*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4)
200.83 AND 230.406.
THE MICROBIAL INFORMATION AGREEMENT
BETWEEN
ELITRA PHARMACEUTICALS INC.
AND
INCYTE GENOMICS, INC.
THIS AGREEMENT is entered into as of this 30th day of June, 2000 (the
"EFFECTIVE DATE") by and between ELITRA PHARMACEUTICALS INC. ("ELITRA"), a
Delaware corporation, having its principal place of business at 3510 Dunhill
Street, San Diego, CA 92121, and INCYTE GENOMICS, INC. ("INCYTE"), a Delaware
corporation, having its principal place of business at 3160 Porter Drive, Palo
Alto, CA 94304.
WHEREAS, ELITRA desires to purchase, and Incyte is willing to sell and
transfer to ELITRA, Incyte's microbial sequence database product, the
PathoSeq-TM- Database, and certain related information, as more fully described
herein, in order that ELITRA may use the PathoSeq-TM- Database in its drug
discovery programs, develop a microbial pathogen information business and
enhance the value of the PathoSeq-TM- Database by adding ELITRA's own
proprietary information thereto;
WHEREAS, Incyte intends to focus its gene sequence database business in
the general area of human and other higher eukaryotic (not focused on bacterial,
fungal and archaeobacterial organisms) genomic information;
WHEREAS, concurrently herewith, ELITRA and Incyte have entered into a
Technology License Agreement and a Microbial Dataflow Software License Agreement
(the "Microbial Dataflow Agreement") providing for the license and
implementation of certain Incyte software by ELITRA; and
WHEREAS, Elitra desires to have access to other specified Incyte
products and services, subject to the conditions and to the extent herein set
forth.
NOW, THEREFORE, Incyte and ELITRA, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS.
When used in this Agreement, the following definitions shall apply:
1.1 "ACCEPTANCE DATE" shall be the date that Incyte delivers to
ELITRA, and ELITRA accepts, the Microbial Information and the related
Documentation, which date shall occur on or before [... *** ...]. Such
information shall be delivered on a CD-ROM and/or on such other media as has
been mutually agreed upon by the Parties depending upon the nature and format
of the information being transferred.
1.2 "COMMON CODE" shall have the meaning provided in the
Technology License Agreement.
1.3 "CONTRACT" shall mean any written, oral, implied or other
agreement, contract, understanding, arrangement, instrument, note, guaranty,
indemnity, representation, warranty, deed, assignment, power of attorney,
certificate, purchase order, work order, insurance policy, benefit plan,
commitment, covenant, assurance or undertaking of any nature.
1.4 "DOCUMENTATION" shall mean the user's manuals provided to
ELITRA along with the PathoSeq-TM- Database.
*CONFIDENTIAL TREATMENT REQUESTED
1.
1.5 "ELITRA AFFILIATE(S)" shall mean any company or entity
controlled by, controlling, or under common control with ELITRA shall include
any company one hundred percent (100%) of whose voting stock or participating
profit interest is owned or controlled, directly or indirectly, by ELITRA, and
any company which owns or controls, directly or indirectly, one hundred percent
(100%) of the voting stock of ELITRA.
1.6 "ENCUMBRANCE" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
transfer of any asset, any restriction on the receipt of any income derived from
any asset, any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset). Notwithstanding the foregoing, with respect to any claim, infringement
or interference, the term "Encumbrance" shall mean any claim, infringement or
interference, as applicable, of which Incyte has knowledge.
1.7 "GENOMIC DNA SEQUENCE INFORMATION" shall mean sequence
information provided to ELITRA by Incyte which was (a) obtained from the first
pass sequencing (in long read configuration) of a Genomic DNA Template in either
the 3' or 5' direction, exclusive of vector sequences (hereinafter referred to
as "Readable Sequences"), (b) all or any part of the sequence information
pertaining to chromosomal region(s) of a target microbial genome arising from
the sequencing of Genomic Libraries, (c) microbial genomic sequence information
available to Incyte from external sources including GenBank DNA, GenBank protein
and, at Incyte's discretion, such other publicly available databases and
incorporated into the PathoSeq-TM- Database, or (d) sequence information
otherwise provided by Incyte to ELITRA under this Agreement.
1.8 "GENOMIC DNA TEMPLATE" shall mean a specific, purified clone
from a Genomic Library prepared for sequence analysis.
1.9 "GENOMIC LIBRARY" shall mean a collection of individual DNA
clone(s) (e.g., a vector including a random insert) representative of a target
microbial genome.
1.10 "GOVERNMENTAL BODY" shall mean any: (a) nation, principality,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign
or other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality, officer,
official, representative, organization, unit, body or entity and any court or
other tribunal); (d) multi-national organization or body; or (e) individual,
entity or body exercising, or entitled to exercise, any executive, legislative,
judicial, administrative, regulatory, police, military or taxing authority or
power of any nature.
1.11 "INCYTE AFFILIATE(S)" shall mean any company or entity
controlled by, controlling, or under common control with Incyte shall include
any company one hundred percent (100%) of
*CONFIDENTIAL TREATMENT REQUESTED
2.
whose voting stock or participating profit interest is owned or controlled,
directly or indirectly, by Incyte, and any company which owns or controls,
directly or indirectly, one hundred percent (100%) of the voting stock of
Incyte.
1.12 "INCYTE PROPRIETARY PROGRAMS" shall mean an internal research
and development program of Incyte which (a) utilizes any or all of the
technology claimed in or related to the patent applications and patents listed
on EXHIBIT B, or (b) involves material investment by Incyte intended to develop
discoveries, inventions, data or information (whether or not patentable) beyond
that consisting of Microbial Database Information and which may result in
discoveries, inventions, data or information (whether or not patentable) which
are the property of Incyte. ELITRA hereby acknowledges that Incyte Proprietary
Programs are independent of those services regularly performed by Incyte to
produce or generate Microbial Database Information.
1.13 "INCYTE SOFTWARE PRODUCT(S)" shall mean the LifeTools-TM-
Product and the Microbial Dataflow Software (as such terms are defined in the
Microbial Dataflow Agreement and Technology License Agreement).
1.14 "LIFESEQ-REGISTERED TRADEMARK- GOLD DATABASE" shall mean
Incyte's proprietary database of human Annotation Information, DNA Sequence
Information and corresponding cDNA Clones as of the Effective Date subject to a
grant of license rights; PROVIDED, HOWEVER, that the LifeSeq-Registered
Trademark- Gold Database shall exclude Satellite Database Services and Incyte
Proprietary Programs.
1.15 "LIFETOOLS-TM- PRODUCT" shall have the meaning provided in the
Technology License Agreement.
1.16 "LINUX FARM TECHNOLOGY" shall mean a software system that
provides customized scheduling functions which distribute tasks over a large
number of computer systems based on Intel microprocessors and the Linux
operating system.
1.17 "MICROBIAL ANNOTATION INFORMATION" shall mean information
which Incyte has the legal right to transfer to ELITRA associated with
individual Genomic DNA Templates, including, but not limited to, homology
information, gene cluster identifiers, annotations and publicly available
microbial databases reasonably available to Incyte such as GenBank.
1.18 "MICROBIAL DATABASE INFORMATION" shall mean all or any part of
the Microbial Annotation Information and Genomic DNA Sequence Information in the
PathoSeq-TM- Database; PROVIDED, HOWEVER, that the Microbial Database
Information shall exclude Satellite Database Services and Incyte Proprietary
Programs.
1.19 "MICROBIAL DATABASE RAW DATA" shall mean trace file (I.E.,
chromatogram) data for microbial organisms sequenced by Incyte which Incyte has
the legal right to transfer to Elitra, such number of organisms to be no less
than [... *** ...].
1.20 "MICROBIAL DATABASE SOURCE CODE" shall mean the source code
written for the user interface of the PathoSeq-TM- Database that is unique to
the PathoSeq-TM- Database, as set forth in EXHIBIT C-1 hereto, and the Oracle
software for populating the PathoSeq-TM- Database.
*CONFIDENTIAL TREATMENT REQUESTED
3.
1.21 "MICROBIAL DATAFLOW SOFTWARE" shall have the meaning provided
in the Microbial Dataflow Agreement.
1.22 "MICROBIAL GENE PRODUCTS" shall mean certain microbial gene
products derived from the PathoSeq-TM- Database as provided to a PathoSeq-TM-
Database Customer by Incyte, which generally include nucleotide or protein
products or materials that are developed or derived therefrom, e.g. DNAs,
partial genes, full length genes corresponding thereto, RNAs, peptides,
polypeptides and proteins encoded thereby, and which are more specifically
defined in each PathoSeq-TM- Database Agreement for each PathoSeq-TM- Database
Customer.
