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Exhibit 10.6
NETGENICS, INC. HAS REQUESTED THAT
THE MARKED PORTIONS OF THIS
DOCUMENT BE ACCORDED CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406
UNDER THE SECURITIES ACT OF 1933
NETGENICS, INC./GENETICS INSTITUTE, INC
SYNERGY(TM) LICENSE
AND
SERVICES AGREEMENT
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SYNERGY(TM) LICENSE AND SERVICES AGREEMENT
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THIS SYNERGY(TM) LICENSE AND SERVICES AGREEMENT (this
"Agreement"), made as of the 27th day of August, 1998, is by and between
NETGENICS, Inc., a Delaware corporation with business offices at 1717 East Ninth
Street, Suite 1700, Cleveland, Ohio 44114 ("Licensor"), and GENETICS INSTITUTE,
INC. with business offices at 87 CambridgePark Drive, Cambridge, MA 02140.
(Genetics Institute, Inc., and its Affiliates, collectively, shall be referred
to herein as "Licensee"). "Affiliate", as used herein, shall mean any
corporation or other business entity directly or indirectly controlled by, or
under common control with American Home Products Corporation; as used herein,
the term "control" means possession of the power to direct, or cause the
direction of the management and policies of a corporation or entity, whether
through the ownership of voting securities, by contract or otherwise.
INTRODUCTION:
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Licensor has developed and owns certain interactive computer
software and hardware known as SYNERGY(TM) for use in the storage and analysis
of drug discovery data in a collaborative environment and provides certain
services, including but not limited to services to maintain and extend such
software and hardware; and
Licensor is willing to license the SYNERGY(TM) System (as
defined below) and provide the Services (as defined below) to Licensee upon and
subject to the terms and conditions of this Agreement; and Licensee desires to
license such System and obtain such Services upon such terms and conditions.
In consideration of the premises and the conditions and mutual
covenants contained in this Agreement, the parties agree as follows:
I. DEFINITIONS
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1.1 "Calendar Quarter" shall mean the three month period commencing on July 1,
October 1, January 1 and April 1 of each Contract Year during the term of this
Agreement. "Contract Year" shall mean the four Calendar Quarters following the
Commencement Date, and each successive Four Quarter period thereafter.
1.2 "Commencement Date" shall mean the effective date of this Agreement as set
forth above.
1.3 "Custom Software Module" shall mean the software, if any, developed for
Licensee by Licensor in accordance with the Custom Software Specifications and
Section 4 hereof.
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1.4 "Custom Software Specifications" shall mean the specifications, if any,
hereinafter agreed upon in writing by Licensor and Licensee and on which
Licensor will rely in enhancing, modifying, adapting or otherwise altering the
Licensed Software pursuant to this Agreement, as set forth on EXHIBIT D.
1.5 "Designated Location(s)" or "Site(s)" shall mean the location of business
facilities at which the Systems will be installed and for which Licensee has
paid a Fee, as set forth on EXHIBIT C.
1.6 "Fee" shall mean the consideration for the agreement of Licensor to: (a)
grant the License for the particular Designated Locations, and (b) provide
Services with respect to such Designated Locations. Fees shall be based upon the
License Type selected and any upgrade pursuant to Section 9.1, below.
1.7 "Hardware" shall mean the computer hardware and the third party software
described in EXHIBIT B; provided, however, that Licensor reserves the right to
substitute such hardware or software with functionally equivalent hardware or
software at any time during the term of this Agreement upon written notice to
Licensee. At a minimum, "functionally equivalent hardware or software" shall
mean hardware or software which: (a) is compatible with the Licensed Software
Specifications, the Custom Software Specifications, the Licensed Software, and
the Custom Software Modules, if any; (b) and is compatible with Licensee
Software which conforms to the Licensor Custom Software Guidelines, and which
does not materially alter or adversely affect the use of the System or the
Software or the Licensee Software which conforms to the Licensor Custom Software
Guidelines.
1.8 "License Type" shall mean the license of the System as provided for in this
Agreement, which shall provide access to the number of Users licensed under
EXHIBIT C for each Site and providing for the Licensor to provide to Licensee
Service Hours per Calendar Quarter as outlined in Exhibit I in exchange for a
Fee as set forth in Section 9.1 of this Agreement.
1.9 "Licensed Software" shall mean those components of the Software, in object
code form, to be delivered by Licensor to Licensee, and as described as such in
EXHIBIT A.
1.10 "Licensed Software Specifications" shall mean the specifications as
described in EXHIBIT A and in any documentation and release notes supplied with
subsequent Subscription Releases and Custom Software Modules, including, without
limitation, the functionality as described in EXHIBIT H as it is specified.
1.11 "Licensee Confidential Information" and "Licensor Confidential Information"
shall have the meanings ascribed to each of them in Section 10.22 of this
Agreement.
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1.12 "Licensee Intellectual Property Rights" shall mean the rights in Licensee
Software, Proprietary Components of Custom Software Modules (as defined in
Section 3.2 (e) herein) and Pharmaceutical Know-How (as defined in Section
2.4(a) herein), including, without limitation, patent, copyright, trademark,
service mark, trade secret and trade name rights therein. Notwithstanding the
foregoing, Licensee Intellectual Property shall not include any information
which: (A) was in the public domain prior to development by Licensee; (B) which,
after development by Licensee, becomes part of the public domain through
publication or otherwise except by breach of this Agreement or (C) which is
received from an independent third party which has the right to disclose it.
1.13 "Licensee Software" shall mean the software, if any, developed by, or on
behalf of, and owned by Licensee and incorporated or integrated into the
Software in accordance with the Licensor's Custom Software Guidelines as set
forth in EXHIBIT E.
1.14 "Licensor Custom Software Guidelines" shall mean the guidelines, if any,
used by Licensor and provided in writing by Licensor to Licensee, to which
Licensee must adhere in creating, enhancing, modifying, adapting or otherwise
altering Licensee Software.
1.15 "Licensor Intellectual Property Rights" shall mean Licensor's intellectual
property rights in the System, including, without limitation, patent, copyright,
trademark, service mark, trade secret and trade name rights therein.
Notwithstanding the foregoing, Licensor Intellectual Property shall not include
any information which: (A) was in the public domain prior to development by
Licensor; (B) which, after development by Licensor, becomes part of the public
domain through publication or otherwise except by breach of this Agreement or
(C) which is received from an independent third party which has the right to
disclose it.
1.16 "Party" shall mean Licensor or Licensee, or when used in plural, shall mean
both Licensor and Licensee.
1.17 "Services" shall mean all training, software planning and design, data
conversion, monitoring, support, providing updates, maintenance, enhancements
and modifications to the Licensed Software which Licensor makes available to its
licensees generally (e.g., Subscription Releases), providing hardware upgrades
(a) necessary to meet mutually agreeable minimum performance specifications and
data storage requirements and (b) which Licensor otherwise makes available to
its licensees generally, providing hardware maintenance for the Systems, and
hardware and software quality assurance testing, remote monitoring, telephone
and e-mail support services, on-site monitoring and customization services
provided by or on behalf of Licensor to Licensee pursuant to this Agreement.
1.18 "Service Hours" shall mean the number of hours designated for Services
under Exhibit I attached hereto to be provided by Licensor to Licensee for the
Services according to Sections 3.2, 4.1, and 4.3 of this Agreement.
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1.19 "Software" shall mean the Licensed Software, any and all Custom Software
Modules, any and all additions, enhancements, and modifications to the Licensed
Software and any Custom Software Module and any and all adaptations and
derivatives of the Licensed Software and any Custom Software Module in whatever
form, tangible or intangible (other than source code) including, without
limitation, additions, enhancements, modifications, adaptations and derivatives
incorporated in any Subscription Release or in any Custom Software
Specifications, and any portion and any copy or duplicate of any of the
foregoing. Notwithstanding the foregoing, Software shall not include Licensee
Software or Proprietary Components of Custom Software Modules, as defined in
Section 3.2(e).
1.20 "Specifications" shall mean the Licensed Software Specifications or any
Custom Software Specifications, as the context requires.
1.21 "Subscription Release" shall mean subsequent releases related to
Synergy(TM) Product 1 which Licensor shall use commercial diligence to deliver
on a periodic basis and to include bug fixes and enhancements to the Licensed
Software.
1.22 "System" shall mean the Software and the Hardware.
1.23 "User" shall mean (a) an employee, agent, consultant, contractor engaged by
Licensee and working at a Designated Location, or (b) an employee or agent of a
research or corporate collaborator who works for or on behalf of Licensee or as
part of a research or corporate collaboration and working at a Designated
Location, and (c) up to twenty-five (25) additional employees, agents,
consultants, contractors engaged by Licensee, or employees or agents of a
research or corporate collaborator who work for or on behalf of Licensee as part
of a research or corporate collaboration other than at a Designated Location;
provided, that Licensee shall provide written notice to Licensor of all such
Users, which notice shall contain the name, location and employer of such User,
and that no person who is not an employee of Licensee shall be deemed to be a
User until such person has delivered to Licensee the documentation referred to
in Section 2.3 (c) hereof .
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II. LICENSE
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2.1 GRANT OF LICENSE. Upon and subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee a nonexclusive, nontransferable,
personal license (the "License") to: (i) have Licensee's Users use the System,
including Subscription Releases, principally at each User's Designated Location
and solely in connection with pharmaceutical, agricultural, and
biopharmaceutical business of Licensee conducted at such User's Designated
Location, and (ii) have up to twenty-five (25) additional Users access and use
the System, including Subscription Releases, from business facilities which are
not Designated Locations solely in connection with Licensee's pharmaceutical,
agricultural, and biopharmaceutical business.
2.2 RESTRICTIONS ON LICENSEE'S USE OF THE SYSTEM.
(a) Except as expressly permitted in this Agreement, Licensee shall not
use, sublicense, sell, assign, convey, transfer, disclose, publish, display,
copy, duplicate, adapt, merge, embed, disassemble, decompile, translate, reverse
engineer or otherwise modify any portion of the System.
