsequently appended hereto as part of
SCHEDULE 1.25.
ARTICLE 2
PROJECT SERVICES
2.1 PROJECT SERVICES AND OTHER SERVICES. Lilly hereby retains Array to
perform, and Array hereby agrees to perform, for Projects usual and customary
chemistry services and related services in the areas of compound design,
synthesis, isolation, and purification, structure, confirmation, and composition
and purity determination, in accordance with the applicable Work Plans ("Project
Services"). Depending on the Project, Project Services may include, without
limitation, consulting and technical assistance, chemical synthesis (including,
without limitation, design and synthesis of organic compounds), routine
computational analysis customary to compound design, synthetic chemical
research, medicinal chemistry, compound identification and quantification,
compound physical chemical characterization, and compound purification.
From time to time, Lilly may request Array to provide for Projects
chemistry and other services that are not Project Services ("Other Services"),
but Lilly recognizes that Array has the option to provide Other Services on a
case-by-case basis. Other Services may include, without limitation, synthesis of
general use chemical libraries, process research & development, and large scale
compound preparation, but expressly excludes the consulting services described
in Article 3. [ * ]
2.2 CONFLICTS OF INTEREST. Lilly recognizes that Array provides research
services to Third Parties: therefore, at the time the Lilly Chemistry Research
Services Director proposes a Project, he or she will identify the Project's
target and Target Family. If a Project that Lilly desires to issue to Array
deals with the same target or Target Family as that of a project,
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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assignment, or task on which Array is working or has agreed to work for a Third
Party, Array shall immediately, but no later than five (5) business days after
Lilly's proposed issuance of the Project, notify Lilly in writing of this
potential conflict of interest. In such cases, the Project will be issued to
Array only by mutual consent of the Parties.
2.3 PROJECT MANAGEMENT; MEETINGS. Each project shall be conducted in
accordance with its Work Plan and under the overall direction and guidance of
the Array Project Leader and Lilly Project Leader assigned to it (the "Project
Steering Committee"), but subject to the Lilly Project Leader's ultimate
authority. Each Project Steering Committee shall hold meetings regularly, and
except as the Lilly Project Leader may reasonably determine otherwise, shall
hold such meetings weekly. Such meetings may be held in-person, via video
conference and/or teleconference, provided that at least quarterly the Project
Steering Committee shall meet in-person, unless they otherwise agree. The Lilly
Project Leader, after consultation with the Array Project Leader, will determine
in good faith whether individual members of the Project Team or other persons
should also be in attendance at a Project Steering Committee meeting; however,
for in-person Project Steering Committee meetings, the in-person attendance of
individuals other than the Project Steering Committee members will be required
only upon the mutual consent of the Parties. In-person, Project Steering
Committee meetings will alternate between Lilly's Indianapolis, Indiana
facilities and Array's Boulder, Colorado facilities, unless the Parties
otherwise agree. Each [ * ] with the attendance of its employees and consultants
at such meetings.
2.4 COMMITMENT TO PROJECT STAFFING. During the term of this Agreement,
Array hereby agrees to have at least the following number of Array FTEs
available for Projects:
[ * ]
If Lilly desires to increase the number of Array FTEs beyond [ * ], all
such increases must be mutually agreed upon by the Parties in writing. Array,
however, will notify Lilly in writing each Calendar Quarter as to: (i) how many
Array employees are then-currently available to serve as Array FTEs for
Projects; and (ii) its forecast of how many such persons will be available
during the next three Calendar Quarters.
2.5 ARRAY EMPLOYEES ASSIGNED TO EACH PROJECT. Critical to the ultimate
success of each Project is the quality, make-up, and continuity of Array
employees assigned thereto. To that end, the Parties hereby agree as follows:
(a) Qualifications and Make-Up. Array hereby agrees that Array employees
assigned to perform Project Services or Other Services shall have the
skills necessary to efficiently perform such services in a form and of
a quality suitable to Lilly.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Moreover, except as the Parties may otherwise agree in writing, Array
hereby agrees that each Array FTE shall consist only of Array employees that are
either: (i) the Array Alliance Manager or (ii) Array Project Leaders, Senior
Chemists, or Associate Chemists exclusively assigned and fully dedicated to
Projects. Moreover, except as the Parties may otherwise agree in writing, each
Project shall have at least one Array Project Leader and a ratio of Senior
Chemists to Associate Chemists no lower than as follows (the "Experience
Ratio"):
Type of Project Ratio - Senior/Associate
--------------- ------------------------
[ * ]
For purposes of calculating the Experience Ratio, an Array Project Leader,
to the extent he is actually conducting work on a particular Project, shall
count as a Senior Chemist.
[ * ]
(b) Continuity to Projects. Array hereby agrees that: (1) [ * ]. An Array
employee assigned to a Project as an Array FTE, however, will not be required to
continue work on Projects under the following circumstances:
(i) [ * ];
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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(ii) [ * ]
(iii) [ * ]
(iv) [ * ]
2.6 [ * ]
(c) Subsequent Increases in Array FTEs. If, after a reduction of Array
FTEs under this Section, Lilly requests additional Array FTEs, Array
agrees to use reasonable efforts to satisfy Lilly's requests up to
the [ * ] FTEs threshold in Section 2.4. Any increase in the number
of Array FTEs beyond such threshold must be mutually agreed upon by
the Parties in writing.
2.7 COMMUNICATION AND ACCESS TO ARRAY EMPLOYEES. In addition to the
meetings described in Section 2.3, during the term of the Agreement, Lilly shall
have reasonable and informal access to and communication and interaction with
Array employees assigned to each Project. It is anticipated that such access,
communication and interaction shall be similar to the access, communication, and
interaction that would occur between scientists in a fully integrated, drug
discovery project team effort. Furthermore, upon Lilly's request, Array shall
interact and communicate with Lilly regarding any issue raised by Lilly about a
Project as soon as reasonably practical.
2.8 REPORTS, RECORDS AND PROJECT RIGHTS TRANSFER. Array will provide to
Lilly the following reports and records:
(a) Quarterly Status Reports. For each Project, Array shall provide the
applicable Lilly Project Leader with a quarterly status report that
summarizes Array's efforts on such Project during the Calendar
Quarter at issue and that includes, without limitation, a general
summary of important events and/or milestones achieved, personnel
changes (if any), learning points and other matters that Lilly may
reasonably deem appropriate, and a general description of Project
Rights (if any) discovered, invented, developed and/or conceived. The
Lilly Project Leader of each Project, with appropriate consultation
from the Array Project Leader assigned thereto, shall determine the
appropriate format of the quarterly status report for his or her
Project. In addition to the foregoing, each quarterly status report
shall include for each compound discovered or made
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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during the Calendar Quarter at issue: (i) the structure of such
compound; (ii) the name of the discover/maker of such compound; (iii)
the date such compound was discovered or made; (iv) the list of
analytical methods for which data was obtained on such compound [ * ]
and (v) the quantity of such compound made.