1.23 "MICROBIAL INFORMATION" shall mean the Microbial Database Raw
Data, the Microbial Database Source Code, the PathoSeq-TM- Database and the
Patent Application. The Microbial Information shall specifically exclude all of
Incyte's and its Affiliates' right, title and interest, of whatever kind or
nature, in and to the PathoSeq-TM- Database Agreements.
1.24 "ORDER" shall mean any: (a) order, judgment, injunction,
edict, decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award issued, made, entered, rendered or otherwise
put into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or (b) Contract
with any Governmental Body entered into in connection with any Proceeding.
1.25 "PARTY" shall mean ELITRA or Incyte and, when used in the
plural, shall mean ELITRA and Incyte.
1.26 "PATENT APPLICATION" shall mean (a) the patent filed under
Incyte internal docket number(s) PM-0008-4 US and PM-0008-4 PCT, (b) all U.S.
and foreign patent applications which may be filed corresponding thereto and any
and all patents issuing therefrom, and (c) all divisionals, reissues,
substitutions, continuations, continuations-in-part and extensions thereof and
any patents issuing thereon.
1.27 "PATENT SEARCH MODULE" shall have the meaning provided in the
Technology License Agreement.
1.28 "PATHOSEQ-TM- DATABASE" shall mean (a) Incyte's existing
proprietary database of Microbial Annotation Information and Genomic DNA
Sequence Information and corresponding Genomic DNA Templates, as of the
Effective Date, together with related software and documentation, as defined in
EXHIBIT C, which is currently made available by Incyte on a non-exclusive basis
to ELITRA and other subscribers, and (b) all improvements or updates to such
proprietary database or any component thereof which Incyte is obligated to
provide to the PathoSeq-TM- Database Customers pursuant to the PathoSeq-TM-
Database Agreements; PROVIDED, HOWEVER, that the PathoSeq-TM- Database shall
exclude (i) Satellite Database Services and Incyte Proprietary Programs, (ii)
all proprietary information of ELITRA, including, without limitation,
proprietary functional genomic information of ELITRA and (iii) any improvements,
enhancements or additions to the PathoSeq-TM- Database developed or made by
ELITRA.
1.29 "PATHOSEQ-TM- DATABASE AGREEMENTS" shall mean those agreements
in effect as of the Effective Date between Incyte and the PathoSeq-TM- Database
Customers pursuant to which Incyte has granted such third parties access to the
PathoSeq-TM- Database. EXHIBIT D hereto lists
4.
each PathoSeq-TM- Database Agreement and sets forth the expiration date of each
such PathoSeq-TM- Database Agreement.
1.30 "PATHOSEQ-TM- DATABASE CUSTOMERS" shall mean the third parties
listed on EXHIBIT D hereto.
1.31 "PRIOR AGREEMENT" shall mean that certain PathoSeq-TM- Product
Agreement between the Parties dated March 29, 2000.
1.32 "PROCEEDING" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or any arbitrator or arbitration panel.
1.33 "SATELLITE DATABASE SERVICES" shall mean the research and
development programs or collaborations established by Incyte, in which Incyte
utilizes the PathoSeq-TM- Database and/or the LifeSeq-Registered Tradmark-
Database and/or Incyte's DNA sequencing and analysis capabilities, and which are
independent of database services as contemplated herein; PROVIDED, HOWEVER,
that, with respect to the PathoSeq-TM- Database, "Satellite Database Services"
shall only include Incyte's current contractual arrangements with the
PathoSeq-TM- Database Customers under the PathoSeq-TM- Database Agreements.
These programs are subject to non-disclosure obligations and involve material
investment and are intended to develop incremental know-how, above and beyond
that comprised by Microbial Database Information, and may result in know-how,
inventions, discoveries or improvements, whether or not patentable, which are
the property of Incyte or such third party. ELITRA hereby acknowledges that,
with respect to the PathoSeq-TM- Database, Incyte's license under Section 2.3(a)
shall include the right to perform Satellite Database Services on behalf of
PathoSeq-TM- Database Customers pursuant to the PathoSeq-TM- Database
Agreements.
1.34 "SOFTWARE" as generally used herein shall mean software in
various stages of development or any product thereof and includes without
limitation the literal elements of a program (source code, object code, manuals,
instructions or otherwise), its audiovisual components (menus, screens,
structure and organization), any human or machine readable form of the program,
and any writing or medium in which the program or information therein is stored,
written or described, including without limitation, diagrams, flow charts,
designs, drawings, specifications, models, data, development tools and routines,
bug reports and customer information.
1.35 "TRADEMARK" shall mean the trademark PathoSeq-TM-.
2. SALE OF MICROBIAL INFORMATION; LICENSES.
2.1 SALE OF MICROBIAL INFORMATION TO ELITRA.
2.1.1 On the Effective Date, Incyte shall cause to be sold,
assigned, transferred, conveyed and delivered to ELITRA good and valid title to
the Microbial Information, free of any Encumbrances other than the rights
granted to Incyte's existing subscribers to the PathoSeq-TM-
5.
Database under the PathoSeq-TM- Database Agreements, on the terms and subject to
the conditions set forth in this Agreement. In addition, on the Effective Date,
Incyte shall deliver to ELITRA, in such form and by such means as has been
mutually agreed upon by the parties, the PathoSeq-TM- Database, the Microbial
Database Raw Data, the Microbial Database Source Code and the Documentation.
2.1.2 On the Effective Date, Incyte shall execute and
deliver to ELITRA such bills of sale, endorsements, assignments and other
documents as may be necessary or appropriate to assign, convey, transfer and
deliver to ELITRA good and valid title to the Microbial Information free of any
Encumbrances other than the rights granted to Incyte's existing subscribers to
the PathoSeq-TM- Database under the PathoSeq-TM- Database Agreements. Without
limiting the generality of the foregoing, Incyte agrees to promptly execute,
upon each request by ELITRA, assignment and other documents and to testify and
take other acts at ELITRA's expense and as reasonably requested by ELITRA, in
order to apply for and obtain, in ELITRA's name and for its benefit, any and all
patents, trade secrets, or other intellectual property rights throughout the
world related to the Patent Application, and to transfer, effect, confirm,
perfect, record, preserve, protect and enforce all rights, titles and interests
assigned hereunder.
(a) ELITRA further agrees not to challenge the
ownership or the validity of the Trademark or any application for registration
thereof or any trademark registration thereof or any rights of Incyte therein.
2.2 LICENSES TO ELITRA. Subject to the terms and conditions of
this Agreement, Incyte hereby grants to ELITRA:
(a) an exclusive (except as set forth below),
worldwide, fully-paid, perpetual and irrevocable (unless terminated under
Section 5.1) license to use the Trademark in connection with the marketing and
sale of the PathoSeq-TM- Database; PROVIDED, HOWEVER, that: (i) ELITRA shall
comply with all applicable laws and regulations with respect to the Trademark
and shall not do or suffer to be done any act or thing that would impair
Incyte's rights in the Trademark or damage the reputation for quality inherent
in those rights; and (ii) ELITRA agrees not to adopt or use any other trademark,
words, or symbol that features or includes the word PathoSeq or any marks which
are confusingly similar to the Trademark; and PROVIDED, FURTHER, that the
exclusivity of the foregoing license shall be subject to the right of Incyte to
use the Trademark in connection with the PathoSeq-TM- Database Agreements during
the respective terms of the PathoSeq-TM- Database Agreements; and
(b) a non-exclusive, worldwide, fully-paid,
perpetual and irrevocable (unless terminated under Section 5.1) license under
the patent rights specified in EXHIBIT A to develop, make, have made, use, sell,
have sold, offer for sale and import the Microbial Information.
2.3 LICENSES TO INCYTE. Subject to the terms and conditions of
this Agreement, ELITRA hereby grants to Incyte:
(a) a fully paid, non-exclusive, royalty-free,
perpetual and irrevocable (unless terminated under Section 5.1) license, during
the respective terms of the PathoSeq-TM-
6.
Database Agreements, under the Microbial Information solely to perform Incyte's
obligations under the PathoSeq-TM- Database Agreements, which license shall
include the right to grant sublicenses solely to the PathoSeq-TM- Database
Customers in accordance with the terms of the PathoSeq-TM- Database Agreements;
(b) a fully paid, non-exclusive, worldwide,
royalty-free, perpetual and irrevocable (unless terminated under Section 5.1)
license, without the right to grant sublicenses, to use the
PathoSeq-TM-Database to make, have made, use, sell, have sold, offer for sale
and import [... *** ...] and [... *** ...] or [... *** ...] or [... *** ...]
or [... *** ...]; provided that [... *** ...] (currently named [... *** ...])
or [... *** ...] (currently named [... *** ...]) or other such [... *** ...]
or [... *** ...] on such [... *** ...] or [... *** ...] (or on [... *** ...])
to [... *** ...] from other [... *** ...] or [... *** ...]; and
(c) a fully paid, non-exclusive, worldwide,
royalty-free, perpetual and irrevocable (unless terminated under Section 5.1)
license, without the right to grant sublicenses, to use the PathoSeq-TM-
Database for internal research purposes for the sole benefit of Incyte and the
Incyte Affiliates.
