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EXHIBIT 10.37
COMPOUND DISCOVERY COLLABORATION AGREEMENT
This Research Collaboration and License Agreement (this "AGREEMENT")
is entered into as of December 18, 2000 (the "EFFECTIVE DATE") by and between
ArQule, Inc. ("ARQULE"), a Delaware corporation, and ACADIA Pharmaceuticals,
Inc. ("ACADIA"), a Delaware corporation.
RECITALS
WHEREAS, ArQule and ACADIA previously entered into a Material
Transfer and Screening Agreement dated April 7, 1998 (the "MTA") pursuant to
which ArQule delivered certain of its Mapping Array(TM) compounds to ACADIA, and
ACADIA screened those compounds against certain of its targets;
WHEREAS, ACADIA detected activity of certain ArQule compounds
against certain ACADIA targets; and
WHEREAS, pursuant to the terms of the MTA, ArQule and ACADIA have
negotiated this Agreement to expand their joint research activities and to
pursue further development of the active compounds discovered by ACADIA.
NOW, THEREFORE, ArQule and ACADIA hereby agree as follows:
1. DEFINITIONS.
1.1 "ACADIA TARGET" means each biological target nominated by ACADIA,
accepted by ArQule, and selected by the Research Committee for use in the
Collaboration, as further described in Subsection 3.3.1. below.
1.2 "ACTIVE COMPOUND" means any ArQule Compound, Targeted Compound, or
Analog Compound which exhibits confirmed significant functional activity against
an ACADIA Target in a primary screen, as determined by the Research Committee.
1.3 "AFFILIATE" means any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by a party. For
the purposes of this definition, the term "control" means (i) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (ii) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or other business organization without voting securities.
1.4 "ANALOG COMPOUND" means a chemical compound that (i) exhibits *****
to an identified Active Compound or Targeted Compound, (ii) was discovered or
developed using information obtained by screening one or more Active Compounds
or Targeted Compounds, or (iii) was ***** parent ArQule Compound or Targeted
Compound *****.
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1.5 "ARQULE COMPOUND" means a small organic chemical molecule in a
Mapping Array Set, Compass Array Set, or Biased Array Set (as described in the
Collaboration Plan) and provided by ArQule to ACADIA as directed by the Research
Committee under this Agreement or previously provided to ACADIA under the MTA.
1.6 "AVAILABLE COMPOUND" means an ArQule Compound or Analog Compound
that is neither: (i) licensed or otherwise committed by ArQule or ACADIA to a
third party in the Field nor (ii) committed to an internal ArQule or ACADIA
program in the Field. In addition, all Targeted Compounds are Available
Compounds. "AVAILABLE ACTIVE COMPOUND" means an Active Compound that is also an
Available Compound.
1.7 "AVAILABLE TARGET" means an ACADIA Target that is neither: (i)
licensed or otherwise committed by ACADIA or ArQule to a third party in the
Field nor (ii) committed to an internal ACADIA or ArQule program in the Field.
1.8 "COLLABORATION" means the activities of ACADIA and ArQule carried
out in performance of, and the relationship, rights and obligations of the
parties established by, Articles 2 and 3 of this Agreement.
1.9 "COLLABORATION PLAN" means the overall plan for research and
development activities for typical projects in the Collaboration, as set forth
on EXHIBIT A. The Steering Committee may modify the Collaboration Plan as needed
to advance the goals of the Collaboration.
1.10 "COLLABORATION PRODUCT" means any product containing as one of its
constituents any Committed Compound or any Analog Compound based on a Committed
Compound.
1.11 "COLLABORATION WORK PRODUCT" means, individually or collectively,
(i) any Committed Target or Committed Target Set and its corresponding Committed
Compounds or Committed Compound Set(s), GLP Toxicology Candidate, or IND
Candidate, as well as all Technology pertaining to any of the foregoing or the
manufacture, use or sale thereof, and (ii) all libraries of Targeted Compounds.
1.12 "COMMERCIALIZATION PLAN" means a plan developed and approved by the
Steering Committee for the sale, license, or other transfer of commercial rights
in Collaboration Work Product to a third party, as described in Section 3.7.
1.13 "COMMITTED COMPOUND" means (i) any Available Active Compound
designated by the Research Committee as a Committed Compound pursuant to
Subsection 3.4.2. and (ii) any Analog Compound developed by the parties in the
course of an optimization program as described in Section 3.5., provided that
such Analog Compound is an Available Compound as required under Section 3.5.
1.14 "COMMITTED COMPOUND SET" means a set of Committed Compounds that
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1.15 "COMMITTED TARGET" means any Available Target designated by the
Research Committee as a Committed Target pursuant to Subsection 3.4.2.
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1.16 "COMMITTED TARGET SET" means a set of Committed Targets that are so
closely related that the Research Committee has decided to group those Committed
Targets into one optimization program under Section 3.5. or allocation under
Subsection 9.6.2.
1.17 "CONFIDENTIAL INFORMATION" means any technical or business
information furnished by one party (the "DISCLOSING PARTY") to the other party
(the "RECEIVING PARTY") in connection with this Agreement. Such Confidential
Information may include, without limitation, the identity or use of a chemical
compound, the identity or use of a biological target, trade secrets, know-how,
inventions, technical data or specifications, testing methods, business or
financial information, research and development activities, Steering Committee
reports, Research Committee reports, royalty reports, product and marketing
plans, clinical development plans, and customer and supplier information.
1.18 "FIELD" means applications in *****.
1.19 "GLP TOXICOLOGY CANDIDATE" means a Committed Compound that meets or
exceeds the criteria established by the Research Committee for a compound that
is ready for submission to IND enabling toxicology studies, as documented in the
Research Plan.
1.20 "GROSS REVENUES" means the aggregate amount of consideration
received from a third party by either party in connection with an agreement to
commercialize any Collaboration Work Product, including without limitation
license fees, milestone payments, royalties, and the premium portion of equity
payments at a premium to fair market value, but excluding funds specifically
allocated to and actually used for the research and development of Collaboration
Work Product. Gross Revenues shall be calculated without deduction of any costs,
fees, or expenses (e.g., legal fees or finders fees) paid by a party in
connection with the transaction. To the extent that any Gross Revenues are
transferred to a party in a form other than cash, the amount of such Gross
Revenues payable to the other party shall be based on the fair market value of
such non-monetary consideration on the date of transfer, as determined in good
faith by the parties.
1.21 "IND" means an investigational new drug application filed with the
FDA prior to beginning clinical trials in humans or any comparable application
filed with the regulatory authorities of a country other than the United States,
prior to beginning clinical trials in humans in that country.
1.22 "IND CANDIDATE" means a Committed Compound that meets or exceeds the
criteria established by the Research Committee for a compound that is ready for
human clinical trials, including data sufficient to support the filing of an
IND, as documented in the Research Plan.
1.23 "PATENT RIGHTS" means any United States patent application and any
divisional, substitution, continuation, or continuation-in-part of such patent
application (to the extent the claims are directed to subject matter
specifically described therein) or inventor's certificate relating to such
patent application, as well as any patent issued thereon and any reissue,
reexamination, renewal, extension or term restoration of such patent, and any
foreign counterparts to such patents and patent applications. "ARQULE PATENT
RIGHTS" means Patent
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Rights that are either (i) assigned solely to ArQule, (ii) assigned jointly to
ArQule and a party other than ACADIA, or (iii) licensed to ArQule, in each case
to the extent that ArQule has the ability to license or sublicense the rights
required under this Agreement without payment to a third party. "ACADIA PATENT
RIGHTS" means Patent Rights that are either (i) assigned solely to ACADIA, (ii)
assigned jointly to ACADIA and a party other than ArQule, or (iii) licensed to
ACADIA, in each case to the extent that ACADIA has the ability to license or
sublicense the rights required under this Agreement without payment to a third
party. "JOINT PATENT RIGHTS" means Patent Rights (i) in Committed Compounds and
their use against Committed Targets; (ii) in Targeted Compounds and their uses;
or (iii) that are assigned to both ArQule and ACADIA as joint owners or are
otherwise jointly invented by one or more employees or consultants of ACADIA and
one or more employees or consultants of ArQule in connection with the
Collaboration.