(b) Project Reports. For each Project, Array will provide the applicable
Lilly Project Leader a report fully summarizing the results and
experimental procedures of the Project and include, without
limitation, a description of all Project Rights, compound structures,
analytical data, physical chemical characterization data, compound
numbers, lot numbers, names of compound (including the name of the
person who prepared such compound), dates when compounds were
prepared, full details of synthesis methods (especially new methods or
modifications and new applications of existing methods), compound
purification conditions and protocols, chemical reaction schemes,
conditions, protocols, yields, certificate of analysis, other items
relevant to such Project, and such other matters as Lilly may
reasonably request. Array shall provide such a report within thirty
(30) days after the earlier of: (i) Lilly's written request, (11) the
completion or termination of a Project, or (iii) the termination or
expiration of this Agreement.
(c) Records. Array will provide the applicable Lilly Project Leader copies
of all experimental and other Project records and laboratory notebooks
containing experimental descriptions and data generated from work
conducted under a Project within thirty (30) days after the earlier
of: (i) Lilly's written request, (ii) the completion or termination of
a Project, or (iii) the termination or expiration of this Agreement.
(d) Project Rights & Other Lilly Confidential Information. To the extent
not already transferred to Lilly in accordance with Subsection (b) of
Section 5.1 or otherwise under this Agreement, Array shall disclose
and transfer ownership to Lilly [ * ], within thirty (30) days of the
earlier of: (i) Lilly's written request, (ii) the completion or
termination of a particular Project, or (iii) the termination or
expiration of this Agreement.
2.9 PROJECT DILIGENCE. Array shall diligently use its best efforts to
render Project Services and Other Services hereunder in accordance with
prevailing high professional standards and will make all reasonable efforts to
produce consistently high levels of accuracy and expertise
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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and to meet timetables set forth under this Agreement for completion of Project
Services and Other Services.
2.10 GOVERNING AUTHORITY OF PROJECTS. Each Project shall be conducted by
its Project Team in accordance with its Work Plan and under the overall
directions and guidance of its Project Steering Committee, [ * ].
2.11 ARRAY'S ALLIANCE MANAGEMENT. Array hereby designates Xxxxx Xxxx, Ph.D.
(and any successor President/Chief Science Officer) as the Array officer who is
ultimately responsible for ensuring its performance under this Agreement. Array
also agrees to designate, with Lilly's prior written approval, an Array employee
to oversee Array's day-to-day activities on all Projects, to coordinate Array's
communications with Lilly, and to otherwise facilitate the smooth operations of
all Projects (the "Array Alliance Manager"). Along with his other
responsibilities for this Agreement, the Parties agree that Xx. Xxxx will serve
as the interim Array Alliance Manager until a successor Array Alliance Manager
is appointed in accordance with this Section. However, notwithstanding Section
1.2 and Subsection (a) of Section 2.5, Array is not entitled to any compensation
from Lilly for Xx. Xxxx'x work as the interim Array Alliance Manager.
ARTICLE 3
CONSULTING SERVICES
Array employees who, as reasonably determined by a Lilly Project Leader
after consultation with the Array Project Leader, possess useful technical
expertise to a Project but who are not assigned to that Project shall be made
available at such times as Lilly reasonably requests for technical consultations
with Lilly personnel via telephone or in-person. Such Array employees may
include, without limitation, senior management of Array. In the event that such
consultation is in the form of an in-person consultation, the time and location
of such consultation shall be mutually agreed upon by the Parties in good faith
[ * ].
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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ARTICLE 4
PROJECT RESOURCES AND COSTS
4.1 PROJECT RESOURCES AND COSTS.
(a) FTE Funding and Reimbursement of Other Costs. [ * ] In addition, in
the event that (i) Other Services are used by Array in accordance with
Section 2. 1, (ii) Third Parties are used by Array in accordance with
Section 4.2, or (iii) Array incurs reimbursable expenses under
Subsection (e) of this Section 4. 1, Lilly shall reimburse Array for
only the incremental actual costs incurred by Array for such services
or items (i.e., no xxxx-up) and not according to the FTE Rate.
(b) Invoice. Within thirty (30) days [ * ], Array shall provide the Lilly
Chemistry Research Services Director with an invoice detailing: (i)
the name, number, and title of each Array FTE performing Project
Services during the preceding [ * ]; (ii) the total Project Service
hours worked by each Array FTE during the preceding [ * ]; (iii) the
Project Service hours worked on each Project during the preceding
[ * ]; (iv) the number of Project Services hours that were United
States-based; (v) the Other Services performed by Array during the
preceding [ * ] (if any); (vi) the permitted Third Parties' services
used by Array during the preceding [ * ] (if any); and (vii) the
actual costs incurred by Array during the preceding [ * ] for items
reimbursable under Subsection (e) of this Section 4.1 (if any).
Array's invoice for the last [ * ] in a Calendar Year will also
contain sufficient information and documentation to calculate the year
end Array FTE true-up, if any, under Subsection (d) of this Section.
Lilly, or its representatives, shall have the right to audit Array
records with respect to any invoice in accordance with Section 6.2.
(c) Project Payments. [ * ]
(d) Year End Array FTE True-Up. If:
(i) an Array FTE [ * ];
(ii) Lilly, under Subsection (a) of this Section, paid a pro-rated FTE
Rate for that Array FTE's reduced work hours during that [ * ];
and
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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(iii) that Array FTE worked [ * ] on Project Services in another month
during the Calendar Year,
Lilly, to the extent of such excess hours, will pay Array the
difference between the pro-rated amount it paid Array for the Array
FTE's reduced hours month and [ * ] of the FTE Rate. Lilly's payment
of such amount, if any, will accompany Lilly's payment made under
Subsection (c) of this Section for the last month in a Calendar Year.
An Array FTE's excess hours do not carry over to the next Calendar
Year nor are they applicable to another Array FTE.