(b) Without limiting the generality of the restrictions contained in
Section 2.2(a), Licensee shall not (i) make any claim or representation of
ownership, or act as the owner, of any portion of the System or any right
therein, or permit or facilitate the performance of any act that is inconsistent
with or in violation of this Agreement or that might jeopardize the Licensor
Intellectual Property Rights, (ii) install the System at any location other than
the Designated Location(s), (iii) use the System to provide data processing,
computer service bureau computer time sharing or similar services to any other
person or entity, (iv) allow more than the number of Users designated in the
License Type to use the System, (v) allow any user other than a User to use the
System, (vi) use the System other than for the internal information processing
needs of Licensee in connection with the storage and analysis of data in
Licensee's pharmaceutical, agricultural, and biopharmaceutical business
(provided, that internal information processing needs of Licensee shall include
research activities of Licensee which are or may be performed in conjunction
with third party research or corporate collaborators, so long as members of such
research or corporate collaborators are provided access to the System pursuant
to Section 10.22 herein), (vii) modify any portion of the System without
Licensor's prior written consent, (which shall be deemed to have been granted in
connection with the development of Licensee Software in accordance with the
Licensor Custom Software Guidelines) and, to the extent applicable and provided
to Licensee, other than in accordance with Licensor's specifications therefor,
(viii) provide maintenance of or modify any portion of the System without
Licensor's prior written consent, which shall be deemed to have been granted
without request in connection with maintenance provided by third party software
and hardware comprising the Hardware when furnished by third parties with
respect to their components, and, to the extent any Specifications are
applicable and have been provided to Licensee in writing, other than in
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accordance with Licensor's Specifications therefor or (ix) allow access to more
than 12 Users from the same business facility other than a Designated Location.
2.3 PROTECTION OF INTELLECTUAL PROPERTY RIGHTS.
(a) The rights granted to Licensee in the System hereunder are only the
rights of a licensee, and no title or ownership of any component or
manifestation of any portion of the System is transferred to Licensee hereby.
All Licensor Intellectual Property Rights are and shall remain the exclusive
property of Licensor and all Licensee Intellectual Property Rights are and shall
remain the exclusive property of Licensee. Except as expressly set forth in this
Agreement, Licensee shall not have any right or interest in any component or
manifestation of any portion of the System.
(b) Licensee acknowledges that the System has been and will be
developed at great expense to Licensor, that the System constitutes valuable,
confidential and trade secret information of Licensor and that Licensor
possesses and will possess the Licensor Intellectual Property Rights therein.
Licensor acknowledges that the Licensee Software, as well as any Proprietary
Components of Custom Software Modules (defined in Section 3.2(e) and enumerated
as needed in EXHIBIT D), have been and/or will be developed at great expense to
Licensee, that the Licensee Software and Proprietary Components of Custom
Software Modules constitute valuable, confidential and trade secret information
of Licensee and that Licensee possesses and will possess the Licensee
Intellectual Property Rights therein. Accordingly, each Party shall use its
commercially reasonable and diligent efforts to ensure that the intellectual
property rights of the other Party are preserved for the other Party to the
fullest extent possible under the law including, without limitation, taking such
reasonable security precautions as the other Party may from time to time request
and such other precautions as are taken by that Party to protect its own
confidential information and proprietary rights, provided that each Party's
standard of care is at least reasonable according to software and pharmaceutical
industry standards.
(c) Licensee shall keep confidential and not disclose or permit access
to the System, Services or Licensee Software, except as provided in this Section
2.3(c). Licensee shall use the System, Services and Licensee Software only for
purposes consistent with the terms of this Agreement. Licensee shall advise its
employees, collaborators, consultants, agents and contractors of the
confidential and proprietary nature of the System, Services and Licensee
Software, and of the restrictions imposed by this Agreement, and shall: (i)
obtain from any and all non-employee Users (or from the employers of such
non-employee Users) their written agreement to comply with the obligations of
Licensee imposed by Article II and Section 10.22 of this Agreement and (ii)
shall be responsible for any breach of such agreement by any User, and (iii) use
its commercial and reasonably diligent efforts (so long as those efforts are at
least as diligent as those Licensee uses to protect Licensee Intellectual
Property Rights and are considered reasonable in the pharmaceutical and software
industries) to ensure that no unauthorized
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person has access to the System or the Services and that those persons who are
granted access to the System or the Services protect the Licensor Intellectual
Property in accordance with the terms of this Agreement.
(d) Licensee shall notify Licensor immediately of the possession, use,
or knowledge of any portion of the System, Services or Licensee Software by any
person or entity not authorized by this Agreement to have such possession, use
or knowledge. Licensee shall, to the best of its knowledge, (i) promptly furnish
to Licensor full details of Licensee's knowledge of such possession, use or
knowledge, (ii) reasonably assist Licensor, at no expense to Licensor (if
Licensee is responsible for such unauthorized possession) or at Licensor's
expense for Licensee's reasonable and actual person hours and costs incurred (if
Licensee is not responsible for such unauthorized possession), in stopping and
preventing the recurrence of such possession, use or knowledge, shall cooperate,
at Licensor's request and expense, with Licensor in any litigation deemed
necessary by Licensor to protect the Licensor Intellectual Property Rights, and
shall take no action regarding claims of infringement or alleged infringers of
the System, Services or Licensee Software without Licensor's written consent.
Compliance by Licensee with this Section 2.3(d) shall not be construed as a
waiver of any right of Licensor to recover damages or obtain other relief
against Licensee in connection with any such unauthorized possession, use or
knowledge.
(e) Each Party acknowledges and agrees that the affixation of a
copyright notice to the Software shall not, of itself, be deemed to constitute
or acknowledge a publication of the Software.
(f) Licensor shall be entitled to audit Licensee's use of the System
for compliance with the terms and conditions of this Agreement (either directly
or through its independent, nationally recognized outside auditors which are not
compensated on a commission or percentage basis) at any time, but not more than
once per Contract Year by any such outside auditor, during the term of this
Agreement and for one year thereafter. Licensor shall not unreasonably interfere
with Licensee's business operations during any such audit, and Licensee shall
provide such cooperation as Licensor may reasonably request in connection with
any such audit. In connection with any such audit, Licensor agrees to (i)
protect all Licensee Confidential Information with the same degree of care as
Licensor uses in protecting its own confidential information, but no less a
degree than is required under Section 10.22 of this Agreement; (ii) have any
outside auditors sign Licensee's customary confidentiality agreement; (iii) use
outside auditors (at Licensee's request and reasonable expense) when Licensee
reasonably determines there is a risk of competitive injury from disclosure of
Licensee Confidential Information to Licensor and (iv) provide Licensee with a
copy of its audit results.
(g) Without limiting the generality of the foregoing in this Section
2.3, each party acknowledges that the intellectual property rights of any third
party, including,
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without limitation, any rights in any third party software incorporated into the
System by way of a Custom Software Module, are the exclusive rights of that
party.
2.4 OWNERSHIP/ INVENTIONS. Licensee and Licensor acknowledge that performance of
this Agreement may result in the development of new concepts, methods,
techniques, data, know-how, processes, adaptations, ideas and expressions of
ideas.
(a) INVENTIONS RELATING TO PHARMACEUTICAL COMPOUNDS AND LICENSEE
SOFTWARE. Concepts, methods, techniques, data, know-how, processes, adaptations,
compounds, compositions of matter, ideas and expressions of ideas relating to
pharmaceuticals developed by or on behalf of Licensee ("Pharmaceutical
Know-How") and any Licensee Software developed by or on behalf of Licensee prior
to or during the course of this Agreement shall be and remain the exclusive
property of Licensee. Licensor shall have no right and no title or ownership of
any component or manifestation of any such Pharmaceutical Know-How, Proprietary
Components of Custom Software Modules, Licensee Software or resulting
pharmaceutical product developed by or on behalf of Licensee. All rights in such
Pharmaceutical Know-How, Proprietary Components of Custom Software Modules,
Licensee Software or resulting pharmaceutical products are and shall remain the
exclusive property of Licensee. Concepts, methods, techniques, data, know-how,
processes, adaptations, ideas and expressions of ideas relating to Licensee
Software or Proprietary Components of Custom Software Modules that incorporate
any Licensor Intellectual Property or Licensor Confidential Information, shall
be used by Licensee exclusively in conjunction with the System. Licensee
Software shall be owned by Licensee and Licensor shall only have right to use
Licensee Software for the benefit of Licensee for the purposes set forth in this
Agreement. Licensee grants to Licensor a non-exclusive, nontransferable right to
use Licensee Software at the Designated Locations in connection with the System
and Services provided in this Agreement.
(b) INVENTIONS RELATING TO LICENSED SOFTWARE, HARDWARE AND CUSTOM
SOFTWARE MODULES (OTHER THAN PROPRIETARY COMPONENTS OF CUSTOM SOFTWARE MODULES).
Concepts, methods, techniques, know-how, processes, adaptations, ideas and
expressions of ideas relating to the Licensed Software or any Custom Software
Module developed by or on behalf of Licensor during the course of this Agreement
shall be and remain the exclusive property of Licensor provided, however, that
(i) Licensor grants to Licensee a non-exclusive, nontransferable right to use
the Custom Software Module at the Designated Location(s) under the terms and
conditions of this Agreement, (ii) Licensor's rights in the Custom Software
Module shall not extend to any Licensee Software or to any proprietary software
of any third party person or entity which has been incorporated into the Custom
Software Module which is separately licensed by Licensor to Licensee as a
distributor or OEM of such products and (iii) Licensor shall have no rights,
other than as specified in this Agreement, and no title or ownership in any
Proprietary Components of Custom Software Modules as identified on Exhibit D by
the System Committee, pursuant to Section 3.2(e) herein. Custom Software Modules
shall not be used other than in conjunction with the System, unless the prior
written consent of Licensor has been
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obtained for each instance of such use, such consent from Licensor not to be
unreasonably withheld. Licensee's request for consent shall detail the nature
and scope of such use, including details regarding any other third-party
software that will interact with the Custom Software Module. In the event
Licensee has obtained written consent of Licensor for the use of a Custom
Software Module other than in conjunction with the System, Licensee acknowledges
that (A) Licensee shall not have the right to disclose any Licensor Intellectual
Property or Licensor Confidential Information to any non-employee of Licensee or
its Affiliates (regardless of whether such non-employee is otherwise deemed a
User within the context of this Agreement); (B) Licensor shall in no event be
obligated to provide Services in conjunction with any such use; and (C) no
warranties or indemnification of any kind shall extend to any Custom Software
Module used other than in conjunction with the System.