2.4 PATHOSEQ-TM- DATABASE AGREEMENTS. Incyte shall retain all
right, title and interest in and to the PathoSeq-TM- Database Agreements.
Incyte represents and warrants that the list of PathoSeq-TM- Database
Customers is a complete list of all customers who have current licenses to
the PathoSeq-TM-Database and that the expiration dates of the PathoSeq-TM-
Database Agreements are true, complete and correct in all respects as of the
Effective Date. From and after the Effective Date of this Agreement, Incyte
shall not sell, license, sublicense or otherwise provide access to the
PathoSeq-TM- Database to any subscribers or other third parties other than
the PathoSeq-TM- Database Customers. [... *** ...] agrees that it shall
[... *** ...] that would [... *** ...] or any [... *** ...]. [... *** ...]
agrees to [... *** ...] to [... *** ...] that will [... *** ...] or its
[... *** ...]. In addition, [... *** ...] that, in connection with
[... *** ...] to [... *** ...] for [... *** ...], [... *** ...] shall (a)
provide [... *** ...] which may be [... *** ...] regarding the [... *** ...]
as [... *** ...] may [... *** ...] and (b) upon [... *** ...], make
[... *** ...]. Upon expiration or termination of the PathoSeq-TM- Database
Agreements, [... *** ...] will [... *** ...], and shall [... *** ...] or be
[... *** ...] which [... *** ...].
*CONFIDENTIAL TREATMENT REQUESTED
7.
2.5 OTHER SERVICES PROVIDED TO ELITRA.
2.5.1 LIFESEQ-REGISTERED TRADEMARK- GOLD DATABASE SEARCHES.
At ELITRA's request, Incyte will perform homology searches against the
LifeSeq-Registered Trademark- Gold Database for up to [... *** ...] sessions (up
to [... *** ...] hours per session) with the number of queries to be mutually
agreed upon by the Parties. ELITRA shall have, and Incyte hereby grants to
ELITRA, the right (i) to use the results of the homology searches for the
purpose of internal anti-bacterial and anti-fungal drug development, and (ii) to
disclose to its collaborators information resulting from such homology searches
solely regarding the existence of homology, the degree of homology and the
name(s) or public domain functions of public domain gene(s) (i.e. the GenBank
identifier) against the LifeSeq-Registered Trademark- Gold Database for the
purpose of anti-bacterial and anti-fungal drug development; PROVIDED, HOWEVER,
that ELITRA shall not disclose to any third party any other information from the
LifeSeq-Registered Trademark- Gold Database, including, without limitation,
sequence information, polymorphism information, annotation information,
expression information, etc., to the extent that such information is proprietary
to Incyte. Except as set forth in the preceding sentence, no rights or licenses
to use any LifeSeq-Registered Trademark- Gold Database information are included.
No license to any patent rights are provided for except for those in EXHIBIT A
specifically licensed under the terms and conditions of this Agreement.
2.5.2 INCYTE CONSULTING SERVICES. Incyte shall provide
ELITRA with, and the consideration paid by ELITRA to Incyte hereunder
includes the right to receive, up to [... *** ...] of consulting services
from Incyte (i.e. training, programming, support, computer consulting, etc.)
pursuant to this Agreement, at reasonable times to be agreed upon in good
faith by the parties, provided that [... *** ...] of such [... *** ...] of
consulting services shall be devoted to programming support and training.
Such consulting services shall be valued at the rate of $[... *** ...] per
day (totaling $[... *** ...] in the aggregate for [... *** ...] of such
services). As a component of such consulting services, upon ELITRA's request,
Incyte shall facilitate ELITRA's re-build of the then current version of the
PathoSeq-TM- Database in its entirety in a manner such that the PathoSeq-TM-
Database performs data processing of microbial DNA sequence information and
related protein sequence information in substantially the same manner as such
data processing is currently performed at Incyte as of the Effective Date of
this Agreement (the "Project"). Incyte shall consult with ELITRA to help
ELITRA determine the information, personnel and materials necessary to
complete the Project. ELITRA shall notify Incyte on the date that all such
information, personnel and materials are available to start the Project. The
start date for the Project (the "Start Date") shall be within two weeks of
such notification by ELITRA to Incyte. Subject to [... *** ...] of such
[... *** ...] and [... *** ...] such [... *** ...] to be determined
[... *** ...] shall [... *** ...] within [... *** ...] of the [... *** ...]
(the "Completion Date"). The [... *** ...] shall be complete when the
[... *** ...] and [... *** ...] in [... *** ...]. In connection with the
completion of the Project, Incyte shall make available to ELITRA and shall
provide ELITRA with professionals with significant experience appropriate for
the Project. Incyte further agrees to commit [... *** ...] of dedicated, and
as reasonably practical, continuous time to diligently complete the Project
on or before the Completion Date. [... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
8.
[... *** ...], (i) [... *** ...]; and (ii) [... *** ...]. No more than
[... *** ...] of consulting time will be deducted from ELITRA's total
consulting hours to complete the Project at ELITRA. In connection with the
completion of the Project, Incyte shall conduct substantially similar quality
control tests as Incyte conducts in connection with the performance and
functionality of the PathoSeq-TM- Database as provided by Incyte as of the
Effective Date of this Agreement and shall provide ELITRA with a copy of
Incyte's standard quality control documentation. At such time as the Project
has been completed, [... *** ...] shall be [... *** ...]($[... *** ...]).
[... *** ...] shall [... *** ...] for any [... *** ...] at [... *** ...]until
[... *** ...]. Incyte shall make available to ELITRA consulting services for
the purposes of continuing to develop and customize for ELITRA the
PathoSeq-TM- Database, the Common Code, the Patent Search Module, the Linux
Farm Technology, Microbial Dataflow Software, Microbial Dataflow Source Code
and the LifeTools-TM- Product. Any amounts paid for these services shall
count towards the service payments contemplated by Section 4.2. Incyte shall
provide such services for as long as Incyte continues to provide such
services to third parties as part of its business; PROVIDED, HOWEVER, that
Incyte shall provide such services to ELITRA for at least [... *** ...]
following the Completion Date. [... *** ...] with respect to [... *** ...] or
[... *** ...], then to the extent [... *** ...]shall provide [... *** ...]
and [... *** ...].
2.5.3 IMPROVEMENTS AND UPDATES TO PATHOSEQ-TM- DATABASE. To
the extent that Incyte is obligated to provide improvements or updates to the
PathoSeq-TM- Database or any component thereof to the PathoSeq-TM- Database
Customers pursuant to the PathoSeq-TM- Database Agreements, Incyte shall deliver
any such improvements, updates and related information to ELITRA concurrently
with delivery to the first PathoSeq-TM- Database Customer. The fee associated
with the transfer of such improvements or updates is [... *** ...] Dollars
($[... *** ...]) per release.
2.6 ADDITIONAL COVENANTS.
2.6.1 [... *** ...]
(a) [... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
9.
[... *** ...]
(b) [... *** ...]
2.6.2 RIGHT OF FIRST REFUSAL. In the event that during
the [...***...] period following the Effective Date (the "RIGHT OF FIRST
REFUSAL PERIOD"), ELITRA considers enabling the PathoSeq-TM- Database for use
by subscribers over the Internet, then ELITRA shall provide Incyte with
written notice thereof, and Incyte shall have a right of first refusal to be
the exclusive distributor of the PathoSeq-TM- Database for use via the
Internet in accordance with this Section 2.6.2. Incyte shall then have
[...***...] after receipt of such notice to exercise, by written notice to
ELITRA, a right of first refusal to be the exclusive distributor of the
PathoSeq-TM- Database for use via the Internet. If Incyte notifies ELITRA
within [...***...] that Incyte desires to negotiate for the right to be the
exclusive distributor of the PathoSeq-TM- Database for use via the Internet,
the parties shall negotiate in good faith for up to [...***...] from such
notification regarding the terms pursuant to which Incyte would be the
exclusive distributor of the PathoSeq-TM-Database for use via the Internet.
Failure by Incyte to give notice of its interest or lack of interest in
negotiating for such rights within [...***...]after receipt of written notice
from ELITRA as described in the first sentence of this Section 2.6.2 shall be
deemed to constitute a waiver by Incyte of its right of first refusal for the
right to be the exclusive distributor of the PathoSeq-TM- Database for use
via the Internet under this Section 2.6.2. In addition, failure of the
parties to agree within such [...***...] negotiation period shall be deemed
to constitute rejection by Incyte of the right to be the exclusive
distributor of the PathoSeq-TM- Database for use via the Internet; PROVIDed,
HOWEVER, that, during the Right of First Refusal Period, ELITRA shall not
enter into any agreement with a third party for such third party to be the
exclusive distributor of the PathoSeq-TM- Database for use via the Internet
on terms less favorable to ELITRA than those terms last offered in good faith
to Incyte by ELITRA under this Section 2.6.2 without first offering to Incyte
the right to be the exclusive distributor of the PathoSeq-TM- Database for
use via the Internet on the terms offered to such third party. After such
[...***...] period, nothing shall preclude ELITRA from, on its own, enabling
the PathoSeq-TM- Database for use by subscribers over the Internet either
during the Right of First Refusal Period or thereafter.