(e) Equipment, Supplies, and Reasonable Capital Expenditures. Except for
non-commodity chemicals or except as the Parties otherwise agree in
writing, the Parties acknowledge and agree that Array is solely
responsible for the cost of all equipment, supplies, commodity
chemicals (e.g., chemicals that are readily available in bulk
quantities and obtainable from multiple suppliers and whose cost is
generally considered relatively low, fairly well-defined, and
consistent across the chemical supply industry), solvents, reagents,
materials, and reasonable capital items that Array uses (or is
required to use) in connection with the Projects. Lilly agrees to
reimburse Array for its purchases of non-commodity chemicals that are
necessary for a Project, but only if Lilly pre-approved such purchase
in writing.
When Lilly reimburses Array for necessary and pre-approved
non-commodity chemicals or in the event, Lilly, in its sole
discretion, supplies, leases, or purchases (or reimburses Array for)
any equipment, supplies, commodity chemicals, non-commodity chemicals,
solvents, reagents, materials, or other capital items in connection
with Array's efforts on a Project, Lilly shall be the sole owner of
such item, and, Array shall, to the extent not already done so,
transfer sole ownership in such item to Lilly and deliver possession
of such item to Lilly at the earlier of: (i) the completion or
termination of the Project at issue, (ii) Lilly's request, or (iii)
the termination or expiration of this Agreement. In certain cases
(e.g., Lilly determines that the item might be useful in another
Project), Lilly may reasonably delay transfer of ownership and/or
possession of such item by notifying Array of the same.
(f) Research Tax Credits. To the extent permitted by law, Lilly shall be
entitled to any tax credits due on account of research and development
expenses it pays to Array under this Agreement.
4.2 SUBCONTRACTING PROJECT SERVICES OR OTHER SERVICES. The Parties
acknowledge and agree that subcontracting (including, without limitation, any
consultation by Third Parties) of Project Services or Other Services by Array is
generally prohibited under this Agreement. However, Array may subcontract
Project Services or Other Services if, prior to such subcontract:
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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(i) The Lilly Chemistry Research Services Director approves, in
writing, that such subcontract would be useful or beneficial
to a Project and that the selected Third Party is an
appropriate subcontractor for the particular Project Services
or Other Services at issue;
(ii) The Lilly Chemistry Research Services Director approves, in
writing, the cost associated therewith;
(iii) Array and/or Lilly, as appropriate, obtain written
confidentiality and nonuse agreements from the Third Party;
(iv) Array and/or Lilly, as appropriate, obtain written assignments
from the Third Party of all patent rights and know-how that
such Third Party may develop by reason of work performed under
this Agreement (which, in turn, shall ultimately be assigned
to Lilly in accordance with Section 5.1); and
(v) Array and/or Lilly, as appropriate, obtain a certification
from the Third Party that such work will be performed
according to cGLPs, cGCPs and/or cGMPs, as applicable.
To be reimbursed for the incremental actual costs incurred from such approved
Third Parties' services, Array shall provide Lilly with all documentation of
such costs as Lilly may reasonably require. The foregoing prohibition is
intended to apply only to Array's ability to subcontract Project Services or
Other Services and is not intended to limit Lilly's ability to subcontract in
any respect.
4.3 TRAINING. Except as the Parties otherwise agree in writing, the
Parties acknowledge and agree that Array is solely responsible for providing and
paying for training, including attendance at scientific meetings, as may be
necessary for its employees and permitted subcontractors to perform their duties
under this Agreement.
ARTICLE 5
PROJECT OWNERSHIP, PROCEDURAL SAFEGUARDS AND SECURITY
5.1 [ * ]
(a) [ * ]. Lilly shall be [ * ] information, items, material, and
know-how that is either (i) [ * ] Project Services or Other
Services, including, without limitation, any and all
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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suggestions, descriptions, ideas, inventions (whether or not
patentable) discoveries, know-how, trade secrets, techniques, data,
strategies, methods, syntheses, processes, practices, documents,
apparatus, devices, chemical formulations, chemical synthesis,
compounds, composition of matter, chemical samples, assays, cell
lines, vectors, screens, databases, database structures, and data
analysis methods (collectively, "[ * ]").
(b) [ * ], after the conception, discovery, invention and/or development
of Project Rights, shall (and shall cause its employees, permitted
subcontractors, and other agents providing Project Services or Other
Services hereunder to) [ * ] in completing any patent applications
relating to such [ * ], as well as executing and delivering any
instrument that may be reasonably required to assign, convey and
[ * ] interest, if any, that Array or its employees, permitted
subcontractors, and other agents providing Project Services or Other
Services hereunder may have in such [ * ].
Moreover, after the [ * ] (and shall cause its employees, permitted
subcontractors, and other agents providing Project Services or Other
Services to) [ * ], items, material, and know-how encompassed in
[ * ] together with any other information, items, material, and
know-how [ * ]. Finally, [ * ] with reasonable technical assistance
in connection with such disclosure and transfer of [ * ].
(c) [ * ]. Pursuant to Subsection (a) above, Lilly has exclusive rights
to [ * ]. Array shall have the right to practice a [ * ] for
purposes other than a Project [ * ].
(d) Non-Exclusive License to [ * ]. Array hereby grants to Lilly [ * ]
to practice [ * ]. [ * ] only to Third Parties that are involved
with Lilly in research and development collaborations, and such
sublicenses shall be only for the purpose of carrying out such
collaborations. Lilly shall not have any other sublicense rights.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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5.2 SAFEGUARDS TO PROTECT CONFIDENTIALITY AND PROJECT RIGHTS OWNERSHIP.
(a) As a means reasonably designed to protect Lilly's sole ownership
rights in [ * ] and otherwise to ensure Array's compliance with its
obligations set forth in Section 5.1 and Section 7.2, Array agrees
[ * ]. In addition, Array agrees that [ * ]. Array's obligations
under this Subsection shall survive until [ * ] after the expiration
or termination date of this Agreement.
(b) Array hereby agrees that, each of its employees and permitted
subcontractors will, prior to commencing work on any Project,
execute an instrument agreeing to: (i) assign to Array all [ * ]
arising during the course of and as a result of their association
with Array (which shall ultimately be assigned by Array to Lilly in
accordance with the assignment provisions of Subsection (b) of
Section 5.1); and (ii) to abide by confidentiality and non-use
restrictions regarding the terms of the Agreement and Lilly
Confidential Information in a manner consistent with Array's
obligations under Section 7.1 and Section 7.2.