1.24 "RESEARCH COMMITTEE" means the Research Committee described in
Section 2.1. The Research Committee manages and directs the research and
development activities in the Collaboration.
1.25 "RESEARCH MATERIALS" means any tangible research materials, whether
biological, chemical, physical, or otherwise. "PROPRIETARY RESEARCH MATERIALS"
means any Research Materials that a party designates as proprietary or
confidential, including without limitation (a) all ArQule Compounds, and (b) all
expressed proteins for ACADIA Targets provided by ACADIA in the Collaboration.
1.26 "RESEARCH PLAN" means the specific, detailed plan for research and
development activities in the Collaboration that is developed by the Research
Committee and approved by the Steering Committee. The parties anticipate that
they will update the Research Plan on at least a quarterly basis.
1.27 "RESERVED COMPOUND" means an Available Compound that has been
reserved by the parties for the Collaboration as described in Subsection 3.4.1.
1.28 "RESERVED COMPOUND SET" means a set of Reserved Compounds that share
substantial chemical or structure homology, and which exhibit significant
functional activity for the same Reserved Target, or which share other common
characteristics such that the Research Committee has decided, in its discretion,
to group those Reserved Compounds for evaluation under Section 3.4. or for
allocation under Subsection 9.6.2.
1.29 "RESERVED TARGET" means an Available Target that has been reserved
by the parties for the Collaboration as described in Subsection 3.4.1.
1.30 "RESERVED TARGET SET" means a set of Reserved Targets that are so
closely related that the Research Committee has decided, in its discretion, to
group those Reserved Targets for evaluation under Section 3.4. or allocation
under Subsection 9.6.2.
1.31 "STEERING COMMITTEE" means the Steering Committee described in
Section 2.2. of this Agreement. The Steering Committee has overall authority
within the Collaboration, and specifically has approval authority over financial
decisions.
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1.32 "TARGETED COMPOUND" means a compound in a library focused on a
target class, which library is developed jointly by the parties within the
Collaboration, as more particularly described in the Collaboration Plan and
Research Plan.
1.33 "TECHNOLOGY" means any proprietary development, idea, design,
concept, technique, process, invention, Research Material, discovery, or
improvement, whether or not patentable or copyrightable. "ARQULE TECHNOLOGY"
means Technology that is either (i) assigned solely to ArQule, (ii) assigned
jointly to ArQule and a party other than ACADIA, or (iii) licensed to ArQule, in
each case to the extent that ArQule has the ability to license or sublicense the
rights required under this Agreement without payment to a third party. "ACADIA
TECHNOLOGY" means Technology that is either (i) assigned solely to ACADIA, (ii)
assigned jointly to ACADIA and a party other than ArQule, or (iii) licensed to
ACADIA, in each case to the extent that ACADIA has the ability to license or
sublicense the rights required under this Agreement without payment to a third
party. "COLLABORATION TECHNOLOGY" means (i) all Committed Compounds and their
use against Committed Targets, (ii) all Targeted Compounds and their uses, and
(iii) any Technology that is developed, invented, or discovered jointly by one
or more employees or consultants of ACADIA and one or more employees or
consultants of ArQule in connection with the Collaboration.
2. MANAGEMENT OF COLLABORATION.
2.1 RESEARCH COMMITTEE.
2.1.1 CREATION OF RESEARCH COMMITTEE. The parties hereby create a
Research Committee with at least four (4) members, with equal representation
from each party. The members initially designated by ACADIA are ***** and *****,
and the members initially designated by ArQule are ***** and *****. Either party
may change its representatives on the Research Committee at any time upon
written notice to the other party. The chairperson of the Research Committee
shall be designated annually on an alternating basis between the parties. The
chairperson shall initially be *****. The party not designating the chairperson
shall designate one of its representatives as secretary to the Research
Committee for such *****.
2.1.2 MEETINGS OF THE RESEARCH COMMITTEE. Regular meetings of the
Research Committee shall be held within ***** of the end of each calendar
quarter, or at such other times as the parties may deem appropriate, at such
times and places as the members of the Research Committee shall from time to
time agree. Special meetings of the Research Committee may be called by either
party on ***** written notice to the other party unless notice is waived by the
parties. All meetings shall alternate between the offices of the parties unless
the parties otherwise agree. The chairperson shall be responsible for sending
notice of meetings to all members. In the event a Research Committee member is
unable to attend a meeting of the Research Committee, such Research Committee
member may designate an alternate member who will serve solely for that Research
Committee meeting.
2.1.3 DECISIONS OF RESEARCH COMMITTEE. A quorum of the Research
Committee shall be present at any meeting of the Research Committee if at least
one representative of each party is present at such meeting in person or by
telephone. If a quorum
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exists at any meeting, the unanimous consent of all members of the Research
Committee present at such meeting is required to take any action on behalf of
the Research Committee.
2.1.4 RESPONSIBILITIES OF RESEARCH COMMITTEE. The Research Committee
shall be responsible for the day-to-day conduct and progress of the
Collaboration, including without limitation:
(i) preparing, approving, and updating the Research Plan and
the annual budget;
(ii) managing all technical aspects of the Collaboration,
including all research and development activities;
(iii) providing a forum for the exchange of scientific
information among the scientists participating in the Collaboration;
(iv) resolving matters involving scientific questions;
(v) determining the criteria of significant functional
activity necessary for an ArQule Compound, Targeted Compound, or Analog Compound
to qualify as an Active Compound and confirming that an ArQule Compound,
Targeted Compound, or Analog Compound qualifies as an Active Compound;
(vi) maintaining records of Reserved Compounds and Reserved
Targets and establishing Reserved Compound Sets and Reserved Target Sets;
(vii) designating Available Active Compounds as Committed
Compounds, establishing Committed Compound Sets, and adding and removing
compounds from Committed Compound Sets; and
(viii) designating Available Targets as Committed Targets,
establishing Committed Target Sets, and adding and removing targets from
Committed Target Sets.
2.1.5 RESEARCH COMMITTEE REPORTS. Within ***** following each
meeting of the Research Committee held pursuant to Subsection 2.1.2., the
secretary of the Research Committee shall prepare and send to each party a
written report of actions taken at the meeting in such form and containing such
detail as shall be determined by the Research Committee.
2.1.6 DEADLOCK. In the event that the Research Committee cannot
reach agreement with respect to any matter that is subject to its
decision-making authority, then the matter shall be referred to the Steering
Committee for resolution.
2.2 STEERING COMMITTEE.
2.2.1 CREATION OF STEERING COMMITTEE. The parties hereby also create
a Steering Committee with at least six 6) members, with equal representation
from each party. The members initially designated by ACADIA are *****. The
members initially designated by ArQule are *****. Either party may change its
representatives on the Steering Committee at any
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time upon written notice to the other party. The chairperson of the Steering
Committee shall be designated annually on an alternating basis between the
parties. The initial chairperson of the Steering Committee shall be *****. The
party not designating the chairperson shall designate one of its representatives
as secretary of the Steering Committee for such *****.
2.2.2 MEETINGS OF THE STEERING COMMITTEE. Regular meetings of the
Steering Committee shall be held within ***** of the end of each calendar year,
or at such other times as the parties may deem appropriate, at such times and
places as the members of the Steering Committee shall from time to time agree.
Special meetings of the Steering Committee may be called by either party on
***** written notice to the other party unless notice is waived by the parties.
All meetings shall alternate between the offices of the parties unless the
parties otherwise agree. In the event a Steering Committee member is unable to
attend a meeting of the Steering Committee, such Steering Committee member may
designate an alternate member who will serve solely for that Steering Committee
meeting.
2.2.3 DECISIONS OF THE STEERING COMMITTEE. Unless otherwise
specifically designated as a responsibility of the Research Committee pursuant
to Subsection 2.1.4., all decisions regarding the contractual and financial
relationship created by this Agreement shall be made by the Steering Committee
acting in accordance with this Agreement or by agents duly authorized in writing
by the Steering Committee. A quorum of the Steering Committee shall be present
at any meeting of the Steering Committee if at least one representative of each
party is present at such meeting in person or by telephone. If a quorum exists
at any meeting, the unanimous consent of all members of the Steering Committee
present at such meeting is required to take any action on behalf of the Steering
Committee.