In the event that, following compliance with the preceding
paragraph, ELITRA grants to a third party the right to be a non-exclusive
distributor of the PathoSeq-TM- Database for use via the Internet, ELITRA shall
provide Incyte with written notice thereof, and Incyte shall be entitled to
become a non-exclusive distributor of the PathoSeq-TM- Database for use via the
Internet pursuant to reasonable terms and conditions to be agreed upon by the
Parties, and in any
*CONFIDENTIAL TREATMENT REQUESTED
10.
event, at the same price and pursuant to other applicable terms as are then
being offered by ELITRA to such third-party distributors. If ELITRA has entered
into non-exclusive arrangements with more than one third-party distributor and
Incyte elects to become a non-exclusive distributor pursuant to its right under
this Section 2.6.2, ELITRA shall charge Incyte the same price and other
applicable terms offered to the most-recently contracted third-party
distributor.
2.6.3 LINK TO ELITRA'S WEBSITE. Incyte hereby agrees
that, as promptly as practicable following the Effective Date and until the
[... ***...] of the Effective Date, Incyte's website (currently located at
www.incyte.com) shall include, on the appropriate page(s) (as mutually agreed
by the Parties) of such website in which Incyte provides information
regarding its products and services, a link to ELITRA's website (intended to
be located at www.elitra.com), which link shall appropriately indicate the
availability of the PathoSeq-TM- Database through ELITRA. As promptly as
practicable following the Effective Date, the Parties shall mutually agree in
good faith upon the placement, prominence and appearance of such link, and
Incyte shall use its commercially reasonable efforts to implement and
maintain the operation of such link on Incyte's website.
3. LIABILITIES
3.1 THIRD PARTY INTELLECTUAL PROPERTY. Subject to the warranties
made hereunder as to each Party's knowledge of any third party rights that may
be infringed by the uses of the Microbial Database Raw Data, the Microbial
Database Source Code and the Microbial Dataflow Software as contemplated herein,
ELITRA acknowledges that, in order to access or utilize the Microbial Database
Raw Data, the Microbial Database Source Code and the Microbial Dataflow
Software, ELITRA may be required to obtain licenses under third party patent
rights or such other third party intellectual property rights, (including by way
of example a Sybase, Silicon Graphics or Oracle license or a license under any
third party patent rights on microbial sequences), and it is hereby agreed that
it shall be ELITRA's responsibility, if necessary, to obtain such licenses, at
ELITRA's expense. Attached hereto as SCHEDULE 3.1 is a true and complete list of
third party software programs which are required for ELITRA to access and
utilize the Microbial Database Raw Data, the Microbial Database Source Code and
the Microbial Dataflow Software in conjunction with the PathoSeq-TM- Database.
3.2 EXCLUDED LIABILITIES. Except as specifically set forth in
Section 3.1, ELITRA shall not be responsible for or assume any debts,
liabilities or obligations of Incyte or any of its affiliates, known, unknown,
contingent or otherwise (herein called the "EXCLUDED LIABILITIES"), whether or
not relating to the Microbial Information or the PathoSeq-TM- Database
Agreements, and all such Excluded Liabilities shall remain the sole obligation
of Incyte or its affiliates (but only if and to the extent that Incyte or any of
its affiliates is or would otherwise be liable for or obligated in respect of
such Excluded Liabilities), including without limitation, any of the following
liabilities:
(i) any liability of Incyte or any of its
affiliates relating to or arising out of the operation or conduct by Incyte or
any of its affiliates of any business;
*CONFIDENTIAL TREATMENT REQUESTED
11.
(ii) any liability with respect to the Microbial
Information arising from accidents, events, occurrences, misconduct, breach of
fiduciary duty or actions taken or omitted to be taken prior to the Effective
Date, whether or not covered by insurance or in effect either at the time of the
accident, event, occurrence or relevant conduct or at the time at which the
claim with respect thereto is made, or any product liability claims for
injuries, property damage or other losses arising with respect to inventory or
products produced by Incyte or any of its affiliates;
(iii) any liability for payment with respect to
services performed or goods acquired relating to the Microbial Information prior
to the Effective Date, or any liability arising out of a breach occurring prior
to the Effective Date of any provision of a Contract, and any misrepresentation
or omission to make any statement at or prior to the Effective Date related to
any Contract (including, without limitation, the PathoSeq-TM- Database
Agreements).
4. PAYMENTS
4.1 FEES. Payments for the assignment of the Microbial
Information, the licenses granted pursuant to Section 2.2 hereof and the
Microbial Dataflow Agreement and Technology License Agreement, and the other
services contemplated by Section 2.5 shall be:
(a) Two Million Two Hundred Ninety Thousand
Dollars (US$2,290,000) in cash, against which ELITRA shall be entitled to credit
the $375,000 already paid to Incyte pursuant to the Prior Agreement, and the
remainder of which ($1,915,000) shall be paid in eleven (11) equal quarterly
installments of $150,000 commencing on January 1, 2001, and a final quarterly
payment of $265,000.
(b) One Million Five Hundred Thirty-Eight
Thousand Four Hundred Sixty-Two (1,538,462) shares of ELITRA's preferred stock
having a mutually agreed value and liquidation preference of $3.25 per share
(the "Preferred Shares"), which Preferred Shares shall be issued to Incyte
pursuant to a stock purchase agreement to be entered into concurrently herewith
in the form attached hereto as EXHIBIT E (the "Stock Purchase Agreement"). In
connection with the issuance of the Preferred Shares to Incyte, Incyte shall
become a party to the existing Investor Rights Agreement between ELITRA and the
holders of its preferred stock, a copy of which agreement is attached hereto as
EXHIBIT F (the "Investor Rights Agreement"). The rights, preferences and
privileges of the Preferred Shares shall be PARI PASSU with the Series C
Preferred as set forth in the form of Amended and Restated Certificate of
Incorporation attached as an exhibit to the Stock Purchase Agreement.
All payments by Elitra under this Section 4.1 will be nonrefundable.
4.2 SERVICE PAYMENTS. In addition to the amounts payable by ELITRA
under Section 4.1 above, ELITRA shall purchase Two Million Seven Hundred
Thousand Dollars ($2,700,000) of products, databases, and/or services made
commercially available by Incyte during the three (3) year period following the
Effective Date. ELITRA agrees that it shall purchase at least $500,000 of such
products, databases and/or services during the one (1) year period commencing on
the Effective Date ("YEAR 1") and at least $850,000 of such products,
12.
databases and/or services during the one (1) year period commencing on the
first (1st) anniversary of the Effective Date ("YEAR 2"); PROVIDED, HOWEVER,
that if ELITRA requests under Section 2.5.2, that Incyte, as part of its
consulting services, perform the Project, then (i) [... *** ...] or
[... *** ...], and (ii) [... *** ...]
(a) To the extent that ELITRA fails to purchase
an aggregate of $500,000 of such products, databases and/or services during Year
1, then ELITRA shall pay to Incyte at the end of Year 1 an amount in cash equal
to the difference between $500,000 and the total dollar amount of products,
databases and/or services actually purchased by ELITRA pursuant to this Section
4.2 during Year 1.
(b) To the extent that ELITRA fails to make
purchases totaling, or otherwise pay to Incyte pursuant to this Section 4.2, an
aggregate of $1,350,000 during Years 1 and 2 combined, then ELITRA shall pay to
Incyte at the end of Year 2 an amount in cash equal to the difference between
$1,350,000 and the total dollar amount previously paid to Incyte pursuant to
this Section 4.2 (whether for products, databases and/or services or pursuant to
subsection (a) above) during Years 1 and 2 combined.
(c) To the extent that ELITRA fails to make
purchases totaling, or otherwise pay to Incyte pursuant to this Section 4.2, an
aggregate of Two Million Seven Hundred Thousand Dollars (US$2,700,000) prior to
the third (3rd) anniversary of the Effective Date, then ELITRA shall pay to
Incyte on such third (3rd) anniversary of the Effective Date an amount in cash
equal to the difference between Two Million Seven Hundred Thousand Dollars
(US$2,700,000) and the total dollar amount previously paid to Incyte pursuant to
this Section 4.2 (whether for products, databases and/or services or pursuant to
subsections (a) and/or (b) above).