5.3 SECURITY. As a means reasonably designed to protect Lilly's sole
ownership rights in [ * ], to protect the secrecy and confidentiality of all
[ * ] and other Lilly Confidential Information, and to otherwise ensure Array's
compliance with its obligations set forth in Section 5.1 and Section 7.2, Array
agrees to maintain appropriate security measures no less stringent than measures
that are customary in the industry. In addition to customary security measures,
Array shall: (i) conduct all [ * ] and Other Services in a facility or
facilities solely dedicated and exclusively used for Projects; and (ii) maintain
informational technology systems that are compatible with Lilly's informational
technology systems and that ensure confidential communications and data
transfers between Array and Lilly.
ARTICLE 6
RECORD-KEEPING AND AUDIT
6.1 RECORDS RETENTION; MAINTENANCE OF PROJECT RECORDS. In addition to
providing copies of records and other Project Rights in accordance with Section
2.8, during the term of this Agreement and consistent with Array's security
obligations set forth in Section 5.3, Array shall retain and maintain all
written materials and all other data and information obtained or generated by
Array in the course of providing Project Services and Other Services in a secure
area
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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reasonably protected from fire, theft and destruction for up to ten (10) years
after the expiration or termination of this Agreement. Upon the expiration or
termination of this Agreement, such items, at Lilly's option, may be (i)
delivered to Lilly or its designee in such form as is then currently in the
possession of Array, (ii) retained by Array for Lilly for a period of time
mutually agreed upon by the Parties, or (iii) disposed of, at the direction and
written request of Lilly, unless such materials are otherwise required to be
stored or maintained by Array as a matter of law or regulation. In no event
shall Array dispose of any materials, data, or other information obtained or
generated by Array in the course of providing Project Services and Other
Services without first giving, Lilly sixty (60) days prior written notice of
Array's intent to do so.
For those records pertaining to the accuracy and correctness of an Array
invoice, such records shall be maintained for a three (3) year period following
the year in which such invoice was paid by Lilly.
Array shall keep complete and accurate records pertaining to each Project
that are reasonably useful to confirm the efforts. Array shall record all
information relating to Projects in written or electronic form. Such records
shall be kept separately from written records documenting other research and
development that may be conducted by Array. All such written records shall be
maintained in a form sufficient to satisfy regulatory authorities. Moreover,
from time to time, upon Lilly's request Array will promptly provide copies of
any of the records that it maintains for Lilly.
6.2 FINANCIAL AUDIT. Upon written notice from Lilly, Array shall permit
Lilly or Lilly's representative to have access during normal business hours to
audit the books and records of Array and its permitted subcontractors as may be
reasonably necessary to verify the accuracy of any payments made under this
Agreement. The audit shall be limited to books and records for any Calendar Year
ending not more than twenty-four (24) months prior to the date of such notice.
All reports, invoices and payments not disputed as to correctness by Lilly
within three (3) years after receipt thereof shall thereafter conclusively be
deemed correct for all purposes. Such audit shall be at Lilly's expense unless
the audit establishes that Lilly's payments for the period examined exceeded the
amount that should have been paid by five percent (5%) or more, in which case
Array shall be responsible for the reasonable expenses of such audit. Within
thirty (30) days after both Parties have received an audit report, Lilly or
Array, as appropriate, will compensate the other Party for any errors or
omissions revealed by an audit. This audit night shall survive for a period of
two (2) years from the date this Agreement terminates or expires.
6.3 SCIENTIFIC AND LEGAL AUDIT. Upon written notice from Lilly, Array
shall permit Lilly or Lilly's representative to have access during normal
business hours to audit the books and records of Array and its permitted
subcontractors as may be reasonably necessary to confirm that Project Services
and Other Services have been performed accurately and in compliance with (i)
prevailing professional standards of quality, (ii) applicable Lilly protocols
and/or specifications of which Array was reasonably advised, (iii) applicable
laws and regulations, and (iv) applicable Work Plans. Such an audit shall be at
Lilly's expense unless the audit establishes a material error by Array. In such
case, in addition to other remedies Lilly may have against Array for such
material error, Array shall be responsible for the reasonable expenses of the
audit. This audit
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right shall survive for a period of ten (10) years from the date this Agreement
terminates or expires.
6.4 QUALITY ASSURANCE AND SECURITY AUDITS; ON-SITE LILLY PERSONNEL.
During the term of this Agreement, Lilly retains the right at reasonable times
and upon reasonable prior written notice to conduct quality assurance and
security audits of Array's research and development facilities, as well as of
the facilities of Array's permitted subcontractors (if any), where work on a
Project is conducted. Furthermore, from time to time, upon Lilly's reasonable
written request, Array will allow Lilly personnel to be located at Array
facilities where Projects are conducted to further a particular Project as well
as to ensure that such facilities meet Lilly and regulatory authority standards
and the security standards set forth in Section 5.3. Array hereby agrees to
cooperate with Lilly and take such other acts as may be reasonably necessary or
appropriate to carry out the purpose and intent of this Section.
ARTICLE 7
CONFIDENTIALITY AND NON-USE
7.1 DISCLOSURE OF AGREEMENT.
(a) Existence of the Agreement. Except as the Parties otherwise agree,
neither Array nor Lilly shall release any information to any Third
Party with respect to the existence of this Agreement (including,
without limitation, either Party's name) until the Parties issue the
press release, which has been agreed to by both Parties and a copy
of which is attached as Exhibit A. Afterwards, each Party may use
the substance of such press release and the substance of other
public announcements of the other Party without prior notice.
(b) Terms of the Agreement. Except as required by law or except for a
request from an authorized representative of a U.S. and/or foreign
tax authority for a copy of the Agreement, neither Array nor Lilly
shall release any information to any Third Party with respect to the
terms of this Agreement without the prior written consent of the
other. This prohibition includes, but is not limited to, any press
releases, educational and scientific conferences, publications,
promotional materials, governmental filings, and discussions with
public officials and the media.
If a Party determines a release of information regarding the terms of this
Agreement is required by law, that Party will notify the other Party as soon as
practical and give as much detail as possible in relation to the disclosure
required. The Parties will then cooperate with respect to determining what
information will actually be released.
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If a Party receives a request from an authorized representative of a U.S.
and/or foreign tax authority for a copy of the Agreement, that Party may
provide a copy of the Agreement to such tax authority representative
without advance notice to or the consent or cooperation of the other
Party, but the disclosing Party must notify the other Party of the
disclosure as soon as practical. The release of any additional information
to a tax authority is subject to the notice and cooperation requirements
for other disclosures required by law as set forth in this Section.