2.2.4 RESPONSIBILITY OF STEERING COMMITTEE. The Steering Committee
shall be responsible for approving long-term objectives for, and evaluating the
progress of, the Collaboration, including without limitation:
(i) approving all updates to the Research Plan and any
changes to the Collaboration Plan;
(ii) approving the annual budget for the Collaboration;
(iii) reviewing and approving involvement of third parties in
the Collaboration;
(iv) developing Commercialization Plans and managing
commercialization of Collaboration Work Product;
(v) resolving deadlocks of the Research Committee; and
(vi) determining the number of members for both the Research
Committee and Steering Committee, beyond the minimum of four members.
2.2.5 STEERING COMMITTEE REPORTS. Within ten (10) days following
each meeting of the Steering Committee held pursuant to Subsection 2.2.2., the
secretary of the Steering Committee shall prepare and send to the members of the
Steering Committee a detailed
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written report of actions taken at the meeting in such form and containing such
detail as shall be determined by the Steering Committee.
2.2.6 DEADLOCK. In the event that the Steering Committee declares a
deadlock with respect to, or fails to reach agreement within sixty (60) days as
to, any matter relating only to specific activities under the Collaboration
(such as designation of Active Available Compounds as Committed Compounds;
designation of ACADIA Targets as Committed Targets; the initiation or conduct of
lead optimization or preclinical development activities; approval of the annual
budget or changes to the Research Plan; or approval of a Commercialization Plan)
the matter shall not be subject to dispute resolution under Article 10, but
shall be referred to the Chief Executive Officers of each party for resolution
within sixty (60) days after the date the deadlock is reached, subject to
extension by mutual agreement. If the Chief Executive Officers fail to resolve
the matter within the sixty-day period, or such other period that the parties
mutually establish, the Agreement will terminate pursuant to Section 9.3. Any
other unresolved disagreements within the Steering Committee and relating to
this Agreement shall be referred to dispute resolution in accordance with the
procedures set forth in Article 10.
3. CONDUCT OF COLLABORATION
3.1 SCOPE OF COLLABORATION. During the Collaboration, the parties will
(i) perform lead generation activities using ArQule Compounds and multiple
ACADIA Targets to identify Active Compounds, (ii) perform lead qualification
activities on Reserved Compounds and Reserved Targets to select Committed
Compounds and Committed Targets for lead optimization efforts, (iii) perform
lead optimization activities on Committed Compound Sets to develop one or more
GLP Toxicology Candidates, and (iv) if appropriate, conduct work on one or more
GLP Toxicology Candidates to develop IND Candidates, in each case as further
described below. The parties may also develop libraries of Targeted Compounds
that are focused on a particular target class, and then use the Targeted
Compounds for lead generation, as described below. The overall objective of the
Collaboration is to discover and develop compounds that demonstrate potential as
human therapeutic products, and to sell, license, or otherwise transfer
commercial rights to those compounds to third parties.
3.2 GENERAL RESPONSIBILITIES OF EACH PARTY. In general, the parties
intend that ACADIA will be responsible for biology-related tasks relating to the
ACADIA Targets and ArQule will be responsible for chemistry-related tasks
relating to the ArQule Compounds, but only until identification of a GLP
Toxicology Candidate. If the parties decide to develop a GLP Toxicology
Candidate into an IND Candidate, they will share responsibility for the
necessary preclinical activities through the Research Committee and Steering
Committee. This allocation of responsibilities reflects the expected
contributions from each party. However, the Research Committee has discretion to
allocate specific research and development tasks on a case-by-case basis to the
party that has the best current capability and capacity to complete the task and
advance the project. The actual responsibilities of each party will be
determined by the Research Committee and Steering Committee and described in the
Collaboration Plan or Research Plan.
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3.3 LEAD GENERATION.
3.3.1 TARGET SELECTION. The Research Committee will select which
ACADIA Targets to screen in the Collaboration from among those nominated by
ACADIA and accepted by ArQule. ACADIA will only nominate Available Targets for
ACADIA. ArQule will decline to accept any ACADIA Targets that are not Available
Targets for ArQule. The initial ACADIA Targets selected by the Research
Committee are set forth in the initial Research Plan. After the Research
Committee selects an ACADIA Target, ACADIA and ArQule agree to notify the
Research Committee as soon as possible before taking any actions which could
remove the status of that ACADIA Target as an Available Target. In such event,
the Research Committee will immediately remove that ACADIA Target from the
Collaboration.
3.3.2 COMPOUND SELECTION. The Research Committee will decide which
libraries of ArQule Compounds to screen in the Collaboration (e.g., Compass
Array Sets, Biased Array Sets, or Mapping Array Sets, as described in the
Collaboration Plan). The Research Committee may also decide to screen Targeted
Compounds in focused libraries developed by the parties for a target class, if
any, as described in the Collaboration Plan. The Research Committee may also
decide to screen Analog Compounds developed by the parties for a different
ACADIA Target.
3.3.3 PROCEDURES FOR ARQULE COMPOUNDS. The parties will screen
ArQule Compounds against ACADIA Targets as directed by the Research Committee
and described in the Collaboration Plan and Research Plan. Initially, ArQule
will not disclose structures of individual ArQule Compounds. ArQule will
disclose to ACADIA the structures of Active Compounds that are Available
Compounds for ArQule. ACADIA will then determine whether those Active Compounds
are Available Compounds for ACADIA. If an Active Compound is an Available
Compound for both parties, each party will preserve the availability of the
Active Compound and the corresponding ACADIA Target and proceed to confirm
activity as described in Section 3.4. and in the Collaboration Plan. In
contrast, if a party determines that an Active Compound is not an Available
Compound for such party, the parties shall immediately cease all information
disclosure and activities under this Agreement with respect to that Active
Compound; however, the parties shall use reasonable efforts to monitor whether
that Active Compound later becomes an Available Compound and, in such event,
shall notify the other party and then proceed in accordance with Section 3.4.
Any information regarding the activity of these Active Compounds that are not
Available Compounds for the ACADIA Targets shall remain subject to the
restrictions on Confidential Information set forth in Article 7.
3.3.4 PROCEDURES FOR TARGETED COMPOUNDS. If the parties develop or
one or more focused compound libraries of Targeted Compounds for a target class,
as described in the Collaboration Plan, the parties will screen those Targeted
Compounds against ACADIA Targets as directed by the Research Committee and
described in the Collaboration Plan and Research Plan. Both parties shall have
access to the structures of all Targeted Compounds and shall maintain Targeted
Compounds as Available Compounds during the Collaboration. Therefore, unlike the
procedures for ArQule Compounds, a determination of availability is unnecessary.
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3.4 LEAD QUALIFICATION.
3.4.1 SELECTION OF RESERVED COMPOUNDS AND RESERVED TARGETS. The
parties expect to discover multiple series of Available Active Compounds with
activity for multiple ACADIA Targets in the course of screening under the
Research Plan. The Research Committee will group the various ACADIA Targets in
multiple batches for screening. After each batch of ACADIA Targets is screened,
the Research Committee will review the various combinations of Available Active
Compounds and ACADIA Targets for which activity was detected and decide which
Available Active Compounds and ACADIA Targets from that batch of screening, if
any, should progress to further qualification in secondary screens and ADMET
assays as described in the Collaboration Plan and Research Plan. For those
Available Active Compounds and ACADIA Targets that the Research Committee
decides to pursue, the parties will designate the Available Active Compounds as
Reserved Compounds and the ACADIA Targets as Reserved Targets under this
Agreement and reserve those compounds and targets exclusively for the
Collaboration for a period of *****, subject to extension by the Research
Committee, while secondary screens and ADMET assays are conducted. The Research
Committee may also group Reserved Compounds as a Reserved Compound Set and
Reserved Targets as a Reserved Target Set. All remaining Available Active
Compounds and ACADIA Targets that the Research Committee has declined to advance
to secondary screening shall automatically be released from their reserved
status; however, any information regarding the activity of these Available
Compounds for the ACADIA Targets shall remain subject to the restrictions on
Confidential Information set forth in Article 7.
3.4.2 SELECTION OF COMMITTED COMPOUNDS AND COMMITTED TARGETS. The
parties expect that the Research Committee will further qualify and prioritize
the various opportunities presented by the combinations of Reserved Compounds
and Reserved Targets as described in the Collaboration Plan and Research Plan.