EXHIBIT G attached hereto sets forth a list of the products, databases and/or
services made commercially available by Incyte as of the Effective Date that
ELITRA may elect to purchase under this Section 4.2, together with the prices at
which such products, databases and/or services are being commercially offered as
of the Effective Date. Incyte further agrees to make available to ELITRA under
the provisions of this Section 4.2 future products, databases and/or services
that Incyte makes commercially available on a non-exclusive basis to third
parties until the third (3rd) anniversary of the Effective Date. Without
limiting the generality of the foregoing, ELITRA shall be entitled to apply
purchases of consulting services pursuant to Section 2.5.2 towards its
obligations under this Section 4.2. With respect to any purchase of products
and/or services made by ELITRA under this Section 4.2, Incyte shall charge
ELITRA the same price and other applicable terms, taken as a whole, as are then
being offered by Incyte to its third-party customers for substantially similar
products or services, taken as a whole, as applicable, and Incyte agrees to use
commercially reasonable efforts to price such products, databases and/or
services, taken as a whole, at a level competitive with similar products or
services, as applicable, being offered by third parties.
4.3 PATHOSEQ-TM- DATABASE SUBSCRIBER PAYMENTS AND LIFETOOLS-TM-
PRODUCT REFERRAL PAYMENTS.
*CONFIDENTIAL TREATMENT REQUESTED
13.
4.3.1 At least [... *** ...] in advance of the expiration
date of each PathoSeq-TM- Database Agreement, Incyte shall provide written
notice to the applicable PathoSeq-TM- Database Customer of the expiration date
of such PathoSeq-TM- Database Customer's subscription to the PathoSeq-TM-
Database, which notice shall also inform such PathoSeq-TM- Database Customer
that any renewal to such PathoSeq-TM- Database Agreement must be obtained
through ELITRA and shall contain contact information for ELITRA consistent with
the notice provisions of this Agreement. ELITRA shall pay to Incyte:
(a) [... *** ...] of any revenues received by
ELITRA under PathoSeq-TM- database agreements entered into during the [... ***
...] following the Effective Date from each PathoSeq-TM- Database Customer that
obtains continued access to the PathoSeq-TM- Database from ELITRA prior to or
upon expiration of the applicable PathoSeq-TM- Database Agreement;
(b) [... *** ...] of any revenues received by
ELITRA under PathoSeq-TM- database agreements entered into during the
[... *** ...] following the Effective Date from each PathoSeq-TM- Database
Customer that obtains continued access to the PathoSeq-TM- Database from
ELITRA after expiration of the applicable PathoSeq-TM- Database Agreement; and
(c) [... *** ...] of any revenues received by
ELITRA under PathoSeq-TM- database agreements entered into during the [... ***
...] following the Effective Date from subscribers other than the PathoSeq-TM-
Database Customers who obtain access to the PathoSeq-TM- Database from ELITRA.
Provided that the product being sold by ELITRA in subsections (a) through (c)
above is the same as the product being released by Incyte to PathoSeq-TM-
Database Customers and during the period that Incyte provides the PathoSeq-TM-
Database to PathoSeq-TM- Database Customers, Incyte agrees to provide ELITRA
with the disks for distribution of such product to third parties who have signed
an agreement with ELITRA for access to the PathoSeq-TM- Database as provided in
this Section 4.3.1.
4.3.2 With respect to each license of the LifeTools-TM-
Product by Incyte to ELITRA's subscribers of the PathoSeq-TM- Database who are
referred to Incyte by ELITRA for the purposes of licensing the LifeTools-TM-
Product (or any updated or enhanced versions of the LifeTools-TM- Product with
substantially similar capabilities), Incyte shall pay to ELITRA [... *** ...] of
the amount of the license fee received by Incyte with respect to such licenses
entered into during the [... *** ...] following the Effective Date; PROVIDED,
HOWEVER, that nothing contained in this subsection shall be construed as
obligating Incyte to continue to market and commercially sell the LifeTools-TM-
Product nor shall anything in this subsection be construed as Incyte providing
ELITRA with the right to sublicense the LifeTools-TM- Product. In the event that
Incyte determines to cease making the LifeTools-TM- Product commercially
available, Incyte shall promptly provide written notice thereof to ELITRA, and
ELITRA shall, for a period of [... *** ...] from such notice, have the right to
elect to sublicense the LifeTools-TM- Product to ELITRA's subscribers of the
PathoSeq-TM- Database. If ELITRA exercises such election, Incyte shall grant
ELITRA the right to sublicense the LifeTools-TM- Product to ELITRA's subscribers
of the PathoSeq-TM- Database. Except as provided below, no other payments will
be
*CONFIDENTIAL TREATMENT REQUESTED
14.
required from ELITRA for such sublicensing right. ELITRA shall pay to Incyte
[... *** ...] of the amount received by ELITRA with respect to such sublicenses
which are entered into during the [... *** ...] following the expiration of such
[... *** ...] period. In the event ELITRA obtains the right to sublicense the
LifeTools-TM- Product to ELITRA's subscribers of the PathoSeq-TM- Database
pursuant to the preceding sentence, Elitra's right to sublicense and all such
sublicenses shall contain reasonable terms to be mutually agreed upon between
the parties.
All payments under this Section 4.3 shall be made in U.S. dollars to a
bank account designated in writing by the Party entitled to such payments and
shall be calculated and reported for each calendar quarter. All payments due
hereunder shall be paid within 30 days of the end of each calendar quarter. Each
such payment shall be accompanied by a report of revenues from subscriptions to
the PathoSeq-TM- Database or licenses to the LifeTools-TM- Product by ELITRA's
PathoSeq-TM- Database customers, as applicable, in sufficient detail to permit
confirmation of the accuracy of the payment made. Each Party shall keep complete
and accurate records pertaining to revenues from subscriptions to the
PathoSeq-TM- Database or licenses to the LifeTools-TM- Product by ELITRA's
PathoSeq-TM- Database customers, as applicable, in sufficient detail to permit
the other Party to confirm the accuracy of payments due hereunder. Each Party
shall have the right to cause an independent, certified public accountant to
audit such records to confirm such payments prior to the fourth (4th)
anniversary of the Effective Date. Prompt adjustments shall be made by the
Parties to reflect the results of such audit. The Party causing such audit shall
bear the full cost of such audit unless such audit discloses a variance of more
than 5% from the amount of the payments due hereunder, in which case the audited
Party shall bear the full cost of such audit.
4.4 INCYTE INVESTMENT IN ELITRA.
4.4.1 PARTICIPATION IN NEXT PREFERRED STOCK FINANCING. At
ELITRA's election, Incyte shall purchase in ELITRA's next private placement of
equity securities with arm's-length financial investors (the "Private
Placement") the lesser of (a) Two Million Dollars (US$2,000,000) of shares of
ELITRA's Preferred Stock or (b) ten percent (10%) of the total shares being
offered in such Private Placement. Shares purchased by Incyte will be purchased
at the same price and on the same terms as ELITRA shares offered to other
participating investors in such Private Placement. Shares purchased by Incyte
must be priced at the same price as ELITRA shares offered to other participating
investors in such Private Placement. Incyte shall execute the stock purchase
agreement and related agreements executed by the other arm's-length financial
investors in such Private Placement. Incyte's obligations under this Section
4.4.1 are conditioned upon such Private Placement closing within twelve (12)
months of the Effective Date of this Agreement.
4.4.2 PRIVATE PLACEMENT CONCURRENT WITH ELITRA IPO. In the
event that ELITRA undertakes an initial public offering of its Common Stock (the
"IPO"), then, at ELITRA's election, Incyte shall purchase, in a private
placement to close simultaneously with the completion of the IPO, an amount
equal to the lesser of (i) Five Million Dollars (US$5,000,000) of shares of
ELITRA's Common Stock or (ii) an amount equal to fifteen percent (15%) of the
total number of shares being sold in the IPO (excluding shares that may be sold
pursuant to the exercise of the underwriters' overallotment option), in either
case, at the price per
*CONFIDENTIAL TREATMENT REQUESTED
15.
share to the public in the IPO. Incyte's obligations under this Section 4.4.2
are conditioned upon:
(a) a minimum of Fifteen Million Dollars (US
$15,000,000) being raised by such IPO; and
(b) such IPO must close within twenty-four (24)
months of the Effective Date of this Agreement.
4.5 SHIPPING. Incyte shall pay any shipping, freight, mailing
expenses and the like payable to third parties not affiliated with Incyte and
arising out of obtaining Microbial Information and related Documentation under
this Agreement and the transactions contemplated herein.
4.6 PAYMENTS AND TAXES. Unless otherwise provided in this
Agreement, ELITRA agrees to submit payments within thirty (30) days from receipt
of invoice and all payments hereunder shall be made by bank wire transfer in
immediately available funds to such account as Incyte shall designate before
such payment is due.