7.2 ARRAY'S CONFIDENTIALITY OBLIGATIONS. Except upon obtaining Lilly's
prior written consent to the contrary, Array agrees that while this Agreement is
in effect and for [ * ] after the date this Agreement terminates or expires:
(i) it will not, nor will it permit any of its employees or
Permitted Third Parties to, use Lilly Confidential Information
other than for the purposes of this Agreement;
(ii) it will not, nor will it permit any of its employees or
Permitted Third Parties to, disclose any Lilly Confidential
Information to a Third Party (including Third Party
consultants, representatives, or agents of Array);
(iii) it will not, nor will it permit any of its employees or
Permitted Third Parties to, disclose any Lilly Confidential
Information. to any Array employee or Permitted Third Party
who does not need to know such Lilly Confidential Information
to further a Project; and
(iv) it will not, nor will it permit any of its employees or
Permitted Third Parties to, publish or submit for publication
Lilly Confidential Information.
A "Permitted Third Party" is a Third Party for whom Lilly has given written
consent to Array for Array's disclosure of specified Lilly Confidential
Information. For the sole purpose of monitoring its obligations hereunder, Array
may retain in its legal files one copy of all Lilly Confidential Information
that it receives.
7.3 LILLY'S CONFIDENTIALITY OBLIGATIONS.
(a) Array Confidential Information. Except upon obtaining Array's prior
written consent to the contrary, Lilly agrees that while this
Agreement is in effect and for [ * ] after the date this Agreement
terminates or expires:
(i) it will not, nor will it permit any of its employees or
Excepted Third Parties to, use Array Confidential Information
other than for the purposes of this Agreement;
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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(ii) it will not, nor will it permit any of its employees or
Excepted Third Parties to, disclose any Array Confidential
Information to a Third Party;
(iii) it will not, nor will it permit any of its employees or
Excepted Third Parties to, disclose any Array Confidential
Information to any Lilly employee or Excepted Third Party who
does not need to know such Array Confidential Information to
further a Project; and
(iv) it will not, nor will it permit any of its employees or
Excepted Third Parties to, publish or submit for publication
Array Confidential Information.
An "Excepted Third Party" is a Third Party for whom Array has given
written consent to Lilly for Lilly's disclosure of specified Array
Confidential Information. Lilly agrees that its Excepted Third
Parties shall be bound by confidentiality and non-use obligations
regarding the terms of this Agreement and Array Confidential
Information consistent with Lilly's under Section 7.1 and this
Subsection. For the sole purpose of monitoring its obligations
hereunder, Lilly may retain in its legal files one copy of all Array
Confidential Information that it receives.
(b) Array Processes. Lilly agrees that, while this Agreement is in
effect and for [ * ] after the date this Agreement terminates or
expires, it may disclose Array Processes to a Third Party only with
Array's prior written consent, except that Lilly may, without
Array's consent, disclose Array Processes to a Third Party (i)
working on behalf of Lilly or (ii) involved with Lilly in a research
and development collaboration. Lilly agrees that Third Parties to
whom Array Processes are disclosed under this Subsection shall be
bound by confidentiality obligations regarding Array Processes
consistent with Lilly's under this Subsection.
ARTICLE 8
TERM AND TERMINATION
8.1 TERM. This Agreement shall commence on the Effective Date and shall
continue in effect until [ * ] thereafter, unless earlier terminated as provided
in this Agreement or extended by mutual written agreement of the Parties.
8.2 LILLY VOLUNTARY TERMINATION. At any time after the Effective Date,
with or without cause, Lilly may terminate this Agreement upon providing Array
with thirty (30) days advance written notice of the same. Such termination shall
be effective upon the expiration of such thirty (30) day period. In the event
that Lilly terminates the Agreement under this Section (and only under this
Section), Lilly shall pay Array the applicable, one-time lump sum termination
payment below:
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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(i) [ * ] Array FTEs. If [ * ] Array FTEs were charged to Projects
during the Calendar Quarter immediately preceding Lilly's notice of
termination, then Lilly shall pay Array an amount equal to [ * ] of the
Array FTE funding obligation incurred by Lilly under Subsection (a) of
Section 4.1 with respect to such [ * ] (i.e., only the amount of such
obligation incurred with respect to Array FTEs, specifically excluding any
other reimbursable items described in Subsection (a) of Section 4.1).
(ii) [ * ] Array FTEs. If [ * ] Array FTEs were charged to Projects
during the Calendar Quarter immediately preceding Lilly's notice of
termination, then Lilly shall pay Array an amount equal to [ * ] of the
Array FTE funding obligation incurred by Lilly under Subsection (a) of
Section 4.1 with respect to such [ * ] (i.e., only the amount of such
obligation incurred with respect to Array FTEs, specifically excluding any
other reimbursable items described in Subsection (a) of Section 4.1).
(iii) [ * ] Array FTEs. If [ * ] Array FTEs were charged to Projects
during the Calendar Quarter immediately preceding Lilly's notice of
termination, then Lilly shall pay Array an amount equal to [ * ] of the
Array FTE funding obligation incurred by Lilly under Subsection (a) of
Section 4.1 with respect to such [ * ] (i.e., only the amount of such
obligation incurred with respect to Array FTEs, specifically excluding any
other reimbursable items described in Subsection (a) of Section 4.1).
(iv) [ * ] Array FTEs. If [ * ] Array FTEs were charged to Projects
during the Calendar Quarter immediately preceding Lilly's notice of
termination, then Lilly shall pay Array an amount equal to [ * ] of the
Array FTE funding obligation incurred by Lilly under Subsection (a) of
Section 4.1 with respect to such [ * ] (i.e., only the amount of such
obligation incurred with respect to Array FTEs, specifically excluding any
other reimbursable items described in Subsection (a) of Section 4.1).
(v) [ * ] Array FTEs. If greater then [ * ] Array FTEs were charged
to Projects during the Calendar Quarter immediately preceding Lilly's
notice of termination, then Lilly shall pay Array an amount equal to [ * ]
of the Array FrE funding obligation incurred by Lilly under Subsection (a)
of Section 4.1 with respect to such [ * ] (i.e., only the amount of such
obligation incurred with respect to Array FTEs, specifically excluding any
other reimbursable items described in Subsection (a) of Section 4.1).