(c) PATENT APPLICATIONS RELATING TO THE USE OF THE SYSTEM, LICENSEE
SOFTWARE OR COMPONENTS OF CUSTOM SOFTWARE MODULES COMPRISED OF LICENSEE
PROPRIETARY INFORMATION. Licensor shall own all patent rights and shall have the
sole right, at its expense, to obtain patent protection relating to any
invention or discovery made relating to the System . Licensee shall own all
patent rights and shall have the sole right, at its expense, to obtain patent
protection relating to any invention or discovery made relating to the Licensee
Software, any Pharmaceutical Know-How and any Proprietary Component of Custom
Software Modules as identified by the System Committee and enumerated in Exhibit
D. The foregoing allocations of patent rights shall apply whether such invention
was invented solely by employees of Licensor, jointly by employees of Licensor
and Licensee, or solely by employees of Licensee. To the extent any such
invention or discovery was made by an employee of a party not having ownership
and patent responsibility (the "Filing Party"), the other party agrees to
cooperate, at the Filing Party's expense and request, in the filing and
prosecution of any such patent, and agrees to assign its interest in any such
invention to the Filing Party.
III. SUPPORT SERVICES
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3.1 SUPPORT SERVICES. Licensee shall be entitled to receive Services from
Licensor during the term of this Agreement as described below. Services provided
pursuant to Section 3.1 shall not be treated as Service Hours and shall not be
subject to any additional charges or fees:
(a) REMOTE SYSTEM SUPPORT. Licensor will provide unlimited remote
consultation regarding the System, comprised of support, problem determination
and resolution Service by telephone and electronic mail 24 hours per day, 365
days per year.
(b) REMOTE ACCESS AND SYSTEM MONITORING. Licensee shall, upon request
and as needed, grant Licensor remote access to the System to fulfill obligations
to be performed by Licensor pursuant to this Agreement, including, but not
limited to, purposes of monitoring the performance and integrity of the System
and for problem
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determination and resolution and for other purposes consistent with the terms of
this Agreement; provided, however, that Licensee, at its option, may require
that Licensor perform such monitoring Services on site at the Designated
Locations pursuant to Section 3.2. Licensee and Licensor shall mutually agree on
any necessary access conditions for non-critical access and maintenance.
(c) RESPONSE TIME. All requests by Licensee for support shall be made
by way of designated phone, email or pager to Licensor's client services group
shall be responded to by Licensor according to the escalation procedures set
forth on EXHIBIT J.
Subsection (d) is an open issue
(d) LICENSOR EXTENSIONS TO THE SYSTEM. Licensor agrees to complete, at
no cost to Licensee, the release of the features set forth on EXHIBIT H for
acceptance on or before December 31, 1998, which shall be part of the System. If
Licensor is unable to deliver such functionality as set forth in Exhibit H by
December 31, 1998, Licensee shall have the right to defer payment of the Fee for
the first Calendar Quarter of 1999, and any subsequent Calendar Quarter (s),
until all of such functionality listed on EXHIBIT H is substantially completed,
unless otherwise agreed between the Parties. In the event that such EXHIBIT H
functionality remains unaccepted as of March 31, 1999 under the procedures
outlined in Section 5.1, either Party shall have the right to terminate this
Agreement and Licensee shall have the right to return the System(s) for a
complete refund of all Fees paid to date. In addition, Licensor agrees to
develop, as a priority, the additional post-1998 functionality set forth on
EXHIBIT H on a mutually-agreed schedule. The parties shall, in good faith, agree
upon specifications for such additional post-1998 functionality, on the number
(if any) of Service Hours to be used for the completion of such functionality,
on a timetable for the development of such functionality, and on a remedy for
non-performance on or before December 31, 1998. Licensor and Licensee agree to
abide by the process set forth in Section 4.1 (a) of this Agreement (with the
exception that disputes shall be resolved by the Steering Committee as defined
in Section 10.10, in lieu of an outside arbitrator as otherwise provided), which
otherwise pertain to the development of Custom Software Modules, in reaching
agreement on the aforementioned items. The specifications and the timetable
shall balance Licensees needs to have such functionality available in 1999, and
the feasibility of developing such functionality. If the parties are unable to
reach agreement upon these matters on or before December 31, 1998, then Licensee
shall have the right to treat such failure as a failure to deliver the EXHIBIT H
functionality required for delivery on or before December 31, 1998 and exercise
the Fee deferral rights described above.
(e) LIMITATIONS. Licensor shall in no event be obligated to provide
support, under this Section 3.1, to Users who are not working from a Designated
Location, insofar as any request for support is directly related to, or directly
caused by, User's access to the system from a remote location (other than a
Designated Location).
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3.2 USE OF SERVICE HOURS. As a part of the Fee, Licensee is entitled to receive
from Licensor the number of Service Hours set forth in EXHIBIT I of this
Agreement. Section 3.2 sets forth the manner in which Service Hours may be used
by Licensee. Except as expressly provided for in this Agreement, any unordered
Service Hours at the end of a Calendar Quarter shall be forfeited and canceled.
Service Hours may be allocated among such types of Service in any combination
selected by Licensee. Except as expressly set forth in EXHIBIT L (Use of Service
Hours), which may be revised from time to time as necessary, the number of
Service Hours deemed to be used for any Service request shall be the number
specified by written notice to Licensee prior to the commencement of such
Services, as determined by Licensor in its reasonable discretion.
(a) If the Service Hours referred to in the previous paragraph are
requested, and Licensor is unable or unwilling to provide such Services for the
purposes ordered during such Calendar Quarter, Licensor shall have the right
once per Contract Year to delay the provision of such requested Service Hours
until the next Calendar Quarter subsequent to the Calendar Quarter for which the
request is made, and the Service Hours associated with the completion of such
request shall be credited to that next subsequent Calendar Quarter, for the
completion of such requested Service. If Licensor is unable or unwilling to
provide such Services during that subsequent Calendar Quarter, such unfurnished
Service Hours shall, at the option of Licensee, be credited at the rate of
[******] per hour against the amount reflected in the Fee for such Service Hours
the subsequent Calendar Quarter(s) or refunded to Licensee, in addition to any
other remedies available under this Agreement.
(b) During one (1) Calendar Quarter per Contract Year, an "Advance" may
be requested for additional Service Hours in that Calendar Quarter. Such request
for an Advance delivery of Service Hours shall not exceed one thousand one
hundred and twenty-five (1125) Service Hours (plus one hundred and twenty five
(125) Service Hours per Calendar Quarter in the first Contract Year), and can be
drawn, at Licensee's option, from the Service Hours to be delivered during the
one or more of the remaining Calendar Quarters in that Contract Year. A request
for an "Advance" shall be made in writing, not less than thirty (30) days in
advance of the requested delivery of Service Hours to be Advanced. In the event
that a request for Service Hours under an Advance is made during the Calendar
Quarter in which the Services Hours are requested, Licensor may, at its
discretion, limit the Service Hours to be Advanced to twenty (20) incremental
hours per week during that Calendar Quarter. Notwithstanding the foregoing,
Licensee may not request an Advance of hours, prior to December 31, 1998, for
the purposes of designing or developing Custom Software Modules.
(c) ON-SITE SYSTEM SUPPORT. Licensor agrees to provide support
personnel, on or near Licensee's Andover, MA site, for a period of four (4)
weeks following the Commencement Date. Upon request from Licensee, Licensor
shall use all commercially reasonable efforts to provide Licensee with on-site
support Services, and the number of Service Hours shall be deducted from the
Service Hours available to
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CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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Licensee in exchange for such on-site Services, provided, however, that Licensee
shall be charged with a minimum of four (4) Service Hours for any on-site visit.
Licensor shall be provided with a mutually-agreed maintenance window on the
System of no less than one (1) hour per week in which Licensor may take the
System down for routine maintenance at scheduled times without causing a breach
of this Agreement.
(d) CUSTOMIZATION SERVICES. Licensee may request, and Licensor shall be
obligated to provide in accordance with the terms of this Agreement,
customization Services from Licensor by completing a Customization Software
Request in the form attached hereto as EXHIBIT D, detailing the customization
Services requested. Licensor shall estimate the amount and type of Services
required for such customization, and forward to Licensee a written response.
After review and approval in writing by the parties of the completed EXHIBIT D
covering a customization project, Licensor shall perform such customization
Services. During a customization project, the amount of the number of Service
Hours set forth in EXHIBIT D as completed shall be deducted from those available
to Licensee under this Agreement. Payment for Services provided by Licensor on a
customization project in excess of such available Service Hours shall be based
on the hourly rates of Licensor set forth on EXHIBIT G or as otherwise mutually
agreed in writing by the parties. The maximum number of Service Hours to be used
for any Service request shall be the number agreed to pursuant to Section 4.1 of
this Agreement.
(e) PROPRIETARY COMPONENTS OF CUSTOM SOFTWARE MODULES. Except as
otherwise provided in Section 4.1 of this Agreement, Licensee shall have the
right to request and Licensor shall be obligated to design and deliver Custom
Software Modules containing Licensee Intellectual Property, Licensee
Confidential Information and/or Licensee Pharmaceutical Know-How. In each such
instance, the System Committee (as defined in Section 10.10 of this Agreement)
shall meet and shall jointly determine which concepts, methods, techniques,
data, know-how, processes, adaptations, compounds, compositions of matter, ideas
and expressions of ideas both: (a) are necessary to the Custom Software Module
(b) do not contain Licensor Intellectual Property, (c) provide competitive
advantage to Licensee (such components, jointly and separately, known
"Proprietary Components of Custom Software Modules") As used here, a Proprietary
Component of a Custom Software Module may be recognized as a stand-alone
package. All Proprietary Components of Custom Software Modules shall be
identified in writing on EXHIBIT D, as same may be amended from time to time.