Incyte shall bear and pay any sales taxes and use taxes, if any, that
may become payable in connection with this Agreement, the Technology License
Agreement, and the Microbial Dataflow Agreement; PROVIDED, HOWEVER, that Incyte
shall not be obligated to pay any taxes arising that may become payable in
connection with Section 4.2 from a subsequent transfer of the Microbial
Information, or any such products or services to any third party including
ELITRA's affiliates.
Unless otherwise provided in this Agreement, if a Party (the
"Withholding Party") is required by any government authorities to withhold any
tax on the amounts payable to the other Party under this Agreement, the
Withholding Party shall be allowed to do so, and shall in such case remit
payments to the other Party net of such withheld amount, provided that the
Withholding Party furnishes the other Party with proof of payment of such
withholdings as soon as practicable after such withholding in order that such
other Party may use the withholding tax paid as a tax credit, provided that all
access fees to be paid by ELITRA to Incyte under Section 4.1 of this Agreement
shall be paid by ELITRA from the United States, and in the event that ELITRA
assigns this Agreement in accordance with 8.2 hereof ELITRA or its assignee
shall be responsible for the payment of such withholding tax in relation to
access fees paid to Incyte under Section 4.1 of this Agreement.
4.7 LATE PAYMENTS. Any amounts payable hereunder which are not
paid when due shall bear interest, to the extent permitted by applicable law, at
two percentage points over the prime rate of interest as reported by Bank of
America NT&SA in San Francisco, California, from time to time, calculated on the
number of days such payment is delinquent.
5. TERMINATION OF LICENSES; DISPUTE RESOLUTION.
5.1 TERMINATION OF LICENSES FOR BREACH. Failure by either Party
(the "breaching Party") to comply with any of its material obligations under
this Agreement shall entitle the other Party (the "non-breaching Party") to give
to the breaching party written notice specifying the
16.
nature of the default and requiring it to cure such default. If such default is
not cured within sixty (60) days after the receipt of such notice, the
non-breaching Party shall be entitled (subject to the provisions of Section
5.3), without prejudice to any of its other rights conferred on it by this
Agreement, in addition to any other remedies available to it by law or in
equity, immediately to terminate this Agreement. The right of a Party to
terminate this Agreement shall not be affected in any way by its waiver or
failure to take action with respect to any previous default.
5.2 EFFECT OF TERMINATION.
5.2.1 BY INCYTE. Subject to the provisions of Section 5.3,
in the event of termination of this Agreement by Incyte for breach by ELITRA
pursuant to Section 5.1, then the licenses granted by Incyte to ELITRA hereunder
shall terminate and all right, title and interest to the Microbial Information,
the LifeTools-TM- Product, the Common Code, the Patent Search Module, the
Microbial Dataflow Software and the Linux Farm Technology, shall revert to
Incyte, and it shall be ELITRA's obligation, at its expense, to discontinue use
of the Microbial Information, the LifeTools-TM- Product, the Common Code, the
Patent Search Module, the Microbial Dataflow Software and the Linux Farm
Technology, and remove the Microbial Information, the LifeTools-TM- Product, the
Common Code, the Patent Search Module, the Microbial Dataflow Software and the
Linux Farm Technology, from each designated CPU, and promptly return any copies
thereof to Incyte, or upon Incyte's written instruction, destroy all portions
and copies of the Microbial Information, the LifeTools-TM- Product, the Common
Code, the Patent Search Module, the Microbial Dataflow Software and the Linux
Farm Technology, and thereafter relinquish its rights to the Microbial
Information, the LifeTools-TM- Product, the Common Code, the Patent Search
Module, the Microbial Dataflow Software and the Linux Farm Technology, including
any rights to use, copy, modify, adapt or create derivative works with respect
to same.
5.2.2 BY ELITRA. Subject to the provisions of Section 5.3,
in the event of termination of this Agreement by ELITRA for breach by Incyte
pursuant to Section 5.1, then the licenses granted by ELITRA to Incyte
hereunder, with the exception of the license(s) required to fulfill Incyte's
obligations to PathoSeq-TM- Database Customers under the PathoSeq-TM- Database
Agreements, shall terminate.
5.3 DISPUTE RESOLUTION PROCEDURES. If the Parties cannot resolve a
dispute arising out of or in connection with this Agreement, then any Party may,
by written notice to the other, have such dispute referred to their respective
officers designated below or their respective successors, for attempted
resolution by good faith negotiations within 30 days after such notice is
received:
For Incyte: President
For ELITRA: President
Any such dispute which is not so resolved between the Parties or the designated
officers of the Parties within such 30 day period shall, upon written notice
from a Party to the other, be resolved by final and binding arbitration under
the then current Licensing Agreement Arbitration Rules of the American
Arbitration Association ("AAA"). If the claim is filed by a Party, the venue for
17.
arbitration shall be proximate to that of the other Party. The arbitration shall
be conducted by a panel of three arbitrators who are knowledgeable in the
subject matter which is at issue in the dispute (the "PANEL"). Each Party shall
have the right to appoint one member of the Panel, with the third member to be
mutually agreed by the two Panel members appointed by the Parties, or, failing
such agreement, shall be selected according to the AAA rules. In conducting the
arbitration, the Panel shall determine what discovery will be permitted,
consistent with the goal of limiting the cost and time which the Parties must
expend for discovery (and provided that the Panel shall permit such discovery
deemed necessary to permit an equitable resolution of the dispute). The decision
of the Panel shall be in writing and shall set forth the basis therefor. The
Parties shall abide by all awards rendered in arbitration proceedings, and such
awards may be enforced and executed upon in any court having jurisdiction over
the Party against whom enforcement of such award is sought. The Panel shall also
determine the steps, if any, that a Party should take to correct any failure or
breach by such Party pertaining to any such dispute. The Parties shall share
equally the Panel's fees and expenses. The decision of the Panel shall be final
and may be enforced by the Party in whose favor it runs in any court of
competent jurisdiction at the option of such Party. Nothing in this Agreement
shall be deemed to prevent either Party from seeking injunctive relief (or any
other provisional remedy) from any court having jurisdiction over the Parties
and the subject matter of the dispute as necessary to protect either Party's
intellectual property rights.
5.4 ACCRUED RIGHTS; SURVIVING OBLIGATIONS. Termination of this
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of either Party prior to such termination. Upon any
termination of this Agreement, the following provisions will not terminate, but
will continue in full force and effect: Sections 2.1 through 2.3 of Article 2
(Sale of Microbial Information; Licenses), except as otherwise provided in
Section 5.2; Sections 3.1 and 3.2 of Article 3 (Third Party Intellectual
Property); Article 5 (Termination of Licenses; Dispute Resolution); Section 6.4
(Disclaimers); Article 7 (Indemnity); Article 8 (Miscellaneous Provisions); and
any payment obligations pursuant to ELITRA's rights which have become due and
payable under the appropriate sections of this Agreement prior to the
termination or expiration of this Agreement.
6. REPRESENTATIONS AND WARRANTIES; COVENANTS.
6.1 REPRESENTATIONS AND WARRANTIES OF INCYTE. Incyte represents
and warrants to ELITRA as follows:
(a) Incyte has full corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Incyte. This Agreement has been duly executed
and delivered by Incyte and constitutes a valid and binding obligation of
Incyte, enforceable against it in accordance with its terms.
(b) Neither the execution, delivery nor
performance of this Agreement by Incyte will conflict with or result in the
breach of any agreement to which Incyte is a party or any instrument, document,
law, regulation, judgment, order or decree by which it or its assets are bound.
18.
(c) There are no material adverse proceedings,
claims or actions pending, or to the best of Incyte's knowledge, threatened,
relating to the Microbial Information or the PathoSeq-TM- Database Agreements as
of the Effective Date of this Agreement which would materially interfere with
Incyte's performance of its obligations under this Agreement. Further, Incyte
shall disclose to ELITRA any material adverse proceedings, claims or action that
arise and come to the knowledge of Incyte without undertaking a special
investigation, relating to the Microbial Information or the PathoSeq-TM-
Database Agreements, which would materially interfere with Incyte's performance
of its obligations under this Agreement. Incyte agrees to use its commercially
reasonable efforts to discharge its obligations under the PathoSeq-TM- Database
Agreements in a manner that will not adversely affect ELITRA or its business as
it relates to the Microbial Information.
(d) Except for rights granted under the
PathoSeq-TM- Database Agreements, the [... *** ...]. Incyte is [... *** ...].
Except as set forth on Schedule 3.1, Incyte is [... *** ...].
(e) Incyte requires [... *** ...] and
requiring [... *** ...] made within the [... *** ...] pursuant to
[... *** ...].
(f) For a period of [... *** ...] after
[... *** ...] are provided to [... *** ...]. This warranty does not apply to
[... *** ...].
(g) For a period of [... *** ...], Incyte
warrants that [... *** ...]. Incyte will, [... *** ...] Any such [... *** ...].
(h) The term [... *** ...] means any
[... *** ...] to (a) [... *** ...] or (b) [... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
19.