In order to facilitate this process, ArQule shall disclose to ACADIA the
structures, but not the locations, of inactive ArQule Compounds from each
Mapping Array Set from which Reserved Compounds are selected. ArQule shall also
produce and deliver to ACADIA resynthesized samples of selected Reserved
Compounds, as directed by the Research Committee. ACADIA shall test the
resynthesis samples of Reserved Compounds in various assays as directed by the
Research Committee and in accordance with the Research Plan. The Research
Committee shall then review the data and, after consideration, designate *****
Reserved Targets and their corresponding Reserved Compounds as Committed Targets
and Committed Compounds under this Agreement. The Research Committee has
discretion to replace ***** Committed Targets and their corresponding Committed
Compounds at any time as new batches of ACADIA Targets and ArQule Compounds and
Targeted Compounds are screened and new Reserved Targets and Reserved Compounds
are identified. The Research Committee may increase the number of Committed
Targets and their Committed Compounds at any time, with approval of the Steering
Committee. Any Reserved Targets and their corresponding Reserved Compounds, if
any, that have met the predefined criteria for consideration as Committed
Targets and Committed Compounds but which were not selected by the Research
Committee shall be allocated between the parties as provided in Section 9.6. All
other Reserved Targets and Reserved Compounds, if any, shall automatically be
released from their reserved status; however, any information regarding the
activity of these Reserved Compounds for the Reserved Targets shall remain
subject to the restrictions on Confidential Information set forth in Article 7.
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3.5 LEAD OPTIMIZATION. The Research Committee will update the Research
Plan to provide for the accelerated lead optimization of the selected Committed
Compound Sets with Committed Targets in the Collaboration, subject to Steering
Committee approval. The Research Plan will set project priorities and define
success criteria for a GLP Toxicology Candidate. As described in the
Collaboration Plan, in a typical project the parties will iteratively develop
and test Analog Compounds based on Committed Compounds. The parties will
determine whether a proposed Analog Compound is an Available Compound before
synthesis, and only Available Compounds will proceed to synthesis and testing in
the Collaboration. The Analog Compounds developed by the parties shall
automatically become Committed Compounds under this Agreement and, therefore,
the Committed Compound Set for the Committed Target will likely expand as a
result of the lead optimization efforts. At the discretion of the Research
Committee, the parties may also use such Analog Compounds in primary screens
against other ACADIA Targets. The parties anticipate that lead optimization of
Committed Compounds will occur in two stages:
(i) In the first stage, the parties will develop Analog Compounds as
combinatorial libraries to explore the promise of the Committed
Compound Set for the Committed Target. The parties will test these
Analog Compounds for various properties determined by the Research
Committee to predict whether the Committed Compound Set may
eventually meet the defined success criteria for a GLP Toxicology
Candidate. The parties will decide whether to proceed to stage two
for a given Committed Compound Set within *****.
(ii) In the second stage, the parties intend to concentrate their efforts
on developing ***** and ***** corresponding Committed Compound
Set(s) to identify a GLP Toxicology Candidate, with ***** from the
first stage. The parties shall maintain a level of effort determined
by the Research Committee for the *****. The Research Committee may
release Committed Targets and the corresponding Committed Compound
Set(s) that are no longer of interest to the Collaboration or which
are no longer the subject of the active efforts by the parties, as
determined by the Research Committee and subject to Steering
Committee approval, in which case the allocation provisions of
Section 9.6. shall apply. Lead optimization activities will continue
with respect to a Committed Target until the Research Committee and
Steering Committee decide to stop further efforts. The parties
anticipate that lead optimization activities will continue with
respect to a Committed Target until the parties (i) develop an
acceptable GLP Toxicology Candidate, (ii) determine that they are
unlikely to develop an acceptable GLP Toxicology Candidate, or (iii)
decide to seek commercialization of the Committed Compound Set(s)
and Committed Target as described below.
3.6 PRECLINICAL DEVELOPMENT. At the discretion of the Steering
Committee, the parties may decide to conduct the necessary preclinical
development activities to advance one or more GLP Toxicology Candidates to
become IND Candidates, as described in the Collaboration Plan. In such event,
the Research Committee will update the Research Plan to provide for such
activities, subject to approval of the Steering Committee. These preclinical
development activities will continue with respect to a GLP Toxicology Candidate
until the Research Committee and Steering Committee decide to stop further
efforts. The parties anticipate that
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these preclinical development activities will continue with respect to a GLP
Toxicology Candidate until the parties (i) develop an acceptable IND Candidate,
(ii) determine that they are unlikely to develop an acceptable IND Candidate, or
(iii) decide to seek commercialization of the GLP Toxicology Candidate and the
corresponding Committed Target as described below.
3.7 COMMERCIALIZATION. At any time during the Collaboration, the
Steering Committee may decide to sell, license, or otherwise transfer commercial
rights in Collaboration Work Product to a third party. In such event, the
Steering Committee will develop and approve a Commercialization Plan for such
Collaboration Work Product. Unless otherwise determined by the Steering
Committee, the Commercialization Plan will (i) describe the expectations of the
parties regarding the commercial value of the Collaboration Work Product and
potential Collaboration Products, (ii) set forth a marketing plan for the
Collaboration Work Product (e.g., best potential customers), and (iii) state the
respective responsibilities of each party for commercialization of the
Collaboration Work Product (e.g., lead negotiator). The Steering Committee will
manage the commercialization process. Alternatively, one party may purchase the
interest of the other party in particular Collaboration Work Product on
negotiated terms in a voluntary transaction. In such event, the separately
negotiated agreement shall supersede the terms of this Agreement with respect to
that Collaboration Work Product. The Steering Committee may also decide to sell,
license, or otherwise transfer commercial rights in one or more focused
libraries of Targeted Compounds developed by the parties during the
Collaboration. In such event, the Steering Committee will develop and approve a
Commercialization Plan for this Collaboration Work Product.
3.8 REPORTS AND RECORDS. Each party agrees to promptly and regularly
communicate to the other party all research results from the Collaboration,
including quarterly reports to the Research Committee detailing all tests
conducted and results obtained by such party in connection with the
Collaboration. Each party shall prepare and maintain adequate records, including
bound laboratory notebooks maintained in accordance with standard scientific
procedures, containing all appropriate data reflecting all research results from
the Collaboration. In addition, each party shall retain under appropriate
conditions any necessary or desirable samples of research materials that are
developed or used in the Collaboration.
4. ALLOCATION OF EXPENSES AND REVENUES.
4.1 EXPENSES. The Research Committee shall establish an annual budget
for all activities in the Collaboration, subject to Steering Committee approval.
Each party shall bear the expenses of its respective activities under the
Research Plan in accordance with the annual budget, except that the parties will
share equally any expenses payable (i) to third party service providers or (ii)
incurred in connection with preclinical development activities under Section
3.6. above, provided such expenses are approved in advance by the Steering
Committee and included in the annual budget. The Research Committee and Steering
Committee shall use their best efforts to ensure that the resource and value
contributions of each party are approximately equal on an annual basis. Any
significant deviations from the annual budget must receive Steering Committee
approval. Each party shall also pay fifty percent (50%) of all direct expenses
(e.g., legal fees, travel) incurred by either party in connection with
commercialization activities approved by the Steering Committee pursuant to
Section 3.7. The Steering Committee has the right to refuse payment of expenses
that are not properly documented or are unreasonably
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excessive. Each party shall promptly make payments to third parties, or
reimburse the other party, for expenses owed by such party as set forth in this
Section.
4.2 REVENUES. Each party shall receive fifty percent (50%) of all Gross
Revenues received in connection with Collaboration Work Product sold, licensed
or transferred to a third party under Section 3.7, provided that each party has
contributed approximately equal resources and value to the Collaboration in
accordance with the Research Plan and the annual budget. In the event that one
party expends greater resources or contributes greater value than the other
party in the Collaboration, as formally recognized by the Steering Committee and
documented in the Research Plan or annual budget, the Steering Committee will
compensate the party with the greater resource expenditure or value contribution
in a manner reasonably acceptable to both parties.