Proprietary Components of Custom Software Modules shall not be used by Licensor
in any customization request submitted by any third party customer of Licensor.
In the event the System Committee is unable to agree on any part of the
procedure outlined in this subparagraph, the dispute shall be resolved according
to the procedure outlined in Section 10.10 of this Agreement. Nothing contained
herein shall restrict Licensor from developing Custom Software Modules for any
third party that do not contain any Proprietary Components of Custom Software
Modules as defined in this Section 3.2 (e).
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(f) ON- SITE SYSTEM MONITORING. In the event Licensee requests that
Licensor provide on-site monitoring in lieu of remote site support otherwise
available under Section 3.1(b) of this Agreement, Licensee shall be charged
fifty-two (52) Service Hours each Calendar Quarter therefor, prorated on a daily
basis for any partial Calendar Quarter, and shall pay all of Licensor's
reasonable out-of-pocket expenses incurred in connection with performing such
monitoring services, including, without limitation, travel, lodging and meals
expenses.
(g) ACCOUNTING OF SERVICE HOURS; REPORTS. Service Hours shall be
accounted for on a Calendar Quarter basis and Licensor shall provide Licensee
with monthly cumulative reports during each Calendar Quarter detailing projects
for which Service Hours were used and the number of Service Hours used. Until
Licensee has exhausted its Service Hours for any Calendar Quarter, all such
on-site Services (except on-site System monitoring described in the previous
paragraph) including, without limitation, any reasonable out-of-pocket expenses
incurred by Licensor in connection therewith, shall be at Licensor's expense.
Once Licensee has exhausted its Service Hours for any Calendar Quarter, it shall
be charged for any such additional Service at the billing rates set forth in
EXHIBIT G (or as otherwise mutually agreed in writing by the parties), and shall
reimburse Licensor for any reasonable out-of-pocket expenses incurred by
Licensor in connection therewith, including, without limitation, travel, lodging
and meals expenses. Licensee shall have the right to request reasonable
documentation and receipts in support of any reimbursement of out-of-pocket
expenses.
3.3 ADDITIONAL SERVICES. Licensor shall have the right in its sole discretion to
agree to provide Services to Licensee beyond Licensee's available then unused
Service Hours, or in addition to the support services to be provided pursuant to
Section 3 hereof, including, without limitation, Services in connection with any
Custom Software Specifications or other programming Services, training services
and data conversion Services. All such Services shall be performed at the
billing rates set forth in EXHIBIT G and upon and pursuant to such other terms
and conditions as Licensor and Licensee mutually agree in writing.
3.4 Hardware Upgrades. Licensor shall notify Licensee as soon as is practicable,
but at least one (1) month in advance, of any routine Hardware upgrade or
substitution to be made by Licensor. Prior to or concurrent with such advance
notice, Licensor shall provide Licensee with a project plan covering such
upgrade or substitution which shall contain details regarding the scope, upgrade
process, Hardware specifications and upgrade procedure. Licensee shall have the
right to review, comment upon and approve routine Hardware Upgrades, and shall
have the right, upon written notification to Licensor prior to any such planned
Hardware upgrade, to defer implementation of same for up to six (6) months.
Licensee's approval to any routine Hardware upgrade shall be evidenced by its
written countersignature to the Hardware upgrade or substitution project plan.
In the event Licensee fails to implement a Hardware upgrade which is
functionally equivalent (as defined in Section 1.8 of this Agreement) under the
procedure set forth in
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this paragraph, Licensor shall have the right, to the extent affected by
Licensee's delay, to defer (a) Licensee's receiving Software upgrades, in the
form of Subscription Releases and Custom Software Modules (including any
Proprietary Components thereof) and (b) support obligations for Licensee
Software, and the warranties and indemnification obligations (in each case, to
the extent any such Hardware upgrade is necessary to provide such support or to
fulfill such warranty or indemnification obligation) described in this Agreement
shall cease to apply. In the event that a Hardware upgrade is not functionally
equivalent, Licensor shall be obligated to correct any failures to perform, or
to revert to the prior System configuration (including Hardware and any
Software) until Licensor is able to do so.
IV. CUSTOMIZATION METHODOLOGY
-------------------------
4.1 CUSTOMER SOFTWARE SPECIFICATIONS.
(a) If Licensee desires that the Licensed Software be modified,
customized or adapted in any respect to suit Licensee's specific requirements
through the development of Custom Software Modules, Licensee shall deliver to
Licensor written notice thereof, in the form of EXHIBIT D attached hereto,
specifying Licensee's requirements in as much detail as possible. Upon receipt
of such notice, Licensor and Licensee shall cooperate in good faith to agree
upon the scope of such Services, the Custom Software Specifications, any
portions of the Custom Software Module to be deemed a Proprietary Component of
the Custom Software Module, timetable for development and implementation and
cost therefor, provided, however, that nothing in this Agreement shall be deemed
to (i) obligate Licensor to perform any Services in excess of those available by
way of Licensee's then available Service Hours or (ii) provide Services related
to Custom Software Modules which are infeasible. Such agreement shall be set
forth in writing referencing this Agreement and shall be incorporated herein as
EXHIBIT D. If the parties are unable to agree on the number of Service Hours
needed for a particular project or projects after good faith discussions over a
thirty (30) day period, the Licensee shall have the right to either drop the
request for services or submit the matter to the System Committee (as defined in
Section 10.10 of this Agreement) for dispute resolution as provided for
thereunder. If the matter cannot be resolved by the System Committee within five
(5) business days of submission, each Party shall pick a final reasonable
estimate of the Services Hours they estimate for the project, and the two
estimates shall be considered by the officers designated in Section 10.10. If
such officers cannot resolve the matter within five (5) business days, each
Party's final reasonable estimate shall be provided to a mutually agreeable
expert within ten (10) additional days. The parties shall promptly meet with the
expert and explain the basis for their estimates, and the expert shall pick the
estimate that he or she determines is most reasonable and shall not be
authorized to fashion an alternate solution. The selection of one Party's
estimate shall be a final and binding decision on the number of Service Hours to
be charged for the project. If the expert selects Licensor's final estimate,
Licensee shall have the right to rescind the request for such Services. In the
event Licensee rescinds such request,
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Licensor's time used in development of requirements and design for such request
shall be charged against Licensee's then-available Service Hours.
(b) To the extent the number of Service Hours that Licensor estimates
will be required to complete a Custom Software Module during a Calendar Quarter
exceeds Licensee's then unused Service Hours for such Calendar Quarter, such
customization Services shall be charged to Licensee at the billing rates set
forth on EXHIBIT G or at such other rates as the parties mutually agree in
writing. However, nothing in this Section 4.1 (b) shall constitute an obligation
of the Licensor to provide a Custom Software Module in excess of the
then-available Service Hours for the Calendar Quarter. Licensor shall have the
right, at its sole discretion, to defer any such Custom Software Module to a
subsequent Calendar Quarter. In the event Licensor elects to defer any such
Custom Software Module, the Custom Software Module shall be charged against
Licensee's available Service Hours for that subsequent Calendar Quarter.
(c) Subject to the limitations set forth in Sections, 7.1 (e) and 7.2
hereto, Licensor warrants that a Custom Software Module, once completed and
accepted by Licensee in accordance with the terms hereof, shall perform in all
material respects in accordance with the Custom Software Specifications, and
Licensor shall correct any errors or failures to perform within the time period
specified for error or failure correction in a Custom Software Module request
and provide Licensee written notice of such correction If Licensor fails to
correct any error or failure as set forth in the previous sentence, Licensee
shall have the right to either (i) extend the period of time for Licensor to
correct such error or defect, (ii) accept the Custom Software Module as is,
(iii) accept the Custom Software Module with a refund of a reasonably agreed
pro-rata portion of Service Hours or supplemental payments allocable to the
value of the non-performing Custom Software Module or (iv) return the Custom
Software Module for a refund of Service Hours and/or any supplemental payments
made by Licensee to Licensor for such Custom Service Module in amount equal to:
(a) 50% of such Service Hours where the Custom Software Module is a Proprietary
Component of a Custom Software Module and 100% of such Service Hours where it is
a not proprietary to Licensee. Notwithstanding the foregoing, Licensor shall not
be obligated to refund Service Hours, in the event that the Steering Committee
determines the failure of any such Custom Software Module is due to cause other
than failure of Licensor to meet the Custom Software Specifications.
4.2 CUSTOM SOFTWARE MODULE INSTALLATION AND ACCEPTANCE.
(a) Licensor shall use all commercially reasonable efforts to install
Custom Software Modules in accordance with the schedule set forth in EXHIBIT D,
subject to Licensee performing its obligations under this Agreement and
providing such cooperation as Licensor may reasonably request to facilitate such
installation. Such installation with respect to any Custom Software Module shall
be deemed complete upon written notice from Licensor to Licensee.
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(b) A Custom Software Module, with respect to which any notice has been
provided by Licensor, shall not be deemed to be accepted under this Agreement
unless and until:
(I) such Custom Software Module materially conforms to the
Custom Software Specifications as agreed in Exhibit D therefor; and
(II) Licensee fails to give notice of non-acceptance to
Licensor within the time period specified in a Custom Software Module
request (which shall be not less than ten (10) or more than forty-five
(45) days after the receipt by Licensee of a Custom Software Module)
pursuant to Licensor's notice of Custom Software Module installation.
Any notice of non-acceptance shall state specifically the specifications, and
manner in which the Custom Software Module fails to conform to such
specifications, with sufficient specificity to permit Licensor to correct such
nonconformity. Licensor shall use reasonable efforts to correct any such
nonconformity found to exist and notify Licensee of the completion of such
correction. If Licensor is unable to make such corrections, Licensee's remedy
shall be as provided in Section 4.1 (c) of this Agreement.