The lump sum termination payment due under this Section shall be paid by
Lilly within thirty (30) days of the later of: (i) Lilly's receipt of all
reports, records, and other items due to Lilly under Section 2.8; (ii) the
completed transfer and assignment of all Project Rights by Array to Lilly in
accordance with Section 5. 1; (iii) the completed transfer to Lilly of any and
all Lilly
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Confidential Information that Array possesses; and (iv) the transfer of
possession and ownership to Lilly of any equipment, supplies, commodity
chemicals, non-commodity chemicals, solvents, reagents, materials, and other
capital items that Lilly supplied, leased, or purchased (or reimbursed Array
for) as described in Subsection (e) of Section 4.1.
In addition, the lump sum payment due under this Section shall be in lieu
of Lilly's payment obligations under Subsection (a) of Section 4.1 during the
thirty (30) day notice period. Therefore, Lilly shall neither be required nor
obligated to fund Array FTEs under Subsection (a) of Section 4.1 during such
thirty (30) day notice period. Similarly, Array FTEs need not work on Projects
during such thirty (30) day notice period, except to the extent necessary to
wind-down the Projects in an orderly and efficient fashion including, without
limitation, (i) furnishing Lilly with all required reports, records, and other
items as described in and in accordance with Section 2.8; (ii) transferring and
assigning all Project Rights to Lilly in accordance with Section 5. 1; (ill)
transferring to Lilly of any and all Lilly Confidential Information that Array
possesses; and (iv) transferring ownership and possession to Lilly of any
equipment, supplies, commodity chemicals, non-commodity chemicals, solvents,
reagents, materials, and other capital items that Lilly either supplied, leased,
or purchased (or reimbursed Array for) as described in Subsection (e) of Section
4.1.
8.3 TERMINATION FOR DEFAULT. If a Party believes the other Party is in
default of any material obligation under this Agreement, it may give notice of
such default to the other Party. Upon receipt of such notice, the defaulting
Party shall have thirty (30) days to remedy such default. If such default is not
remedied within those thirty (30) days, the Party claiming default may give
notice of termination, and termination of this Agreement shall be effective
immediately upon the defaulting Party's receipt of such notice.
8.4 TERMINATION DUE TO ARRAY OWNERSHIP CHANGE. In the event that Array is
reorganized, acquired by or merged with a Third Party, or substantially all of
its assets to which this Agreement relates are acquired by a Third Party
(collectively and individually, an "Ownership Change Event"), Lilly may, in its
sole discretion, terminate this Agreement upon thirty (30) days written notice
to Array (or, if applicable, Array's successor). Lilly may provide Array (or, if
applicable, Array's successor) with such notice at any time within twelve (12)
months of the occurrence of an Ownership Change Event.
8.5 TERMINATION DUE TO INSOLVENCY OR LIQUIDATION. Upon written notice to
the other Party, a Party may terminate this Agreement immediately if: (1) the
other Party goes into liquidation, other than for the purpose of a bona fide
reorganization, (ii) a receiver or trustee is appointed for the other Party's
property or estate, or (iii) the other Party makes an assignment for the benefit
of its creditors (whether or not any of the aforesaid acts are the outcome of a
voluntary act of the non-terminating Party). Termination of the Agreement under
this Section shall be effective as the occurrence of the applicable event.
8.6 SURVIVING RIGHTS AND OBLIGATIONS. The obligations of the Parties under
Section 5.1 (Ownership of Project Rights), Section 5.2 (Procedural Safeguard
Restrictions to Protect Confidentiality and Project Right Ownership), Article 6
(Record Keeping and Audit), Article 7
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(Confidentiality), the applicable termination provisions of Article 8
(Termination), Article 9 (Representations & Warranties), Article 10
(Indemnification), and Article 11 (Miscellaneous) will survive the termination
or expiration of this Agreement. Also, termination or expiration of this
Agreement shall not relieve either Party from obligations that are expressly
indicated to survive termination or expiration of the Agreement. Finally, except
as specifically provided to the contrary in this Agreement, termination or
expiration of the Agreement for any reason shall be without prejudice to any
rights that shall have accrued to the benefit of either Party prior to such
termination or expiration and shall not relieve the Parties of any obligations
accrued hereunder prior to such termination or expiration.
Moreover, to the extent not already done so under this Agreement, Array
shall promptly (but in no event later than thirty (30) days after the effective
date of the termination of expiration of the Agreement): (i) submit to Lilly all
required reports, records, and other items as described in and in accordance
with Section 2.8; (ii) transfer ownership and possession to Lilly of all Project
Rights and Lilly Confidential Information as described further in Sections 2.8
and 5. 1; and (iii) transfer ownership and possession to Lilly of any equipment,
supplies, commodity chemicals, non-commodity chemicals, solvents, reagents,
materials, and other capital items that Lilly either supplied, leased, or
purchased (or reimbursed Array for) as described in Subsection (e) of Section
4.1.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 LILLY'S AUTHORITY TO PERFORM AGREEMENT. Lilly represents and warrants
to Array that (i) it is free to enter into and perform this Agreement; (ii) it
has no agreement, policy, or other understanding with any other person, firm, or
entity exists that would interfere or conflict with its obligations hereunder;
and (iii) it has and will maintain all regulatory or governmental permits,
licenses, and approvals necessary for it to perform its obligations legally in
accordance with this Agreement. Moreover, Lilly represents and warrants to
Array that this Agreement is a legal, valid, and binding obligation of it,
enforceable against it in accordance with the terms of this Agreement.
9.2 ARRAY'S AUTHORITY TO PERFORM AGREEMENT. Array represents and warrants
to Lilly that (i) it is free to enter into and perform this Agreement; (ii) it
has no agreement, policy, or other understanding with any other person, firm or
entity exists that would interfere or conflict with its obligations hereunder;
and (iii) it has and will maintain all regulatory or governmental permits,
licenses, and approvals necessary for it to perform its obligations legally in
accordance with this Agreement. Moreover, Array represents and warrants to Lilly
that this Agreement is a legal, valid, and binding obligation of it, enforceable
against it in accordance with the terms of this Agreement.
9.3 NO DEBARMENT. Array hereby represents and warrants that it is in
compliance with the provisions of the Generic Drug Enforcement Act of 1992 and
covenants that at all times
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during this Agreement, it, its employees, and its permitted subcontractors will
comply with such Act. Array agrees, upon Lilly's request, to certify in writing
that neither it nor its employees or permitted subcontractors have been debarred
under the provisions of such Act.