4.3 RECORDS. Each party shall establish separate and distinct accounting
records (but not necessarily separate general ledgers) such that the
expenditures for the Collaboration are direct and transparent. As a guideline,
each party should have separate project records supported by time records and
records of direct expenses attributable to the Collaboration. Each party shall
maintain these records for a period of at least ***** after the conclusion of
the applicable calendar year. Each party shall have the right, at its own
expense, to cause an independent certified public accountant reasonably
acceptable to the other party to inspect such records during normal business
hours for the sole purpose of verifying the expenditures reported under this
Agreement. The accountant shall conduct the audit at a date and time reasonably
acceptable to the audited party but not later than ***** after the audited party
is notified of the audit. Such accountant shall not disclose to the requesting
party any information other than information relating to the accuracy of
expenditures reported under this Agreement and shall provide the audited party
with a copy of any report given to the requesting party. In the event of any
discrepancy, the parties shall promptly reconcile the discrepancy to achieve the
results set forth in Sections 4.1. and 4.2. Each party may exercise its audit
right not more than *****.
5. INTELLECTUAL PROPERTY RIGHTS.
5.1 LICENSE GRANTS.
5.1.1 CROSS-LICENSES AND CROSS-ASSIGNMENT.
(i) ArQule hereby grants ACADIA a worldwide, royalty-free,
non-exclusive license under the ArQule Patent Rights, Joint Patent Rights, and
other rights in ArQule Technology and Collaboration Technology to *****.
(ii) ACADIA hereby grants ArQule a worldwide, royalty-free,
non-exclusive license under the ACADIA Patent Rights, Joint Patent Rights, and
other rights in ACADIA Technology and Collaboration Technology to *****.
(iii) To the extent that any Patent Rights in any Committed
Compound or its use against any Committed Target or in any Targeted Compound or
its use are not assigned to, or controlled by, both ArQule and ACADIA as joint
owners or are not otherwise jointly invented by one or more employees or
consultants of ACADIA and one or more employees or consultants of ArQule in
connection with the Collaboration, *****.
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5.1.2 COMMERCIALIZATION LICENSES. In the event that the parties
sell, license, or otherwise transfer commercialization rights in Collaboration
Work Product to a third party pursuant to Section 3.7. above, each party hereby
covenants and agrees to grant to such third party any rights and licenses under
such party's Patent Rights and Technology as are reasonably necessary for such
third party to exploit such Collaboration Work Product in accordance with the
terms of a written agreement between the parties and such third party that is
consistent with the Commercialization Plan applicable to such Collaboration Work
Product, and to provide reasonable warranties of title, further assurances, and
similar customary provisions in connection with such grant of rights or
licenses.
5.2 INTELLECTUAL PROPERTY DEVELOPED OUTSIDE OF THE COLLABORATION. Except
as expressly set forth in this Agreement, neither party shall have any rights in
Patent Rights and Technology that are developed or discovered by the other party
prior to the Effective Date or outside of the Collaboration. Therefore, ArQule
shall have no rights in ACADIA Targets other than as provided in the Agreement,
and ACADIA shall have no rights in ArQule Compounds other than as provided in
the Agreement. Each party shall have sole responsibility for and control over
Patent Rights claiming any of its Technology that was developed or discovered
prior to the Effective Date or outside of the Collaboration. Neither party shall
have any right to review or comment on such Patent Rights of the other party.
5.3 INTELLECTUAL PROPERTY ARISING FROM THE COLLABORATION.
5.3.1 COMMITTED COMPOUNDS AND COMMITTED TARGETS. Committed Compounds
and Committed Targets are exclusive to the Collaboration, which means that
except as otherwise expressly provided in this Agreement:
(i) ArQule shall not engage in any research and development
activities on Committed Compounds outside of the Collaboration;
(ii) ArQule shall not knowingly engage in any research and
development activities on Committed Targets outside of the Collaboration except
to the extent that a third party requires ArQule to perform such activities
under a binding contract (which ArQule will disclose in advance to ACADIA);
(iii) ACADIA shall not engage in any research and development
activities on Committed Targets outside of the Collaboration; and
(iv) ACADIA shall not knowingly engage in any research and
development activities on Committed Compounds outside of the Collaboration
except to the extent that a third party requires Acadia to perform such
activities under a binding contract (which ACADIA will disclose in advance to
ArQule).
In the event that a party engages in research and development activities with a
third party with respect to Committed Compounds or Committed Targets under the
limited circumstances permitted under this Subsection, such party shall
establish and observe strict procedures to ensure that no information crosses
from one project to the other project. The other party shall have the right to
audit such procedures upon reasonable prior written notice. All Committed
Compounds and Committed Targets shall remain exclusive to the Collaboration
until the
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Collaboration terminates or the Steering Committee releases a particular
Committed Compound, Committed Compound Set, Committed Target, or Committed
Target Set.
5.3.2 RIGHT TO USE. Except as provided in Section 5.1. above or
otherwise expressly provided in this Agreement, each party shall have the
following rights and restrictions for the use of Patent Rights and Technology
arising from the Collaboration:
(i) ArQule shall not have any right or license under ACADIA
Patent Rights or other rights in ACADIA Technology arising from the
Collaboration.
(ii) ACADIA shall not have any right or license under ArQule
Patent Rights or other rights in ArQule Technology arising from the
Collaboration.
(iii) During the Collaboration, neither party may use Targeted
Compounds outside of the Collaboration without the prior written consent of the
other party. After the expiration or termination of this Agreement, the parties
shall have co-exclusive rights to Targeted Compounds (other than Targeted
Compounds that are subject to the provisions of Section 9.6.2) as follows.
*****.
(iv) Except as otherwise provided in this Agreement, each
party shall have the right to use Joint Patent Rights and Collaboration
Technology consistent with the provisions of Article 7 without accounting to the
other party.
5.3.3 OWNERSHIP. Ownership of Patent Rights and Technology arising
from the Collaboration shall be allocated in the following manner:
(i) ArQule shall have sole ownership of all right, title,
and interest in ArQule Patent Rights and ArQule Technology;
(ii) ACADIA shall have sole ownership of all right, title,
and interest in ACADIA Patent Rights and ACADIA Technology; and
(iii) ArQule and ACADIA shall have joint ownership of all
right, title, and interest in Joint Patent Rights and Collaboration Technology.
Each party shall ensure that its employees, consultants, agents, and
representatives are contractually required to disclose and to assign to such
party all Patent Rights and other rights in Technology arising from the
Collaboration.
5.3.4 NOTICE. Each party shall provide prompt written notice to the
Research Committee of the internal disclosure of any significant Technology
developed by its personnel in connection with the Collaboration.
5.3.5 RESPONSIBILITY FOR PATENT RIGHTS. ArQule shall be responsible
for and shall control, at its expense, the preparation, filing, prosecution,
grant, and maintenance of any Patent Rights claiming only ArQule Technology
arising from the Collaboration and shall consult with ACADIA on, and give ACADIA
a reasonable opportunity to review, all such filings to the extent they directly
relate to the Collaboration. ACADIA shall be responsible for and shall
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control, at its expense, the preparation, filing, prosecution, grant, and
maintenance of all Patent Rights claiming only ACADIA Technology arising from
the Collaboration and shall consult with ArQule on, and give ArQule a reasonable
opportunity to review, all such filings to the extent they relate directly to
the Collaboration. In the case of Collaboration Technology, the Research
Committee will decide whether to seek Joint Patent Rights claiming that
Technology or to maintain that Technology as a trade secret, subject to approval
of the Steering Committee. The Research Committee will also decide whether to
seek Patent Rights claiming both ArQule Technology and ACADIA Technology in one
filing (which also constitutes a Joint Patent Right), subject to approval of the
Steering Committee. If the parties decide to seek any Joint Patent Rights, the
parties shall jointly prepare, file, prosecute, and maintain such Patent Rights,
and all related expenses shall be borne equally by the parties. Notwithstanding
the foregoing, neither party shall file any Joint Patent Rights claiming the
composition or use of any Active Compound until the Research Committee has
properly designated that Active Compound as a Committed Compound in accordance
with Subsection 3.4.2.