4.3 LICENSEE SOFTWARE.
(a) Prior to developing any module of Licensee Software to be covered
by the warranty provisions of Section 7.1, Licensee shall have: (i) received
from Licensor a current copy of Licensor Custom Software Guidelines described in
EXHIBIT E covering such module,(ii) submitted a proposal to Licensor describing
the methodology, specifications and timetable of such Licensee Software and
(iii) received Licensor's approval to the development of such Licensee Software.
Licensee shall then have the right to develop Licensee Software modules in
accordance with the Licensor Custom Software Guidelines covering such module.
Licensor shall provide certification for Licensee Software modules to be
incorporated into the System according to the Licensor Custom Software
Guidelines following quality assurance testing of such Licensee Software by
Licensor. All Licensor activities under this section 4.3 (a) shall be charged
against the Licensee's then-available Service Hours for the Calendar Quarter.
Licensee Software developed other than in accordance with all provisions of this
Section 4.3 (a) shall void warranty rights as provided in Section 7.1 (d)
herein, to the extent that any such claim of warranty is attributable to the
implementation of such Licensee Software.
(b) Subject to the scope of any Licensor Custom Software Guideline,
Licensor warrants that the Licensor Custom Software Guidelines shall be written
in sufficient detail to provide Licensee with adequate information about the
Licensed Software and the System so that a reasonably skilled software
programmer will be able to design Licensee Software modules compatible with the
Licensed Software. During the course of this Agreement, Licensor agrees to
provide any Licensor Custom Software Guidelines to
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Licensee as soon as is practicable after they are produced, and shall provide
such revisions to Licensor Custom Software Guidelines as are appropriate. Upon
request, Licensor shall produce such Licensor Custom Software Guidelines as are
needed and shall provide same to Licensee. Notwithstanding the foregoing, the
Parties agree that Licensor shall not be under an obligation to produce Licensor
Custom Software Guidelines covering software modules that are unfeasible.
V. INSTALLATION, ACCEPTANCE AND TRAINING
-------------------------------------
5.1 INSTALLATION AND ACCEPTANCE OF SYSTEM AND THE LICENSED SOFTWARE.
(a) Licensor shall use all commercially reasonable efforts to install
the first System and the Licensed Software in Andover, MA and the Development
System (defined in EXHIBIT C) in Cambridge, MA (collectively, the "First
Systems") on or before the Commencement Date, subject to Licensee performing its
obligations under this Agreement and providing such cooperation as Licensor may
reasonably request to facilitate the installations of the First Systems.
Subsequent installations of the System (each an "Additional System") shall be
made pursuant to and in accordance with an installation roll-out plan approved
in writing by the Parties within forty-five (45) days of the Commencement Date.
Such installation with respect to each System and the Licensed Software shall be
deemed complete upon written notification from Licensor; however, each System
shall not be deemed to be accepted under this Agreement unless and until the
earlier of Licensee providing written notice of acceptance based on conformance
of the System to an acceptance plan to be provided by Licensor or:
(I) For the First Systems, the System materially conforms to and
performs in accordance with the Specifications therefor; and Licensee
fails to give notice of non-acceptance within ten (10) business days
after receipt of installation notice.
(II) For each Additional System, such Additional System is connected to
and synchronized with each of the other Systems installed at that time
(except for the Development System, which shall not be synchronized
with any of the Systems); and Licensee fails to give notice of
non-acceptance within forty-five (45) days after receipt of
installation notice.
Any notice of non-acceptance shall state specifically the Specifications, and
manner in which a System fails to conform to such Specifications, with
sufficient specificity to permit Licensor to correct such nonconformity.
Licensor shall use reasonable efforts to correct any such nonconformity found to
exist and notify Licensee of the completion of such correction. If Licensor is
unable to make such corrections, Licensee's remedy shall be limited to
correction or replacement of the nonconforming portion of the System. Licensee
shall cooperate with Licensor in correcting such nonconformity. In the event
that a System remains non-accepted for more than thirty (30) days after a notice
of non-acceptance is received by Licensor from Licensee, Licensee shall have the
right to
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withhold a pro-rata portion of a Calendar Quarter payment of the applicable Fee
until such non-acceptance is corrected by Licensor. For this purpose, the
pro-rata portion of the Calendar Quarter payment shall be the percentage of the
non-accepted Systems scheduled to be installed under the roll-out plan. If,
after three (3) months, Licensor is unable to make such corrections, either
Party, at its option, shall have the right to terminate this Agreement, and
Licensee shall have the additional right to return the System(s), and Service
Hours previously charged to Licensee shall be refunded less a pro-rata share of
amounts paid for any Sites which the System was previously accepted. For this
purpose, the pro-rata share shall be the percentage of the accepted Systems
scheduled to have been installed under the roll-out plan. All provisions of this
Section 5.1 shall also be subject to the provision set forth in Section 3.1 (d)
of this Agreement.
(b) TRAINING. Upon the initial installation and acceptance by Licensee
of the Licensed Software as provided in this Section 5.1(a), Licensor shall
provide two (2) days of on-Site end User training per System at no additional
charge to Licensee. Licensee shall also provide three (3) days training to up to
three (3) developers per Site at no additional charge to Licensee. Both of these
training options are "open attendance", and trainees at any Site can attend a
training session at another Site. Additional training beyond the initial days of
training per System described above will be deducted from the Licensee's Service
Hours or, if Licensee has exhausted its Service Hours for the quarter, will be
charged to Licensee at Licensor's the billing rates set forth in EXHIBIT G.
VI. LICENSEE RESPONSIBILITIES
-------------------------
6.1 Licensor's performance under this Agreement is contingent upon Licensee
providing such cooperation as Licensor may reasonably request including, but not
limited to providing or performing, the following:
(a) Following the construction of the new computer room in
Licensee's Andover facility which is expected to be completed in August 1998,
sufficient and appropriate physical space at each Site for the Hardware in a
controlled area such as a data center or computer room such that the Hardware is
physically secured and environmentally controlled;
(b) Electrical power source in close proximity to the location of
the Hardware;
(c) Physical connection to Licensee's network, firewall or gateway
(as applicable), in proximity to the location of the Hardware;
(d) Technical information regarding the addressing and configuration
of Licensee's DNS (Domain Name Services) and electronic mail servers sufficient
to allow Licensor's server to communicate with Licensee's servers;
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(e) A minimum of two (2) valid network names (host, node or machine
names) and their associated Internet Protocol addresses; and
(f) Reasonable assistance of Licensee's personnel.
It being understood by the Parties that all Systems included on EXHIBIT
C are intended to be installed and synchronized under the mutually-agreed
roll-out plan referenced in Section 5.1 (a), that no Additional Systems (other
than the Cambridge System) shall be installed until the functionality listed on
Exhibit H is completed and accepted, and that Licensee shall have it facilities
available for installation and acceptance on the date(s) the Systems are
mutually agreed to be installed, according to the aforementioned plan. A choice
by Licensee not to implement the System at a Site will not alter the Fees under
this Agreement unless it is attributable to the non-performance of the Licensor.
VII. WARRANTY; DISCLAIMER; LIMITATIONS; INDEMNIFICATION
--------------------------------------------------
7.1 WARRANTY; DISCLAIMER.
(a) Licensor warrants that from the date that the System or a Custom
Software Module (including any applicable Proprietary Component of a Custom
Software Module used in conjunction with that Custom Software Module), as the
case may be, is accepted by Licensee, the System or such Custom Software Module
will perform in all material respects in accordance with the Specifications
therefor, provided the System or such Custom Software Module is used on the
Hardware (or as otherwise agreed by Licensor) in accordance with the
instructions therefor.
(b) Licensor further represents and warrants that System (including,
without limitation, any Custom Software Modules) will correctly calculate,
compare and manage data involving dates and will not cause an abnormal
termination of or within the System or result in incorrect or invalid values or
calculations generated involving such dates, provided that all products not
supplied by Licensor which exchange date data with the System do so correctly
and in a form compatible with the System. In the event the System or any
Proprietary Component of any Custom Software Module is non-compliant with
respect to this Section 7.1 (b), Licensor shall, at no cost to Licensee, use all
commercially reasonable efforts to promptly correct such non-compliance and
provide such correction to Licensee.
(c) THE HARDWARE MAY CONTAIN THIRD-PARTY SOFTWARE WHICH IS THE SUBJECT
OF LICENSES BETWEEN LICENSOR AND THE MANUFACTURER OF SUCH THIRD-PARTY SOFTWARE.
LICENSOR WARRANTS, THAT TO THE BEST OF ITS KNOWLEDGE, IT HAS NOT INCLUDED ANY
THIRD PARTY HARDWARE OR SOFTWARE WHICH INFRINGES THE INTELLECTUAL PROPERTY
RIGHTS OF A THIRD PARTY. LICENSOR DOES NOT WARRANT ANY SUCH THIRD-PARTY
SOFTWARE, AND
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NO SUCH THIRD PARTY ASSUMES ANY LIABILITY REGARDING THE USE OF SUCH THIRD-PARTY
SOFTWARE OR UNDERTAKES TO FURNISH THE LICENSEE WITH ANY SUPPORT OR INFORMATION
REGARDING SUCH THIRD-PARTY SOFTWARE UNLESS IT IS PURSUANT TO A SEPARATE
AGREEMENT BETWEEN SAID THIRD PARTY AND LICENSEE. ANY LIABILITY OF ANY SUCH
MANUFACTURER OF SUCH THIRD-PARTY SOFTWARE SHALL BE LIMITED IN SCOPE TO ANY
AGREEMENT BETWEEN LICENSOR AND ANY SUCH MANUFACTURER. THIRD PARTY MANUFACTURERS
OF SOFTWARE WHICH IS INCORPORATED INTO THE SYSTEM MAY BE LICENSOR'S THIRD PARTY
BENEFICIARIES TO THIS AGREEMENT.