[... *** ...]. Incyte represents and warrants that [... *** ...]. Without
limiting this warranty, [... *** ...] will use a [... *** ...]. ELITRA
acknowledges that [... *** ...]. Incyte's sole obligation if [... *** ...]
will be to [... *** ...].
(i) The [... *** ...] provided by
[... *** ...] on the [... *** ...] of this Agreement includes [... *** ...].
The foregoing [... *** ...].
6.2 REPRESENTATIONS AND WARRANTIES OF ELITRA. ELITRA represents
and warrants to Incyte as follows:
(a) ELITRA has full corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of ELITRA. This Agreement has been duly executed
and delivered by ELITRA and constitutes a valid and binding obligation of
ELITRA, enforceable against it in accordance with its terms.
(b) Neither the execution, delivery nor
performance of this Agreement by ELITRA will conflict with or result in the
breach of any agreement to which ELITRA is a party or any instrument, document,
law, regulation, judgment, order or decree by which it or its assets are bound.
6.3 COMPLIANCE WITH LAW. Each Party shall be responsible for
compliance with all applicable product safety, product testing, product
labeling, package marking, and product advertising laws and regulations with
respect to its own activities and commercial products and services. Further,
ELITRA and Incyte shall each comply with the regulations of the United States
and any other relevant jurisdiction concerning any export or other transfer of
technology, services, or products.
6.4 DISCLAIMERS.
(a) EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, INCYTE DOES NOT MAKE ANY AND EXPRESSLY DISCLAIMS ALL
*CONFIDENTIAL TREATMENT REQUESTED
20.
WARRANTIES WITH RESPECT TO THE TRANSFERRED INFORMATION WHETHER ORAL OR WRITTEN,
EXPRESS OR IMPLIED, OR ARISING BY USAGE OF TRADE OR COURSE OF DEALING INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
(b) EXCEPT AS EXPLICITLY STATED HEREIN, NEITHER
PARTY WILL BE LIABLE FOR ECONOMIC, INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL
OR EXEMPLARY DAMAGES, WHETHER CLAIMED UNDER CONTRACT, TORT OR ANY OTHER LEGAL
THEORY ARISING FROM SUCH PARTY'S ACTIVITIES UNDER THIS AGREEMENT.
7. INDEMNITY.
7.1 INDEMNIFICATION BY INCYTE. Incyte shall indemnify and hold
ELITRA and its directors, officers, employees, agents, representatives and
affiliates harmless from and against any loss, liability, cost or expense
(including, but not limited to, reasonable attorneys' fees and costs) arising
from (i) [... *** ...], (ii) [... *** ...], (iii) [... *** ...], (iv)
[... *** ...], or (v) [... *** ...]; except to the extent such loss,
liability, cost or expense (including attorney's fees and costs) is
attributable to: (a) a violation of law, regulation or court order by ELITRA,
(b) a violation of any contractual or fiduciary duty (including
misappropriation of trade secrets) owed by ELITRA to a third party, (c)
recklessness or intentional misconduct of ELITRA, (d) any breach of this
Agreement or misrepresentation contained herein by ELITRA, or (e)
infringement by ELITRA (other than by use of the Microbial Information or the
Microbial Dataflow Software or any portion thereof) of any third party's
patent rights, copyrights or other intellectual property rights.
7.2 INDEMNIFICATION BY ELITRA. ELITRA shall indemnify and hold
Incyte and its directors, officers, employees, agents, representatives and
affiliates harmless from and against any loss, liability, cost or expense
(including, but not limited to, reasonable attorneys' fees and costs) arising
from (i) [... *** ...], (ii) [... *** ...] or (iii) [... *** ...]; except to
the extent such loss liability, cost or expense (including attorney's fees
and costs) is attributable to: (a) a violation of law, regulation or court
order by Incyte, (b) a violation of any contractual or fiduciary duty
(including misappropriation of trade secrets) owed by Incyte to a third
party, (c) recklessness or intentional misconduct of Incyte, (d) any breach
of this Agreement or misrepresentation contained herein by Incyte, or (e)
infringement by Incyte of any third party's patent rights, copyrights or
other intellectual property rights.
*CONFIDENTIAL TREATMENT REQUESTED
21.
7.3 PROCEDURES. If any claim is made against either Party under
Sections 7.1 or 7.2 above for which indemnification is available hereunder, the
indemnifying Party, at its option, shall:
(i) defend the other Party against such
claim;
(ii) acquire for the other Party the
right to continue using any Software or product licensed hereunder that is the
subject of such claim;
(iii) replace any Software or product
licensed hereunder with other Software or product for which there exists no
infringement claim, which serves materially the same purpose and function as the
claimed infringing Software or product; or
(iv) modify the Software or product to
make it non-infringing;
PROVIDED, HOWEVER, that no Party shall have any liability or obligation to the
other under this Section 7.3 if any such infringement claim is based upon or
arises out of:
(a) any modification by the indemnified Party of any
portion of any Software or data not authorized by the indemnifying Party in
writing unless without such modifications the Software would be infringing;
(b) the use of the any Software or product in violation
of the license granted in this Agreement; or
(c) a patent, copyright or other intellectual property
right claim in which the indemnified Party or any affiliate thereof has any
direct or indirect interest by license or otherwise; or
(d) use of old Software after receipt or replacement of
modified Software under (iii) or (iv) above.
If the indemnifying Party elects (i) above, the indemnifying Party, at its
expense, shall have the right to control the defense and settlement of any such
claim and the indemnified Party shall reasonably cooperate with the indemnifying
Party, at the indemnifying Party's expense, in such defense and settlement. If
the indemnifying Party elects (iii) above, the indemnified Party shall return to
the indemnifying Party the claimed infringing Software or product, along with
any copies, duplicates and other manifestations thereof in whatever form.
This Section 7.3 states a Party's entire liability and obligation, and the other
Party's exclusive remedy, for infringement with respect to the first Party's
software.
8. MISCELLANEOUS PROVISIONS.
8.1 NO PARTNERSHIP. Nothing in this Agreement is intended or shall
be deemed to constitute a partnership, agency, distributorship,
employer-employee or joint venture relationship between the Parties. No Party
shall incur any debts or make any commitments for the other, except to the
extent, if at all, specifically provided herein.
22.
8.2 ASSIGNMENTS. Neither Party shall assign any of its rights
or obligations hereunder except: (i) [... *** ...]; (ii) [... *** ...]; (iii)
[... *** ...]; or (iv) [... *** ...]. This Agreement shall be binding upon
the successors and permitted assigns of the Parties. Any assignment not in
accordance with the above shall be void. To the extent that any assignment by
ELITRA hereunder would directly result in an increase in any withholding
taxes for which Incyte is responsible under this Agreement, ELITRA shall be
responsible for such additional taxes.
8.3 NO TRADEMARK. Except as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the names
"INCYTE" or "ELITRA", or any other trade name or trademark of Incyte or ELITRA
or their affiliates in connection with the performance of this Agreement.
8.4 PUBLIC ANNOUNCEMENTS. Except as may otherwise be required by
law or regulation, neither Party shall make any public announcement concerning
this Agreement or the subject matter hereof without the prior consent of the
other Party, such consent not to be unreasonably withheld. If this Agreement is
determined to be material to the business of Incyte (or ELITRA) so that its
disclosure is required by law or regulation, ELITRA (or Incyte) shall have the
right to review and comment of the text of the disclosure prior to its release
to the public. Notwithstanding the foregoing, the Parties agree to issue a joint
press release in substantially the form attached hereto as EXHIBIT H (the "JOINT
PRESS RELEASE") announcing the execution of this Agreement within thirty (30)
days of the Effective Date (as mutually agreed by the Parties) and to coordinate
and cooperate with each other, to the extent commercially reasonable, to obtain
maximum benefit to the Parties with respect to the marketing of the transactions
contemplated hereby. The Parties agree to consult with each other reasonably and
in good faith with respect to the timing of such press release, and neither
Party shall issue any other press release or other public statement regarding
this Agreement or the subject matter hereof that is in any manner inconsistent
with the Joint Press Release without the prior written consent of the other
Party, provided that either Party may issue such press releases as it
determines, based on the written advice of counsel, are reasonably necessary to
comply with laws or regulations or for appropriate market disclosure. In
addition, following the issuance of the Joint Press Release, either Party shall
be free to disclose, without the other Party's prior written consent and to the
extent consistent with the Joint Press Release, the existence of this Agreement,
the identity of the other party and those terms of the Agreement which have
already been publicly disclosed in the Joint Press Release.