5.3.6 ASSUMPTION OF RIGHTS BY OTHER PARTY. In the event that a party
desires to decline responsibility for obtaining or maintaining Patent Rights in
a country for any of its Technology that arises from the Collaboration, such
party will notify the other party before taking such action and, upon request,
will allow the other party to assume responsibility for, and all expenses
relating to, the relevant Patent Rights in those countries; provided, however,
that neither party shall have the right to seek patent protection for any
Technology that a party has decided, in its discretion, to maintain as a trade
secret. In the event that a party desires to cease further payment of
patent-related expenses for a Joint Patent Right in any country, such party may
assign to the other party all rights in that Joint Patent Right in such country
and thereafter have no further obligation to pay such expenses.
5.3.7 COOPERATION. Each party agrees to cooperate fully in the
preparation, filing, prosecution, and maintenance of all Patent Rights claiming
Technology arising from the Collaboration. Such cooperation includes, without
limitation, (i) promptly executing all papers and instruments, or requiring its
employees, consultants, and agents to execute such papers and instruments, as
reasonable and appropriate so as to enable one or both parties to file,
prosecute, and maintain such Patent Rights in any country; (ii) promptly
informing the other party of matters that may affect the preparation, filing,
prosecution, or maintenance of any such Patent Rights; and (iii) undertaking no
actions that are potentially deleterious to the preparation, filing, or
prosecution of any such Patent Rights.
6. RESEARCH MATERIALS.
6.1 OWNERSHIP OF RESEARCH MATERIALS. In the course of this
Collaboration, one party (the "PROVIDER") may transfer to the other party (the
"RECIPIENT") certain of its Research Materials. The Recipient acknowledges and
agrees that such Research Materials are and shall be owned by the Provider. The
Recipient agrees to execute and deliver any documents of assignment or
conveyance to effectuate the ownership rights of the Provider in such Research
Materials. Specifically, ACADIA acknowledges and agrees that all ArQule
Compounds provided to ACADIA in the Collaboration and, previously, under the MTA
are proprietary to and owned by ArQule and are or may be covered by claims of
ArQule Patent Rights, and ArQule acknowledges and agrees that all expressed
proteins for ACADIA Targets provided by ACADIA
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in the Collaboration are proprietary to and owned by ACADIA and are or may be
covered by claims of ACADIA Patent Rights.
6.2 USE AND TRANSFER OF RESEARCH MATERIALS. Except as otherwise agreed
by the Research Committee, the Recipient agrees to use Research Materials
provided by the Provider solely for purposes set forth in this Agreement and
shall not distribute such Research Materials to any third party other than its
employees and consultants who are working on the Collaboration; provided that
the parties may provide Research Materials specific to Collaboration Work
Product to a third party for the purposes described in Section 3.7 and may
provide Research Materials specific to Targeted Compounds to a sublicensee of
such party's rights to such Targeted Compounds under Section 5.3.2(iii).
6.3 ADDITIONAL RESTRICTIONS FOR PROPRIETARY RESEARCH MATERIALS. In the
case of Proprietary Research Materials furnished by a Provider, Recipient agrees
(i) not to transfer such Proprietary Research Materials to any third party
without the prior written consent of the Provider, (ii) to permit access to the
Proprietary Research Materials only to its employees and consultants requiring
such access, (iii) to inform such employees and consultants of the proprietary
nature of the Proprietary Research Materials, and (iv) to take reasonable
precautions, at least as stringent as those observed by Recipient to protect its
own proprietary materials, to ensure that such employees and consultants observe
the obligations of Recipient under this Section.
6.4 DISPOSITION OF UNUSED RESEARCH MATERIALS. At the request of
Provider, Recipient will return or destroy any unused Research Materials
furnished by Provider.
6.5 COMPLIANCE WITH LAW. Recipient agrees to comply with all federal,
state, and local laws and regulations applicable to the use, storage, disposal,
and transfer of Research Materials furnished by Provider, including without
limitation the Toxic Substances Control Act (15 USC 2601 et seq.) and
implementing regulations (in particular, 40 CFR 720.36 [Research and Development
Exemption]), the Food, Drug, and Cosmetic Act (21 USC 301 et seq.) and
implementing regulations, and all Export Administration Regulations of the
Department of Commerce. Recipient assumes sole responsibility for any violation
of such laws or regulations by Recipient or any of its Affiliates or
sublicensees.
6.6 LIMITATION OF LIABILITY. Any Research Materials delivered pursuant
to this Agreement are understood to be experimental in nature and may have
hazardous properties. Recipient should assume that the compounds are dangerous
and should use appropriate precautions. PROVIDER MAKES NO REPRESENTATIONS, AND
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE RESEARCH MATERIALS FURNISHED TO RECIPIENT. THERE ARE NO EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE
USE OF THE RESEARCH MATERIALS WILL NOT INFRINGE ANY PATENT OR OTHER INTELLECTUAL
PROPERTY RIGHTS OF A THIRD PARTY.
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7. CONFIDENTIAL INFORMATION.
7.1 DESIGNATION OF CONFIDENTIAL INFORMATION. Confidential Information
that is disclosed in writing or electronically shall be marked with a legend
indicating its confidential status. Confidential Information that is disclosed
orally or visually shall be documented in a written notice prepared by the
Disclosing Party and delivered to the Receiving Party within ***** of the date
of disclosure; such notice shall summarize the Confidential Information
disclosed to the Receiving Party and reference the time and place of disclosure.
7.2 OBLIGATIONS OF RECEIVING PARTY. The Receiving Party agrees that it
shall:
(i) maintain all Confidential Information in strict confidence,
except that the Receiving Party may disclose or permit the
disclosure of any Confidential Information to (A) its
Affiliates, directors, officers, employees, consultants, and
advisors, (B) solely with respect to Confidential Information
specific to Collaboration Work Product, a third party for the
purposes described in Section 3.7 and (C) solely with respect
to Confidential Information specific to Targeted Compounds, a
sublicensee of such party's rights to such Targeted Compounds
under Section 5.3.2(iii), in each case which recipients are
obligated to maintain the confidential nature of such
Confidential Information and need to know such Confidential
Information for the purposes set forth in this Agreement;
(ii) use all Confidential Information solely for the purposes of
this Agreement and the permitted uses set forth in Section
7.6.; and
(iii) allow permitted recipients under Section 7.2(i) to reproduce
the Confidential Information only to the extent necessary to
effect the purposes set forth in this Agreement, with all such
reproductions being considered Confidential Information.
7.3 EXCEPTIONS. The obligations of the Receiving Party under Section
7.2. above shall not apply to the extent that the Receiving Party can
demonstrate that certain Confidential Information:
(i) was in the public domain prior to the time of its disclosure
under this Agreement;
(ii) entered the public domain after the time of its disclosure
under this Agreement through means other than an unauthorized
disclosure resulting from an act or omission by the Receiving
Party;
(iii) was independently developed or discovered by the Receiving
Party without use of any Confidential Information of the
Disclosing Party; or
(iv) is or was disclosed to the Receiving Party at any time,
whether prior to or after the time of its disclosure under
this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no
obligation of
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confidentiality or non-use to the Disclosing Party with
respect to such Confidential Information.
7.4 PERMITTED DISCLOSURE. Notwithstanding any other provision of this
Agreement, disclosure of Confidential Information shall not be precluded if such
disclosure is required to comply with applicable laws or regulations (such as
disclosure to the FDA or the United States Patent and Trademark Office or to
their foreign equivalents), or to comply with a court or administrative order,
provided that the Disclosing Party receives prior written notice of such
disclosure and that the Receiving Party takes all reasonable and lawful actions
to obtain confidential treatment for such disclosure and, if possible, to
minimize the extent of such disclosure.
7.5 RETURN OF CONFIDENTIAL INFORMATION. Upon the termination of this
Agreement, or earlier at the request of the Disclosing Party, the Receiving
Party shall return to the Disclosing Party all originals, copies, and summaries
of documents, materials, and other tangible manifestations of Confidential
Information in the possession or control of the Receiving Party, except that the
Receiving Party may retain one copy of the Confidential Information in the
possession of its legal counsel solely for the purpose of monitoring its
obligations under this Agreement.
7.6 PERMITTED USE OF INFORMATION. ACADIA and ArQule *****. Under no
circumstances may either party use any information from lead optimization
activities or preclinical development activities for any purpose other than the
Collaboration.