(d) UPON RECEIPT OF CERTIFICATION OF LICENSOR IN ACCORDANCE WITH
SECTION 4.3 (a) APPLYING TO ANY LICENSEE SOFTWARE, LICENSOR WARRANTS THAT THE
SYSTEM INCORPORATING ANY SUCH LICENSEE SOFTWARE SHALL PERFORM IN ACCORDANCE WITH
THE SYSTEM SPECIFICATIONS. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 7.1
(d), LICENSOR DOES NOT MAKE ANY AND EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES
WITH RESPECT TO LICENSEE SOFTWARE
(e) LICENSOR DOES NOT MAKE ANY AND EXPRESSLY DISCLAIMS ALL WARRANTIES
OTHER THAN THE WARRANTY EXPRESSLY MADE IN SECTIONS 4.1, 4.3, 7.1(a), 7.1(b) AND
7.1(d) HEREOF, 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.
7.2 LIMITATIONS.
(a) LICENSEE'S EXCLUSIVE REMEDY FOR ANY BREACH OF THE WARRANTY MADE IN
SECTIONS 4.1(c), 4.3(b), AND 7.1 (a ) AND (b) SHALL BE LIMITED TO (i) THE
CORRECTION OR REPLACEMENT OF THE NONCONFORMING PORTION OF THE SYSTEM, OR, IF (i)
IS NOT SUCCESSFUL IN A REASONABLE PERIOD OF TIME, EITHER (ii)THE REFUND
RETROACTIVELY AND FUTURE REDUCTION PROSPECTIVELY OF A PRO RATA PORTION OF THE
FEE WITHOUT THE RETURN OF THE SYSTEM, OR (iii) A REFUND OF ALL FEES PAID TO
DATE, WITH THE RETURN OF THE ENTIRE SYSTEM, WHICHEVER SHALL BE ELECTED BY
LICENSEE. LICENSEE'S EXCLUSIVE REMEDY FOR ANY BREACH OF THE WARRANTY MADE IN
SECTION 7.1 (d) SHALL BE THE (I) CORRECTION OF THE SYSTEM AND/OR THE LICENSEE
SOFTWARE, OR IF (I) IS NOT SUCCESSFUL, A REFUND OF A PRO-RATA PORTION OF THE FEE
WITHOUT THE RETURN OF THE SYSTEM,
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WHICHEVER SHALL BE ELECTED BY LICENSEE. THE WARRANTIES SET FORTH IN SECTION 4.1
(c), 4.3 (b) AND 7.1 (a) AND (d) SHALL RUN FOR A PERIOD OF ONE (1) YEAR
FOLLOWING THE ACCEPTANCE OF WARRANTED ITEM. THE WARRANTY SET FORTH IN SECTION
7.1(b) SHALL RUN UNTIL DECEMBER 31, 2001.
(b) NEITHER PARTY SHALL IN ANY EVENT BE LIABLE FOR ANY CONSEQUENTIAL
(EXCEPT FOR THE INDEMNIFICATION OBLIGATION UNDER SECTION 7.3, INSOFAR AS IT
COVERS PERSONAL INJURY OR PROPERTY DAMAGE, AND CONFIDENTIALITY AND USE
RESTRICTION OBLIGATIONS UNDER SECTION 2.3 AND CONFIDENTIAL INFORMATION UNDER
SECTION 10.22), INCIDENTAL, EXEMPLARY OR SPECIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO LOST PROFITS OR REVENUES, LOSS OF DATA, BUSINESS INTERRUPTION OR
LOSS, RECOVERY OR SUBSTITUTION COSTS, CLAIMS BY THIRD PARTIES, OR ECONOMIC
DAMAGES, WHETHER CLAIMED UNDER CONTRACT, TORT OR ANY OTHER LEGAL THEORY, ARISING
OUT OF THE USE OF OR INABILITY TO USE THE SYSTEM.
(c) IF ANY OF THE LIMITATIONS ON THE LIABILITY OF LICENSOR PROVIDED FOR
IN THIS AGREEMENT ARE FOUND TO BE INVALID FOR ANY REASON WHATSOEVER BY A COURT
OF COMPETENT JURISDICTION, LICENSEE AND LICENSOR EXPRESSLY AGREE THAT THE
MAXIMUM LIABILITY OF LICENSOR UNDER SUCH CIRCUMSTANCE SHALL NOT EXCEED ONE
HUNDRED PERCENT (100%) OF THE TOTAL FEES PAID BY LICENSEE TO LICENSOR IN THE
TERM SUCH LIABILITY WAS FIRST ALLEGED, IN ADDITION TO ANY OTHER EXPRESS REMEDIES
PROVIDED FOR UNDER THE TERMS OF THIS AGREEMENT THAT DO NOT PERTAIN TO THE
REPAYMENT OF FEES.
(d) THE WARRANTIES MADE UNDER THIS AGREEMENT EXTEND ONLY TO LICENSEE.
7.3 INDEMNIFICATION. If any claim is made against Licensee asserting that the
System or any Custom Software Module, or any Proprietary Component of such
Custom Software Module (developed by Licensor used in connection with that
Custom Software Module) infringes any United States patent, copyright or other
intellectual property right, Licensor shall, at the option of Licensor, either
(a) defend Licensee against such claim; (b) acquire for Licensee the right to
continue using such System or such Custom Software Module; or (c) replace such
System or such Custom Software Module with other Hardware or Software or Custom
Software Module for which there exists no infringement claim or modify such
System or such Custom Software Module to make it non-infringing so long as it
serves substantially the same purpose and function and does not materially
affect the performance of the System as being used by Licensee; provided,
however, that Licensor shall have no liability or obligation to Licensee under
this Section
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7.3 to the extent any such copyright infringement claim is attributable to : (i)
Licensor's compliance with any Licensee specifications; (ii) any modification of
any portion of the System or Custom Software Module by Licensee not agreed to in
writing by Licensor; (iii) failure of Licensee to use the then most current
version of the System or Custom Software Module (should Licensor give notice to
Licensee that such updated versions of the System remedy such non-performance or
infringement); (iv) the use of the System, Custom Software Module (or
Proprietary Component thereof) or Services in combination with software or
hardware not licensed by Licensor; (v) the use of the System or Custom Software
Module, any Proprietary Component of any Customer Software Module, any Licensee
Software or Services in a manner inconsistent with this Agreement; (vi) a
patent, copyright or other intellectual property right claim in which Licensee
or any affiliate or subsidiary of Licensee has any direct or indirect interest
by license or otherwise which Licensee has the right to practice without
incurring additional royalties or other payments and with respect to which
Licensee has the right to control enforcement against Licensor or (vii) any
material breach by Licensee of the terms of this Agreement which increases
Licensor's liability under this Section. If Licensor elects (a) above, Licensor
shall have the right to control the defense and settlement, at the expense of
Licensor, of any such claim and Licensee shall cooperate with Licensor in such
defense and settlement. If Licensor elects (c) above, Licensee shall return to
Licensor the claimed infringing Software, along with any copies, duplicates and
other manifestations thereof in whatever form. If Licensor is unable to provide
the remedies provided for in (a), (b) or (c) or the remedy results in a System
or Custom Software Module which does not serve substantially the same purpose
and function or materially affects the performance of the System or Custom
Software Module, Licensee, at its option, shall have the right to return the
System for a full refund of the Fee for the System or the Service Hours or the
amount paid as outlined in Section 4.1(c) for the Custom Software Module.
Notwithstanding the foregoing, the limitation under 7.3 (i) above shall apply
only to the Licensee's use of any Custom Software Module, and shall not apply to
Licensor's use of such Custom Software Module for the benefit of any third party
licensee of the System.
7.4 NOTICE. If Licensee believes that Licensor has breached the warranty set
forth in this Agreement or that Licensee is entitled to indemnification pursuant
to Section 7.3 hereof, Licensee shall notify Licensor in writing within ten (10)
business days of the time Licensee becomes aware of such alleged breach or
entitlement to indemnification. Any such notice which is given in connection
with this Section 7.4 shall, to the extent known to Licensee, state specifically
with respect to the System or any Custom Software Module (or Proprietary
Component thereof) the Specifications to which the affected System or Custom
Software Module (or Proprietary Component thereof) fails to conform and the
manner in which the System or Custom Software Module fails (or Proprietary
Component thereof) to conform to such Specifications with sufficient specificity
to permit Licensor to correct such nonconformity and any such notice given in
connection with Section 7.3 shall state with reasonable specificity the nature
of the
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claimed infringement. The failure of Licensee to notify Licensor in accordance
with this Section shall relieve Licensor of its obligations under Sections 7.1
and 7.3.
VIII. TERM; BREACH; TERMINATION
-------------------------
8.1 TERM. The License shall commence as of the Commencement Date and shall
terminate upon the fourth (4th) anniversary of the Commencement Date occurs;
provided, however, that (i) Licensee may terminate this Agreement at any time
beginning six (6) months after the Commencement Date upon not less than thirty
(30) days written notice to Licensor (which may be given as early as five (5)
months after the Commencement Date), and (ii) so long as Licensee is not in
material breach of any of the terms hereof, Licensee may renew this Agreement
for successive 1 year terms by sending written notice of Licensee's desire to
renew within 30 days before the end of each then-current term in the form
attached as EXHIBIT F. All such renewals shall be subject to the Fees then in
effect for each License Type, such Fee subject to the provisions of Section
10.12 (a) of this Agreement.