9.4 YEAR 2000. Array hereby represents and warrants that its business
systems and/or computer systems and the business systems and/or computer systems
of any Third Party on which it is dependent are Year 2000 compliant. Array also
covenants to Lilly that it shall use commercially reasonable efforts to ensure
its obligations under this Agreement are not materially delayed, interrupted, or
otherwise hindered to the detriment of Lilly due to: (i) the business systems
and/or computer systems of Array ceasing to function or otherwise malfunctioning
because of date-based problems related to the Year 2000; or (ii) the business
systems and/or computer systems of any Third Party on which Array is dependent
ceasing to function or otherwise malfunctioning because of date-based problems
related to the Year 2000.
ARTICLE 10
MUTUAL INDEMNIFICATION
10.1 ARRAY'S RIGHT TO INDEMNIFICATION. Lilly shall indemnify and hold
harmless Array, its successors and assigns, and the directors, officers,
employees, agents and counsel thereof (the "Array Indemnitees") from and against
any and all liabilities, damages, losses, penalties, fines, costs, interest, or
expenses, including, without limitation reasonable attorneys, fees, ("Damages")
arising from or occurring as a result of a Third Party's, Lilly employee's, or
governmental agency's claim, action, suit, judgment, or settlement against an
Array Indemnitee that is due to or based upon: (i) the failure of Lilly to
disclose to Array any chemical handling and exposure hazards information related
to a Project known by Lilly; (ii) any breach of this Agreement by Lilly; (iii) a
clinical trial conducted or authorized by Lilly or its designee that is based
upon a compound transferred to Lilly by Array; or (iv) a product developed,
manufactured, used, sold, or otherwise distributed by or under authority of
Lilly or its designees that is based upon a compound transferred to Lilly by
Array (a "Third Party Claim"). However, Lilly shall not indemnify or hold
harmless Array Indemnitees from a Third Party Claim to the extent that Damages
from such Third Party Claim are finally determined to have resulted from the
acts or omissions of an Array Indemnitee, including the failure of Array to
disclose to Lilly any chemical handling and exposure hazards information known
by Array that was related to a compound that it transferred to Lilly.
10.2 LILLY'S RIGHT TO INDEMNIFICATION. Array shall indemnify and hold
harmless Lilly, its successors and assigns, and the directors, officers,
employees, agents and counsel thereof (the "Lilly Indemnitees") from and against
any and all Damages, payroll taxes, employment taxes, and employee benefits
arising from or occurring as a result of a Third Party's, Array employee's, or
governmental agency's claim, action, suit, judgment, or settlement against a
Lilly Indemnitee that is due to or based upon: (i) the failure of Array to
disclose to Lilly any chemical handling and exposure hazards information related
to a Project
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known by Array; (ii) any breach of this Agreement by Array; or (iii) the
Parties' classification or characterization of an Array employee or independent
contractor as a non-Lilly employee or the denial to an Array employee or
independent contractor of benefits extended to Lilly employees (a "Lilly Third
Party Claim"). However, Array shall not indemnify or hold harmless Lilly
Indemnitees from a Lilly Third Party Claim to the extent that Damages from such
Lilly Third Party Claim are finally determined to have resulted from the acts or
omissions of a Lilly Indemnitee.
10.3 INDEMNIFICATION NOTICE AND DEFENSE PROCEDURES.
(a) Notice. Promptly after a Lilly Indemnitee or an Array Indemnitee
(each, an "Indemnitee") receive notice of a pending or threatened
Third Party Claim or Lilly Third Party Claim, as the case may be (an
"Action"), such Indemnitee shall give written notice of the Action
to the Party to whom the Indemnitee is entitled to look for
indemnification pursuant to this Article 10 (the "Indemnifying
Party"). However, an Indemnitee's delay in providing or failure to
provide such notice shall not relieve the Indemnifying Party of its
indemnification obligations, except to the extent it can demonstrate
prejudice due to the delay or lack of notice.
(b) Defense. The Indemnifying Party shall be entitled to participate in
and, if it so desires, to assume the defense of an Action with
counsel reasonably satisfactory to the Indemnitee. Once the
Indemnifying Party notifies the Indemnitee of its election to assume
the defense of an Action, the Indemnifying Party is not liable to
the Indemnitee for the fees of other counsel or any other expenses
subsequently incurred by the Indemnitee in connection with such
defense, other than reasonable costs of investigation. However, the
Indemnitee shall have the right to employ separate counsel and to
participate in the defense of an Action (and the Indemnifying Party
shall bear the reasonable fees, costs, and expenses of such separate
counsel) if:
(i) the use of the counsel chosen by the Indemnifying Party would
present such counsel with a conflict of interest;
(ii) the actual or potential defendants in, or targets of, such
Action include both the Indemnifying Party and the Indemnitee,
and the Indemnitee reasonably concludes that there may be
legal defenses available to it that are different from or
additional to those available to the Indemnifying Party (in
which case the Indemnifying Party shall not have the right to
assume the defense of such Action on the Indemnitee's behalf);
(iii) the Indemnifying Party does not employ counsel satisfactory to
the Indemnitee to represent the Indemnitee within a reasonable
time after the Indemnitee's notice of such Action; or
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(iv) the Indemnifying Party authorizes the Indemnitee to employ
separate counsel at the Indemnifying Party's expense.
(c) Settlement. If an Indemnifying Party assumes the defense of an
Action, no compromise or settlement of such Action may be effected
by the Indemnifying Party without the Indemnitee's written consent
(which consent shall not be unreasonably withheld or delayed),
unless (i) there is no finding or admission of any violation of law
or any violation of the rights of any person and no effect on any
other claims that may be made against the Indemnitee and (ii) the
sole relief provided is monetary damages that are paid in full by
the Indemnifying Party.
ARTICLE 11
MISCELLANEOUS
11.1 FURTHER ASSURANCES. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
11.2 NO AGENCY; INDEPENDENT CONTRACTOR. It is understood and agreed that
nothing in this Agreement shall be construed as authorization for either Array
or Lilly to act as agent for the other. Lilly shall not incur any liability for
any act or failure to act by employees of Array, and Array shall not incur any
liability for any act or failure to act by employees of Lilly. Array shall
perform all of its services under this Agreement as an independent contractor,
and nothing herein shall be construed as creating any other relationship between
the Parties, including, without limitation, a joint venture, partnership, agency
relationship or employment relationship. Neither Array nor its employees or
agents shall be deemed for any purpose to be employees of Lilly nor participants
in any programs, insurance, or other benefits extended to Lilly's employees.
Array has sole authority and responsibility to hire, fire, supervise, and
otherwise control its employees and is solely responsible for all employee
benefits, wages, and employment taxes of its employees.