7.7 SURVIVAL OF OBLIGATIONS. The obligations set forth in this Article
shall remain in effect for an item of Confidential Information for a period of
***** after the date upon which a Receiving Party first received that
Confidential Information, except that the obligation of the Receiving Party to
return Confidential Information to the Disclosing Party shall survive until
fulfilled.
8. INDEMNIFICATION AND INSURANCE.
8.1 GENERAL INDEMNIFICATION. Each party (the "INDEMNIFYING PARTY") shall
indemnify and hold harmless the other party, its Affiliates, and their
respective directors, officers, employees and agents (collectively, the
"INDEMNITEES") from and against all claims, expenses or liability of whatever
nature arising from any default, act, omission, or negligence of the
Indemnifying Party, its agents or employees, or others exercising rights by,
through, or under the Indemnifying Party, or the failure of the Indemnifying
Party or such persons to comply with any applicable laws, rules, regulations,
codes, ordinances or directives of governmental authorities, in each case to the
extent the same are related, directly or indirectly, to the Collaboration
described herein; provided, however, that in no event shall the Indemnifying
Party be obligated under this section to indemnify the Indemnitees to the extent
that such claim, expense or liability results from any omission, fault,
negligence, or other misconduct of any of the Indemnitees.
8.2 PRODUCT LIABILITY INDEMNIFICATION. Each Indemnifying Party further
agrees to defend, indemnify, and hold the Indemnitees harmless from all costs,
judgments, liabilities, and
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damages assessed by a court of competent jurisdiction arising from claims
asserted by a third party against the Indemnitees as a result of (i) actual or
asserted violations of any applicable law or regulation by the Indemnifying
Party, its Affiliates, sublicensees, or third party manufacturers by virtue of
which the Collaboration Products, or any product containing as one of its
constituents any Targeted Compound, manufactured, distributed, or sold shall be
alleged or determined to be adulterated, misbranded, mislabeled, or otherwise
not in compliance with such applicable law or regulation; (ii) claims for bodily
injury, death, or property damage attributable to the manufacture, distribution,
sale, or use of the Collaboration Products, or any product containing as one of
its constituents any Targeted Compound, by the Indemnifying Party, or by its
Affiliates, sublicensees, or third party manufacturers; or (iii) a recall
ordered by a governmental agency, or required by a confirmed failure, as
reasonably determined by the parties, of Collaboration Products, or any product
containing as one of its constituents any Targeted Compound, manufactured,
distributed, or sold by the Indemnifying Party, or by its Affiliates,
sublicensees or third party manufacturers; provided, however, that in no event
shall the Indemnifying Party be obligated under this section to indemnify the
Indemnitees to the extent that such claim, expense or liability results from any
omission, fault, negligence, or other misconduct of any of the Indemnitees.
8.3 PROCEDURE. The Indemnitees agree to provide the Indemnifying Party
with prompt written notice of any claim, suit, action, demand, or judgment for
which indemnification is sought under this Agreement. If an Indemnitee fails to
provide such notice within a reasonable time, and if such failure prejudicially
affects the ability of the Indemnifying Party to defend such action, the
Indemnifying Party shall be relieved of its liability to such Indemnitee under
this Article 8. The Indemnifying Party agrees, at its own expense, to provide
attorneys reasonably acceptable to the Indemnitees to defend against any such
claim. The Indemnitees shall cooperate fully with the Indemnifying Party in such
defense and will permit the Indemnifying Party to conduct and control such
defense and the disposition of such claim, suit, or action (including all
decisions relative to litigation, appeal, and settlement); provided, however,
that any Indemnitee shall have the right to retain its own counsel, at the
expense of the Indemnifying Party, if representation of such Indemnitee by the
counsel retained by the Indemnifying Party would be inappropriate because of
actual or potential differences in the interests of such Indemnitee and any
other party represented by such counsel. The Indemnifying Party agrees to keep
the other party informed of the progress in the defense and disposition of such
claim and to consult with such party with regard to any proposed settlement.
Neither party may settle a claim or action for which indemnification is sought
under this Agreement without the consent of the other party if such settlement
would impose any monetary obligation on the other party or require the other
party to submit to an injunction or otherwise limit the other party, its
Affiliates or their respective directors, officers, employees or agents.
8.4 INSURANCE. Each party shall maintain, and shall require its
Affiliates and sublicensees to maintain, adequate product liability insurance or
self insurance with respect to development, manufacture, and sale of
Collaboration Products, or any product containing as one of its constituents any
Targeted Compound, by such party in such amount as that party customarily
maintains with respect to sales of its other products, and in no event less than
a reasonable amount. Each party shall maintain, and shall require its Affiliates
and sublicensees to maintain, such insurance for so long as that party continues
to manufacture or sell the
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Collaboration Products, and thereafter for so long as that party maintains
insurance for itself covering such manufacture or sale.
9. TERM AND TERMINATION.
9.1 TERM. This Agreement shall commence on the Effective Date and shall
continue for a period of five (5) years unless earlier terminated pursuant to
this Article 9.
9.2 TERMINATION BY PARTY. Either party may terminate this Agreement for
any reason upon ninety (90) days written notice to the other party. In addition,
the Steering Committee may terminate this Agreement at any time by mutual
agreement of the parties.
9.3 DEADLOCK. As described in Subsection 2.2.6., this Agreement shall
automatically terminate sixty (60) days (or such longer period as the parties
mutually agree) after the Steering Committee deadlocks on any matter relating
only to specific activities under the Collaboration, unless the matter is
resolved by the Chief Executive Officers of each party during such time period.
9.4 TERMINATION FOR DEFAULT. In the event that either party commits a
material breach of its obligations under this Agreement and fails to cure that
breach within ***** after receiving written notice thereof, the other party may
terminate this Agreement immediately upon written notice to the party in breach.
9.5 FORCE MAJEURE. Neither party will be responsible for delays
resulting from acts beyond the control of such party, provided that the
nonperforming party uses commercially reasonable efforts to avoid or remove such
causes of nonperformance and continues performance hereunder with reasonable
dispatch whenever such causes are removed.
9.6 DISPOSITION OF COLLABORATION WORK PRODUCT. Except as otherwise
agreed by the parties, the following provisions shall apply under the
circumstances specified in this Agreement or upon the expiration or termination
of this Agreement.
9.6.1 COMMERCIAL PRODUCTS. If any Collaboration Work Product has
been successfully commercialized pursuant to Section 3.7., the parties shall
share Gross Revenues attributable to that Collaboration Work Product as set
forth in Section 4.2.
9.6.2 RESIDUAL VALUE IN TARGETS AND COMPOUNDS. Except for
Collaboration Work Product that has been commercialized pursuant to Section
3.7., the parties will apportion rights in Reserved Targets, Reserved Compounds,
Committed Targets, and Committed Compounds as follows.
(i) The Research Committee will establish Reserved Target
Sets, Committed Target Sets, Reserved Compound Sets, and Committed Compound Sets
as necessary or desirable to prevent significant overlap between the rights
granted to each party under this Subsection. For example, if two ACADIA Targets
are receptor subtypes and if the Available Active Compounds for those two ACADIA
Targets are similar enough to form a single Reserved Compound Set or Committed
Compound Set, the Research Committee may group the ACADIA Targets into a single
Reserved Target Set or Committed Target Set to minimize the risk of
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conflicting Patent Rights filed by each party. As another example, if two
dissimilar ACADIA Targets are found to have activity with respect to Available
Active Compounds that are within a single chemotype and have substantial
homology, the Research Committee has discretion to establish two Reserved
Compound Sets or Committed Compound Sets (i.e., one for each ACADIA Target)
based on different structure-activity profiles that are identified for each
ACADIA Target.
(ii) For Reserved Targets and the corresponding Reserved
Compounds that have met the requisite criteria for consideration as Committed
Targets and Committed Compounds but which the Research Committee has declined to
designate as Committed Targets and Committed Compounds, as described in
Subsection 3.4.2., *****.
(iii) For Committed Targets and the corresponding Committed
Compound Set(s) that the Research Committee has removed from the Collaboration
as described in Subsection 3.4.2. or Section 3.5. or which have not been
commercialized pursuant to Section 3.7. when the Agreement expires or
terminates, *****.