8.2 BREACH. Upon the happening of any of the following events there shall be
deemed to be a material breach of the terms of this Agreement by Licensee, and
without intending to waive, remove, limit, or restrict any legal or equitable
right or remedy otherwise available to Licensor attendant upon such material
breach, Licensor shall have the right to cease performance hereunder until such
breach is remedied or to terminate this Agreement: (a) Licensee fails to make
any payment when due as required by this Agreement for a period of 30 days
following its receipt from Licensor of a written notice specifying such
violation or failure and demanding that it be cured; (b) Licensee violates or
fails to perform any of the other material covenants or agreements contained in
this Agreement for a period of 30 days following its receipt from Licensor of a
written notice specifying such violation or failure and demanding that it be
cured (if such violation or failure is capable of being cured); or (c) Licensee
ceases doing business as a going concern; makes an assignment for the benefit of
creditors; admits in writing its inability to pay its debts as they become due;
files a voluntary petition in bankruptcy; is adjudicated an insolvent; files a
petition seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar arrangement under any present or future
statute, law or regulation, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding; consents to
or acquiesces in the appointment of a trustee, receiver or liquidator of it or
all or any substantial part of its assets or properties, or takes any action
with a view to its dissolution or liquidation; or if within 60 days after the
commencement of any proceedings against it seeking reorganization, arrangement,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceedings shall not have been
dismissed; or if within 60 days after the appointment without Licensee's consent
or acquiescence of any trustee, receiver or liquidator of Licensee of all or any
part of its assets or properties, such appointment shall not be vacated.
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8.3 TERMINATION.
(a) EFFECT. Upon the termination of this Agreement, whether by
expiration of its term, default, or other cause specified in this Agreement, or
upon the valid cancellation of the License, Licensee shall, except as provided
under Subsection (b): (i) immediately discontinue exercising any rights granted
hereunder relating to the System or any Custom Software Module which has been
used outside of the System, pursuant to Section 2.4 (a) of this Agreement, (ii)
promptly return to Licensor all components of the System (including any Custom
Software Module which has been used outside of the System, pursuant to the terms
of Section 2.4 (b) of this Agreement) by an appropriate means of delivery and
insured against loss for the full replacement cost thereof, all at the expense
of Licensee, and (iii) certify in writing under oath that, to the best of its
knowledge, all materials required to be delivered to Licensor hereunder have
been delivered to Licensor and that it has violated none of the material
provisions of Section 2.2 or 2.3 hereof. The expiration or termination of this
Agreement shall be without prejudice to any rights of Licensor against Licensee
and such expiration or termination shall not relieve Licensee of any of its
obligations to Licensor existing at the time of expiration or termination.
(b) CUSTOM SOFTWARE MODULES: LICENSE. In the event Licensee has
obtained permission from Licensor to use any Custom Software Module outside of
the System, as provided in Section 2.4 (b) of this Agreement, Licensee shall
have the right to obtain a fully-paid, perpetual right and license to continue
to use such Custom Software Module for such purposes, provided that termination
of this Agreement is not for breach of this Agreement by Licensee. If Licensee
chooses to obtain such perpetual license, Licensee shall notify Licensor in
writing, within thirty (30) days of the termination date of this Agreement. Upon
payment of a consideration fee, equal to the number of Service Hours originally
charged for the development of such Custom Software Module, multiplied by
[******], Licensor shall grant such perpetual license to Licensee.
Notwithstanding anything to the contrary above, Licensee shall in no event be
obligated to pay any consideration fee for any portion of such Custom Software
Module that is designated a Proprietary Component of such Custom Software
Module. Such license shall be subject to the other restrictions contained in
Section 2.4 (b) of this Agreement, and all other provisions of this Agreement
designated in Section 10.17 as surviving termination.
8.4 SOURCE CODE ESCROW. Licensor agrees to make Licensee a beneficiary under the
Licensor's Source Code Escrow Agreement attached hereto as EXHIBIT K . which
shall provide Licensee with access to the source code for supporting and
maintaining the Licensed Software in the event Licensee ceases to continue its
business in support thereof.
IX. PAYMENT, CHARGES AND SUPPORT
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CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
26
9.1 LICENSE FEE.
(a) LICENSE FEE. Licensee shall pay to Licensor a Fee per Calendar
Quarter of [******], plus any upgrade costs as set forth in Exhibit C, with the
first payment to be made fifteen (15) days after acceptance of the First Systems
by Licensee pursuant to Section 5.1, above. Each subsequent payment shall be
made no later than fifteen (15) days after the beginning of the Calendar Quarter
for which payment is due. For any partial Calendar Quarter, Licensee shall pay
Licensor the Fee prorated on a daily basis, and any applicable Service Hours as
set forth in EXHIBIT I shall be similarly prorated. As specified in Section 3.1
(d), Licensee may hold the Fee for the first Calendar Quarter of 1999 and any
subsequent Calendar Quarter(s), until such time as the obligations under Section
3.1(d) are completed by Licensor. In the event such Fee(s) are held, such Fee(s)
shall be due and payable no later than ten (10) days after the obligations under
Section 3.1(d) are completed by Licensor.
(b ) REQUIREMENT TO PAY FEE. The Fees are in consideration of the
agreement of Licensor to grant the License and provide Services hereunder in
accordance with the License Type selected and shall be so payable regardless of
whether Licensee refuses or is unable to accept the full performance of Licensor
hereunder or whether Licensor's performance hereunder is delayed for reasons not
within the control of Licensor.
9.2 EXPENSES. If Licensee has exhausted its available Service Hours for any
applicable Calendar Quarter, Licensee shall pay to Licensor upon Licensor's
request all reasonable out-of-pocket expenses incurred by Licensor in performing
Services for Licensee under this Agreement including, without limitation,
expenses incurred for travel, meals, lodging, long distance telephone calls,
document reproduction, postage, and cost of storage media such as disks and
tapes.
9.3 TAXES. Licensee shall pay when due, and only when due, any sales, use,
excise, property or other federal, state, local or foreign taxes, duties,
tariffs or other assessments (other than any tax based solely on the net income
of Licensor) and related interest and penalties that Licensor is at any time
obligated to pay or collect in connection with or arising out of the
transactions contemplated by this Agreement. Licensee agrees to indemnify and
hold harmless Licensor from any and all of such duly paid taxes, duties, tariffs
or other assessments. If Licensor pays any such amounts which Licensee is
obligated to pay under this Section 9.3, Licensee shall promptly reimburse
Licensor in an amount equal to the amount so paid by Licensor.
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CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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X. MISCELLANEOUS
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10.1 EMPLOYEES. During the term of this Agreement and for a period of one (1)
year thereafter, neither Party shall solicit any employee of the other Party who
was directly involved with performance of this Agreement; it being understood
that this provision shall not prohibit either Party from hiring employees of the
other Party who have applied for positions on their own without solicitation by
the hiring Party.
10.2 FORCE MAJEURE. If the performance of Licensor or Licensee hereunder is
delayed or prevented at any time due to circumstances beyond the control of
Licensor or Licensee, including without limitation those resulting from labor
disputes, fire, floods, riots, civil disturbances, weather conditions, control
exercised by a governmental entity, unavoidable casualties or acts of God or a
public enemy, the performance of Licensor or Licensee shall be excused until
such condition no longer exists; provided that the non-performing Party uses
commercially reasonable and diligent efforts to eliminate the force majeure
event.
10.3 GOVERNING LAW. This Agreement shall be governed by and construed under and
pursuant to the laws of the State of Ohio, without regard to my such laws
relating to choice or conflict of laws.
10.4 INTEGRATION. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and shall supersede all
contemporaneous or previous proposals, both oral and written, brochures, sales
materials, negotiations, representations, commitments, writings, agreements, and
all other communications between the parties. It may not be released,
discharged, changed or modified other than in accordance with its terms except
by an instrument in writing signed by a duly authorized representative of each
of the parties.
10.5 HEADINGS. The headings and captions used in this Agreement are intended and
shall for all Purposes be deemed to be for convenience only and shall have no
force or effect whatsoever in the interpretation of this Agreement.
10.6 ASSIGNMENT. Except as otherwise provided hereto, neither Licensor nor
Licensee shall sell, convey, sublicense, assign or otherwise transfer any of the
Software, any component thereof or any right therein, this Agreement, or any of
its rights or obligations under this Agreement, to any other Party, either
voluntarily or involuntarily, directly or indirectly, whether by operation of
law or otherwise without the prior written consent of the other Party.
Notwithstanding the foregoing, any merger, consolidation, sale of a controlling
interest or combination of interests resulting in a change in control of either
Party shall not require the consent of the other Party in the event of an
assignment to a successor in interest in connection therewith; provided that the
successor in interest agrees to be bound to all of the terms and conditions of
this Agreement. Any assignment in violation of the terms hereof shall be void
and of no force or effect.
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10.7 COUNTERPARTS CLAUSE. This Agreement may be executed in two or more
counterparts each of which shall be deemed originals for all purposes.
10.8 SEVERABILITY. If any term, clause or provision of this Agreement shall be
judged invalid for any reason whatsoever, such invalidity shall not affect the
validity or operation of any other term, clause or provision and such invalid
term, clause or provision shall be deemed to have been deleted from this
Agreement.
10.9 NOTICES. All notices, requests, demands and other communications required
or permitted under this Agreement shall be deemed to have been duly given and
made if in writing and served either by personal delivery to the Party for whom
it is intended, sent by telecopy or electronic mail if followed by hard copy the
next day, or by being deposited postage prepaid, certified or registered mail,
return receipt requested (or such form of mail as may be substituted therefor by
postal authorities), in the United States mail, bearing the address shown in
this Agreement for, or such other address as may be designated in writing
hereafter by such Party:
If to Licensor: NETGENICS, Inc.
1717 East Ninth Street
Cleveland, Ohio 44114
(216) 861-4007
Telecopy No. (216) 861-4777
Attention: Manuel J. Glynias, President
With a copy to: Baker & Hostetler LLP
3200 National City Center 1900 East
9th Street Cleveland, OH 44114-3485
(216) 621-0200
Telecopy No.: (216) 621-0740
Attention: Jerry Grisko, Esq.
If to LICENSEE: American Home Products, Inc
c/o Genetics Institute, Inc.