8.5 ENTIRE AGREEMENT OF THE PARTIES; AMENDMENTS. This Agreement
and the other agreements between the Parties of even date herewith constitute
and contain the entire
*CONFIDENTIAL TREATMENT REQUESTED
23.
understanding and agreement of the Parties and cancel and supersede any and all
prior negotiations, correspondence, representations, understandings and
agreements, whether verbal or written, between the Parties respecting the
subject matter hereof, including, without limitation, the Prior Agreement and
all financial obligations of ELITRA to Incyte thereunder (whether or not accrued
as of the Effective Date hereof); PROVIDED, HOWEVER, that the Confidential
Disclosure Agreement between the Parties dated March 31, 2000 shall remain in
full force and effect in accordance with its terms. No waiver, modification or
amendment of any provision of this Agreement shall be valid or effective unless
made in writing and signed by a duly authorized officer of each of the Parties.
8.6 APPLICABLE LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California, without
reference to the conflicts of law principles thereof. The parties expressly
exclude application of the United Nations Convention for the International Sale
of Goods.
8.7 NOTICES AND DELIVERIES. Any notice, requests, delivery,
approval or consent required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been sufficiently given if delivered
in person, transmitted by commercial overnight courier, or transmitted by telex
telegram or telecopy (facsimile, with confirmed receipt) to the Party to whom it
is directed at its address shown below or such other address as such Party shall
have last given by notice to the other Party (referred to herein as "NOTICE").
All notices shall be effective upon receipt.
If to Incyte, addressed to:
Incyte Genomics, Inc.
3160 Porter Drive
Palo Alto, CA 94304
Fax: (650) 845-4574
Attn: Roy Whitfield, Chief Executive Officer
If to ELITRA, addressed to:
ELITRA Pharmaceuticals
3510 Dunhill Street
San Diego, CA 92121
Fax: (858) 410-3810
Attn: Harry Hixson, Ph.D., Chief Executive Officer and
Chairman
8.8 AFFILIATE PERFORMANCE. To the extent that any ELITRA Affiliate
has access to the Microbial Dataflow Software, has the right to receive any
other rights or benefits under this Agreement or otherwise is obligated to
perform any obligations under this Agreement, ELITRA shall cause such ELITRA
Affiliate to perform in full, when due, all applicable obligations under this
Agreement to the same extent as if such ELITRA Affiliate were a party to this
Agreement; provided, however, that nothing in this Section 8.8 shall expand the
rights or benefits of ELITRA or ELITRA Affiliates, or the obligations of Incyte,
beyond those otherwise expressly set forth in this Agreement. ELITRA shall
guaranty timely performance in full by such ELITRA Affiliate of
24.
all such obligations. A breach by such ELITRA Affiliate of any such obligation
shall constitute a breach by ELITRA of this Agreement.
8.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
25.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the Effective Date.
INCYTE GENOMICS, INC.
By: /s/ Randy Scott
-------------------------------------
Name: Randy Scott
-----------------------------------
Title: President
----------------------------------
Date: 6/30/00
-----------------------------------
ELITRA PHARMACEUTICALS INC.
By: /s/ Harry F. Hixson, Jr.
-------------------------------------
Name: Harry F. Hixson, Jr.
-----------------------------------
Title: Chief Executive Officer
----------------------------------
Date: 6/30/00
-----------------------------------
26.
EXHIBIT A
INCYTE ISSUED PATENTS
MICROBIAL DATAFLOW AND USER INTERFACE
[... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
A-1
[... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
A-2
EXHIBIT B
INCYTE ISSUED PATENTS
INCYTE PROPRIETARY PROGRAMS
[... *** ...]
B-1 *CONFIDENTIAL TREATMENT REQUESTED
[... *** ...]
B-2 *CONFIDENTIAL TREATMENT REQUESTED
[... *** ...]
B-3 *CONFIDENTIAL TREATMENT REQUESTED
[... *** ...]
B-4 *CONFIDENTIAL TREATMENT REQUESTED
[... *** ...]
B-5 *CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
PATHOSEQ-TM- DATABASE
[... *** ...].
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C-1
PATHOSEQ-TM- DATABASE SOURCE CODE
[... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
[... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
PATHOSEQ-TM- DATABASE AGREEMENTS
AGREEMENT EXPIRATION DATE
CLIENT (MONTH/YEAR)
----------------------- ---------------------------------
[... *** ...]
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT E
STOCK PURCHASE AGREEMENT
(See Exhibit 10.12 attached hereto)
EXHIBIT F
INVESTOR RIGHTS AGREEMENT
(See Exhibit 10.13 attached hereto)
EXHIBIT G
INCYTE PRODUCTS, SERVICES AND DATABASES
COMMERCIALLY AVAILABLE INCYTE PRODUCTS AND LIST PRICING AS OF JUNE 2000
PRODUCT/SERVICE/DATABASE LIST PRICE
- ------------------------ ----------
LifeSeq-Registered Trademark- Gold Database $[... *** ...]
ZooSeq-TM- Database $[... *** ...]
LifeExpress-TM- Database $[... *** ...]
(RNA and Protein Expression for both
Target ID and Lead Optimization,
including the OGS Proteomics Information)
Gene Expression Microarrays(GEM-TM-), $[... *** ...]
including staphylococcus aureus and
candida albicans microarrays
Custom SNP Discovery $[... *** ...]
(human)
Incyte Contract Sequencing Library Construction:
[... *** ...]
Pilot:
[... *** ...]
Sequencing:
[... *** ...]
Additional copies of CDs $[... *** ...]
Additional copies of manuals $[... *** ...]
ALL PRICING SUBJECT TO CHANGE
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT H
JOINT PRESS RELEASE
INCYTE AND ELITRA ANNOUNCE
ANTIMICROBIAL GENOMICS COLLABORATION
SAN DIEGO, CA, JUNE XX, 2000 -- Elitra Pharmaceuticals, Inc., a leader in
antimicrobial drug discovery and development, and Incyte Genomics, Inc. (Nasdaq:
INCY), a leading genomic information company, announced today a collaboration in
the field of antimicrobial genomics. Under the collaboration, Incyte will
provide Elitra an exclusive license to Incyte's PathoSeq-TM- microbial sequence
database technologies to use as a platform for its functional genomics programs.
In addition, Elitra will obtain the right to market and sell the PathoSeq
database to third parties in collaboration with Incyte. Elitra's right and
license are subject to certain rights retained by Incyte and Incyte's customers,
including rights and obligations in all existing PathoSeq agreements. As part of
the collaboration, Incyte will receive equity in Elitra. Financial terms were
not disclosed.
"We believe Elitra's technology offers substantial advantages in antimicrobial
genomics and drug discovery," said Roy A. Whitfield, Chief Executive Officer of
Incyte. "This combined technology platform provides an unparalleled combination
for antimicrobial drug discovery, and will expand our investment in the field of
antimicrobial functional genomics. The Agreement is part of Incyte's strategy to
provide broad access to its genomic data and technologies."
Under the terms of the agreement, Elitra will obtain the right to integrate
PathoSeq's microbial sequence information and database technology using source
code developed by Incyte with its own proprietary functional genomics
information for the identification of essential gene drug targets. Essential
genes in pathogens are those required for growth and survival and therefore make
ideal antimicrobial drug targets. Elitra will use the database to develop
antimicrobial drugs both internally and in collaboration with corporate
partners. To date, Elitra has identified over 800 such essential gene drug
targets in pathogenic organisms.
"Elitra's primary purpose is to leverage this combination and create the world's
premier antimicrobial functional genomics company," said Harry F. Hixson,
Chairman and Chief Executive Officer of Elitra. "We will benefit from Incyte's
many years of product development and investment in PathoSeq by using this
platform to build our proprietary informatic programs. This alliance fits very
well with our vision of being a leader in both antimicrobial functional genomics
and antimicrobial drug discovery and development."
In the field of antimicrobial functional genomics, scientists analyze the
genetic structure of disease-causing microorganisms to identify safer, more
effective and targeted treatments of disease. The PathoSeq database currently
contains genomic information for over 60 bacterial and fungal microorganisms
integrated with Incyte's powerful bioinformatics software. The high quality,
in-depth microbial sequence information found in PathoSeq is extremely useful
for investigating pathogenic organisms and their impact on antibiotic drug
discovery.
Elitra is a leader in antimicrobial functional genomics and is focused on the
identification, development and commercialization of novel antimicrobial
compounds that target essential gene products of pathogenic organisms. The
Company employs ultra-rapid proprietary techniques for the identification of
novel microbial essential gene drug targets and high throughput chemical
screening against those targets.
Incyte Genomics, Inc. is the leading provider of an integrated platform of
genomic technologies designed to aid in the understanding of the molecular basis
of disease. Incyte develops and markets genomic databases and partnership
programs, genomic data management software, microarray-based gene expression
services, related reagents and services. These products, programs and services
assist pharmaceutical and biotechnology researchers with all phases of drug
discovery and development including gene discovery, understanding disease
pathways, identifying new disease targets and the discovery and correlation of
gene sequence variation to disease. For more information, visit Incyte's web
site at www.incyte.com.