(iv) Each party hereby agrees to assign, transfer, and convey
to the other party, or to grant such other party *****. Finally, each party
agrees to provide reasonable warranties of title, further assurances, and
similar customary provisions in connection with the grant of rights or licenses
under this Subsection.
(v) The parties shall enter into a Compound License
Agreement in substantially the form of the Compound License Agreement dated May
10, 2000 between ACADIA and ArQule for each (a) Reserved Target or Reserved
Target Set and its corresponding Reserved Compounds or Reserved Compound Set and
(b) Committed Target or Committed Target Set and its corresponding Committed
Compounds or Committed Compound Set, for which such party obtains rights under
this Subsection. Each party acknowledges and agrees that the Compound License
Agreement provides for, among other things, an annual license maintenance fee in
the amount of ***** and a royalty of either *****.
9.6.3 RIGHTS IN TARGETED COMPOUNDS. Except for Collaboration Work
Product that has been commercialized pursuant to Section 3.7., the rights of
each party to use Targeted Compounds continues after the Collaboration ends as
provided in Subsection 5.3.2., clause (iii), subject to the other provisions of
this Section 9.6.
9.7 SURVIVAL. The following provisions shall survive the expiration or
termination of this Agreement: Articles 4, 6, 7, 8, and 10; Sections 5.1.2.,
5.3. (except 5.3.1), 9.6., 9.7., 11.7., and 11.9.
10. DISPUTE RESOLUTION.
10.1 PROCEDURES MANDATORY. Except as otherwise provided in Subsection
2.2.6., the parties agree that any dispute arising out of or relating to this
Agreement shall be resolved solely by means of the procedures set forth in this
Article, and that such procedures constitute legally binding obligations that
are an essential provision of this Agreement; provided, however, that all
procedures and deadlines specified in this Article may be modified by written
agreement of the parties. If either party fails to observe the procedures of
this Article, as modified by their written
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agreement, the other party may bring an action for specific performance in any
court of competent jurisdiction.
10.2 DISPUTE RESOLUTION PROCEDURES.
10.2.1 NEGOTIATION. Except as otherwise provided in Subsection
2.2.6., in the event of any dispute arising out of or relating to this
Agreement, the affected party shall notify the other party, and the Steering
Committee shall attempt in good faith to resolve the matter within ***** after
the date such notice is received by the other party (the "NOTICE DATE"). Any
disputes not resolved by good faith discussions within the Steering Committee
shall be referred to senior executives of each party, who shall meet at a
mutually acceptable time and location within thirty ***** after the Notice Date
and attempt to negotiate a settlement.
10.2.2 MEDIATION. If the matter remains unresolved within ***** days
after the Notice Date, or if the senior executives fail to meet within *****
after the Notice Date, either party may initiate mediation upon written notice
to the other party, whereupon both parties shall be obligated to engage in a
mediation proceeding under the then current Center for Public Resources ("CPR")
Model Procedure for Mediation of Business Disputes, except that specific
provisions of this Section shall override inconsistent provisions of the CPR
Model Procedure. The mediator will be selected from the CPR Panels of Neutrals.
If the parties cannot agree upon the selection of a mediator within ***** after
the Notice Date, then upon the request of either party, the CPR shall appoint
the mediator. The parties shall attempt to resolve the dispute through mediation
until one of the following occurs: (i) the parties reach a written settlement;
(ii) the mediator notifies the parties in writing that they have reached an
impasse; (iii) the parties agree in writing that they have reached an impasse;
or (iv) the parties have not reached a settlement within ***** after the Notice
Date.
10.2.3 TRIAL WITHOUT JURY. If the parties fail to resolve the
dispute through mediation, or if neither party elects to initiate mediation,
each party shall have the right to pursue any other remedies legally available
to resolve the dispute; provided, however, that the parties expressly waive any
right to a jury trial in any legal proceeding under this Section.
10.3 PRESERVATION OF RIGHTS PENDING RESOLUTION.
10.3.1 PERFORMANCE TO CONTINUE. Each party shall continue to perform
its obligations under this Agreement pending final resolution of any dispute
arising out of or relating to this Agreement; provided, however, that a party
may suspend performance of its obligations during any period in which the other
party fails or refuses to perform its obligations.
10.3.2 PROVISIONAL REMEDIES. Although the procedures specified in
this Article are the sole and exclusive procedures for the resolution of
disputes arising out of or relating to this Agreement, either party may seek a
preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, such action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement.
10.3.3 STATUTE OF LIMITATIONS. The parties agree that all applicable
statutes of limitation and time-based defenses (such as estoppel and laches)
shall be tolled while the
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procedures set forth in Subsections 10.2.1. and 10.2.2. are pending. The parties
shall take any actions necessary to effectuate this result.
11. MISCELLANEOUS.
11.1 PUBLICITY. No press release, advertising, promotional sales
literature, or other promotional oral or written statements to the public in
connection with or alluding to work performed under this Agreement or the
relationship between the parties created by it, having or containing any
reference to ArQule or ACADIA, shall be made by either party without the prior
written approval of the other party, except for restatements of
previously-approved statements and disclosures required by applicable law or
regulation.
11.2 RELATIONSHIP OF PARTIES. For the purposes of this Agreement, each
party is an independent contractor and not an agent or employee of the other
party. Neither party shall have authority to make any statements,
representations, or commitments of any kind, or to take any action which shall
be binding on the other party, except as may be explicitly provided for herein
or authorized in writing. In particular, (i) neither party shall represent to
creditors or vendors that such party has any authority to obligate or bind the
other party, and shall affirmatively correct any misconception to that effect
and (ii) neither party shall use the name of the other party in connection with
such transactions without the prior written consent of the other party, which
consent may be withheld in its sole discretion.
11.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
11.4 HEADINGS. All headings in this Agreement are for convenience only
and shall not affect the meaning of any provision hereof.
11.5 BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective lawful successors and assigns.
11.6 ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that either of the
parties may assign this Agreement to a successor in connection with the merger,
consolidation, or sale of all or substantially all of its assets or that portion
of its business pertaining to the subject matter of this Agreement; provided,
however, that in the event of such a transaction, no intellectual property
rights of any Affiliate or third party that is an acquiring party shall be
included in the technology subject to this Agreement.
11.7 NOTICES. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized national overnight courier, confirmed facsimile
transmission, or registered or certified mail, return receipt requested, postage
prepaid, to the following addresses or facsimile numbers:
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If to ACADIA:
ACADIA Pharmaceuticals
3911 Sorrento Valley Blvd.
San Diego, CA 92121-1402
Attn: Chief Executive Officer
Tel: (858) 320-8614
Fax: (858) 455-1751
with a copy (which shall not constitute notice) to:
Pillsbury Madison & Sutro LLP
101 West Broadway, Suite 1800
San Diego, CA 92101-8219
Attn: John M. Dunn
Tel: (858) 509-4015
Fax: (858) 236-1995
If to ArQule:
ArQule, Inc.
19 Presidential Way
Woburn, MA 01801
Attn: President
Tel: (781) 994-0300
Fax: (781) 503-0009
with a copy (which shall not constitute notice) to:
ArQule, Inc.
19 Presidential Way
Woburn, MA 01801
Attn: Legal Department
Tel: (781) 994-0300
Fax: (781) 994-0676
Either party may change its designated address and facsimile number by notice to
the other party in the manner provided in this Section.
11.8 AMENDMENT AND WAIVER. This Agreement may be amended, supplemented,
or otherwise modified at any time, but only by means of a written instrument
signed by both parties. Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether or
not similar.
11.9 GOVERNING LAW. This Agreement and the legal relations among the
parties shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts irrespective of any conflict of laws principles.
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11.10 SEVERABILITY. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and this Agreement shall be construed as if such invalid or unenforceable
provision had not been included herein.
11.11 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous oral and prior written agreements and
understandings including, without limitation, the MTA.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
ACADIA PHARMACEUTICALS, INC.
By: /s/ Uli Hacksell, Ph.D.
----------------------------------------
Uli Hacksell, Ph.D.
Chief Executive Officer
ARQULE, INC.
By: /s/ Stephen A. Hill, M.D.
----------------------------------------
Stephen A. Hill , M.D.
President and Chief Executive Officer
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EXHIBIT A
*****
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