87 CambridgePark Drive
Cambridge, MA 02140
(617) 498-8455
Telecopy No.: (617) 876-5851
Attention: Bruce Leicher, Vice President-Law
10.10 SYSTEM COMMITTEE; DISPUTES. As soon as reasonably practicable after the
Commencement Date, the Parties shall form a committee comprised of two (2) to
three (3) representatives (as designated by the Steering Committee, as defined
below) from
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each Party (the "System Committee"). The System Committee shall meet no less
often than on a quarterly basis and shall be charged with the following duties:
(a) overseeing roll-out process of the Systems, (b) overseeing Hardware upgrades
and replacements, (c) formulating, discussing and agreeing to Custom Software
Module requests, including the number of Service Hours to be used in designing
and delivering a Custom Software Module and whether any Proprietary Component of
a Custom Software Module or Licensee Confidential Information exists in a Custom
Software Module and issues relating to the acceptance of Custom Software Modules
and (d) except as otherwise provided in Section 4.1, resolving any and all
disputes between the Parties arising out of or in connection with this
Agreement. If the System Committee cannot resolve a dispute arising out of or in
connection with this Agreement, then such dispute shall be referred to their
respective officers designated below or their successors (such officers, along
with any duly-appointed additional members, comprising the "Steering
Committee"), for attempted resolution by good faith negotiations within thirty
(30) days after such notice is received:
For NetGenics: President
For Licensee: Senior Vice President - Discovery Research
Except for disputes arising under Section 4.1 of this Agreement, which are to be
resolved as provided therein, all such disputes which are not so resolved
between the Parties or the designated officers within such thirty day period
shall, be subject to litigation in a court with proper jurisdiction over the
parties.
10.11 CONFLICT. Each Party (the "Representing Party") represents and warrants to
the other Party that neither the execution nor delivery of this Agreement by the
other Party will conflict with or result in the breach of any material terms,
conditions or provisions of any agreement, contract or instrument to which the
Representing Party is a party or will result in the creation or imposition upon
or against the Representing Party of any claim, charge, encumbrance or
restriction of any nature whatsoever.
10.12 MOST FAVORED LICENSEE.
(a) If during the term of this Agreement Licensor reduces its published
list prices then Licensor shall notify Licensee of such price reductions as they
become effective and Licensor shall extend any reduced price to Licensee.
(b) Licensor shall, upon written request from Licensee (which request
shall be made no more than one (1) time per Calendar Quarter), provide to
Licensee terms (redacted to protect confidentiality of other licensees) of its
SYNERGY license agreements comprising (i) the number of Designated Locations and
License Type for each Designated Location, (ii) the number of Service Hours to
be provided, (iii) the Term of the agreement and (iv) the Fee. In the event that
Licensor extends to other licensees terms that are materially more favorable
than those extended to Licensee herein, Licensee
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shall have the right to amend this Agreement to incorporate the terms of the
more favorable Agreement. Licensee shall have the right to request that an
independent auditor be employed, at the wrongful Party's expense, to certify
complete disclosure by Licensor pursuant to this Section 10.12 (b).
(c) In the event that Licensee elects to exercise its rights under
Section 10.12 (b) of this Agreement, Licensee shall also be subject all other
material terms, as limited to and outlined in that Section 10.12 (b), that may
be less favorable than the terms of this Agreement. Any such election shall
remain in force for the remaining Term of this Agreement.
10.13 WAIVER. The failure of either Party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the validity of either Party to enforce each and every such provision
thereafter. The express waiver by either Party of any provision, condition or
requirement of this Agreement shall not constitute a waiver of any future
obligation to comply with such provision, condition or requirement.
10.14 REMEDIES. All rights and remedies conferred upon a Party under this
Agreement or by any other instrument or law shall be cumulative and may be
exercised singularly or concurrently.
10.15 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of Licensor and Licensee and their respective successors and permitted
assigns.
10.16 RISK OF LOSS. Licensee assumes all risks of and shall be liable to
Licensor for loss or damage to the System while on the premises of or otherwise
in the possession or control of Licensee.
10.17 SURVIVAL. Notwithstanding the termination of this Agreement, by expiration
or otherwise, the following provisions shall survive such termination: 2.2, 2.3,
2.4, 7.1 through 7.4, inclusive, 8.2, 8.3, 10.1, 10.3, 10.4, 10.6, 10.8 through
10.19 and 10.22.
10.18 INJUNCTIVE RELIEF. Each Party acknowledges that because of the
confidential and proprietary nature of the System, the Licensee Software, the
Proprietary Components of Custom Software Modules, the Licensee Confidential
Information and the Licensor Confidential information, neither termination of
this Agreement nor an action at law would be an adequate remedy for a breach by
either Party of this Agreement. Accordingly, each Party agrees and consents that
in the event of such breach, in addition to all other remedies which such Party
may have, such Party shall be entitled to relief in equity, including a
temporary restraining order, temporary or preliminary injunction, and permanent
mandatory or prohibitory injunction to restrain the continuation of any such
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breach or to compel compliance with the provisions of said sections without the
necessity of proof of actual damage.
10.19 INDEMNIFICATION. Except as provided in Sections 7.1 through 7.3 hereof and
below, Licensee shall indemnify and hold harmless Licensor, its agents,
employees, successors and assigns from and against any and all liabilities,
losses, damages, claims, suits and expenses, including, without limitation,
reasonable attorney's fees, of whatsoever kind and nature imposed on, incurred
by, or asserted against Licensor, its agents, employees, officers, directors,
stockholders, successors and assigns relating to or arising out of the
possession or use of the System by Licensee or any failure on the part of
Licensee to perform or comply with the terms and conditions of this Agreement.
Notwithstanding the foregoing, such indemnification shall not apply to any
claims for infringement or misappropriations of any patent or other intellectual
property rights by a third Party which arise of the marketing, development,
manufacture, delivery and license of the System by Licensor to customers such as
Licensee.
10.20 EXHIBITS AND SCHEDULES. Each reference in this Agreement to a Schedule or
Exhibit shall mean a Schedule or Exhibit attached to this Agreement and
incorporated into this Agreement by such reference.
10.21 PRESS RELEASES AND REFERENCES. Upon execution of this Agreement, Licensor
and Licensee agree to discuss in good faith the preparation of a joint press
release stating that the parties have entered into a software license and
service agreement; provided, however, that neither Party may disclose the terms
of this Agreement or the substance of any discussions between Licensor and
Licensee without the prior written consent of the other Party. Upon acceptance
of the System or Custom Software Module thereof by Licensee and satisfactory
performance of the same, as the case may be and as defined in Section 5.1(a) or
4.2(b), Licensee agrees, upon request of Licensor, to act as a reference for the
System and the Licensor. Such duties may include responding to (i) requests for
references by other potential Licensees of the System and (ii) interview
requests by Licensor, the press, business analysts or other parties with an
interest in the System. All responses shall be subject to the prior written
approval of Licensee, and such requests shall be reasonably considered and not
unreasonably denied.
10.22 CONFIDENTIAL INFORMATION. Licensor understands and agrees that Licensee
has developed and will develop scientific, technical, trade and/or business
information which is treated by Licensee as confidential, including, without
limitation, algorithms, gene expression information, genetic sequence data,
formulations, techniques, tests, data, know-how, Proprietary Components of
Custom Software Modules, and inventions, whether patentable or not ("Licensee
Confidential Information"). Licensee understands and agrees that Licensor has
developed and will develop scientific, technical, trade and/or business
information which is treated by Licensor as confidential, including, without
limitation, the System and all source and object code, test plans and data
related to the
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System, customer and price lists, know-how, inventions, whether patentable or
not, and the terms of this Agreement. ("Licensor Confidential Information")
(a) Licensor agrees that Licensee is the sole owner of Licensee Confidential
Information. Licensor agrees to hold all Licensee Confidential Information in
confidence, to use it solely for the purposes authorized in this Agreement, and
to not disclose such Licensee Confidential Information to any third party,
except as required by order of a court of law or appropriate government agency.
All Proprietary Components of Custom Software Modules (as enumerated on Exhibit
D in accordance with Section 3.2 (e) herein), and Licensee Software, including
without limitation, Licensee-derived genetic sequence data, gene expression
information, formulations, novel proteins and protein utility data, shall in any
event be deemed to be Licensee Confidential Information. All other Licensee
Confidential Information, including Pharmaceutical Know-How, shall be marked
"confidential" and disclosed to Licensor in writing or, if disclosed orally or
visually to Licensor, reduced to writing and delivered to Licensor marked
"confidential".
(b) Licensee agrees that Licensor is the sole owner of Licensor Confidential
Information. Licensee agrees to hold all Licensor Confidential Information in
confidence, to use it solely for the purposes authorized under this Agreement
and not to disclose such Licensor Confidential Information to any third party,
except as required by order of a court of law or appropriate government agency.
The System and all source and object code test, plans and data related to the
System, and customer and price lists shall in any event be deemed to constitute
Licensor Confidential Information. All other Licensor Confidential Information
shall be marked "confidential" and disclosed to Licensee in writing or, if
disclosed orally or visually to Licensor, reduced to writing and delivered to
Licensee marked "confidential"; provided that Licensee may disclose Licensor
Confidential Information to third parties of Licensee who meet the
qualifications of a "User" as defined in Section 1.23 hereunder and who have
agreed to be bound by the terms of this Agreement.
Notwithstanding anything to the contrary contained in Sections 10.22 (a) or (b),
neither Licensee Confidential Information nor Licensor Confidential Information
shall include any information: (a) was in the public domain prior to the time of
disclosure to the receiving Party; (b) which, after disclosure, becomes part of
the public domain through publication or otherwise except by breach of this
obligation; (c) which was in the possession of the receiving Party prior to
disclosure by the disclosing Party; (d) which the receiving Party receives from
an independent third party which has the right to disclose it to the receiving
Party. The obligations of this Section 10.22 shall extend beyond any termination
of this Agreement for a period of five (5) years.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
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LICENSOR: LICENSEE:
NETGENICS, INC. AMERICAN HOME PRODUCTS CORPORATION
By:_/s/ Manuel J. Glynias By: /s/ Glenn Larsen
----------------------- -----------------
Name: Manuel J. Glynias Name: Glenn Larsen, Ph.D.
Title: President and C.E.O. Title: Senior Vice President,
Discovery Research