11.3 COMPLIANCE WITH LAWS. Array hereby covenants that its Project
Services and Other Services shall be carried out in compliance with all
applicable laws including, without limitation, federal, state, or local laws,
regulations, or guidelines governing the work at the site where such work is
being conducted. Array further covenants that its Project Services and Other
Services will be performed in accordance with current cGLP, cGCP, and cGMP, as
applicable.
11.4 COMPLIANCE WITH WORK PLAN AND LILLY PROTOCOLS AND SPECIFICATIONS.
Except as otherwise required by law, Array covenants that Project Services and
Other Services shall be conducted in compliance with the applicable Work Plan,
as well as with applicable Lilly protocols and/or specifications of which Array
is reasonably advised.
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11.5 INSURANCE. Array has obtained and shall maintain insurance coverage
covering risks associated with its business in such amounts as are customary in
the industry including, without limitation, covering liabilities that may arise
due to injuries to its employees or the negligent performance of Project
Services and Other Services hereunder.
11.6 AMENDMENT. This Agreement may not be amended, supplemented, or
otherwise modified except by an instrument signed by the Parties.
11.7 NOTICES AND REPORTS. All notices required by this Agreement shall be
in writing. All notices and reports shall be deemed given if delivered
personally or by registered or certified mail, return receipt requested and
postage prepaid or sent by express courier service, to the Parties at the
following addresses or such other addresses as may be designated in writing by
the respective Parties:
To Lilly: Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: General Counsel
To Array: Array BioPharma, Inc.
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
11.8 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Indiana, excluding any choice
of law rules which may direct the application of the law of any other
jurisdiction.
11.9 ASSIGNMENT. Array may not assign its rights and obligations under
this Agreement without Lilly's prior written consent. This Agreement shall be
binding upon and shall inure to the benefit of the successors and permitted
assigns of the Parties.
11.10 HEADINGS. The captions or headings of the articles, sections, and
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions.
11.11 SEVERANCE OF CLAUSES. Should any provision of this Agreement be
determined by a court of competent jurisdiction to violate or contravene any
applicable law or policy, such provision will be severed or modified by the
court to the extent necessary to comply with the applicable law or policy, and
such modified provision and the remainder of the provisions hereof will continue
in full force and effect.
11.12 NO WAIVER. The waiver of a breach hereunder may be effected only by
a writing signed by the waiving Party and shall not constitute a waiver of any
other breach.
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11.13 ENTIRE AGREEMENT. The Agreement constitutes the entire Agreement of
the Parties relating to the subject matter.
11.14 FORCE MAJEURE. Neither Party shall be liable to the other for loss
or damages or shall have any right to terminate this Agreement for any default
or delay attributable to any force majeure event, including but not limited to
acts of God, acts of government, war, fire, flood, earthquake, strike, labor
dispute and the like, if the Party affected shall give prompt notice of any such
cause to the other Party. The Party giving such notice shall thereupon be
excused from such of its obligations hereunder as it is thereby disabled from
performing for so long as it is so disabled and for sixty (60) days thereafter;
provided, however, that such affected Party commences and continues to take
reasonable and diligent actions to cure such cause.
11.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts; each of which shall constitute an original, but which together
shall constitute the same instrument.
11.16 NO LICENSES. Except as specifically provided for in this Agreement,
neither Party grants, expressed or implied, any license to the other Party under
this Agreement.
11.17 JOINTLY PREPARED. This Agreement has been prepared jointly and shall
not be strictly construed against either Party.
IN WITNESS WHEREOF, each Party, through its duly-authorized
representative, has executed this Agreement as of the Effective Date.
XXX XXXXX AND COMPANY ARRAY BIOPHARMA, INC.
/s/ August X. Xxxxxxxx 3/22/2000 /s/ Xxxxxx X. Xxxxxx 3/20/2000
--------------------------------- ------------------------------
August X. Xxxxxxxx, M.D. Xxxxxx X. Xxxxxx
Executive Vice President Chief Executive Officer
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CONFIDENTIAL
AMENDMENT NO. 1
TO
RESEARCH SERVICES AGREEMENT
THIS AMENDMENT NO. 1 TO RESEARCH SERVICES AGREEMENT (the "Amendment")
amends the Research Services Agreement, dated March 22, 2000 (the "Agreement"),
by and between Xxx Lilly and Company, Lilly Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX
00000 ("Lilly") and Array BioPharma, Inc., 0000 00xx Xxxxxx, Xxxxxxx, XX 00000
("Array") (together with Lilly and Array, the "Parties") and is made and
entered into by and between the Parties, pursuant to Section 11.6 of the
Agreement, effective as of July 19, 2000 (the "Amendment Effective Date").
Terms defined in the Agreement will have the same meaning in this
Amendment, unless specifically noted otherwise.
1. The following new sections are added to Article 5 of the Agreement:
"5.4 NON-SOLICITATION OF LILLY EMPLOYEES.
(a) Prohibition. Except as provided in Subsection (b) below,
while the [ * ] after the termination or expiration of the
Agreement, Array agrees that it will not, directly or
indirectly, (i) solicit or recruit for employment, (ii) offer
to employ, or (iii) employ any Lilly employee.
(b) Exceptions. Array may offer to employ a Lilly employee who
approaches Array for the purpose of employment: (i) on his or
her own initiative; or (ii) as a result of Array's use of a
general solicitation (such as an advertisement) not
specifically directed to Lilly employees.
5.5 NON-SOLICITATION OF ARRAY EMPLOYEES.
(a) Prohibition. Except as provided in Subsection (b) below,
while the [ * ] after the termination or expiration of the
Agreement, Lilly agrees that it will not, directly or
indirectly, (i) solicit or recruit for employment, (ii) offer
to employ, or (iii) employ any Array employee.
(b) Exceptions. Lilly may offer to employ an Array employee who
approaches Lilly for the purpose of employment: (i) on his or
her own initiative; or (ii) as a result of Lilly's use of a
general solicitation (such as an advertisement) not
specifically directed to Array employees.
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2. Except as specifically amended herein, all other provisions of the
Agreement remain in full force and effect.
IN WITNESS WHEREOF, each Party, through its duly-authorized
representative, has executed this Amendment as of the Amendment Effective Date.
XXX XXXXX AND COMPANY ARRAY BIOPHARMA, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx, Ph.D. /s/ Xxxxxx X. Xxxxxx
------------------------------ ------------------------------
Xxxxxx X. Xxxxxxxxx, Ph.D. Xxxxxx X. Xxxxxx
Vice President, LRL Chief Executive Officer
Discovery Chemistry Research
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