*** Text Omitted and Filed separately Confidential Treatement Requested Under
17 C.F.R. Sections 200.80(b)(4), 200.83 and 240.24b-2
EXHIBIT 10.33
GENOMIC DATABASE COLLABORATION AND LICENSE AGREEMENT
THIS GENOMIC DATABASE COLLABORATION AND LICENSE AGREEMENT ("Agreement")
is made as of December 31, 1997, by and between GENE LOGIC INC., a Delaware
corporation ("Gene Logic"), located at 10150 Old Columbia Road, Columbia,
Maryland 21046 and N.V. ORGANON ("Organon"), a corporation organized under
the laws of The Netherlands, located at Kloosterstraat 6, 5349 AB, Oss, The
Netherlands.
WITNESSETH:
WHEREAS, Gene Logic has developed technologies and know-how with respect
to high throughput analysis of gene expression and gene regulation for use in
the identification of drug targets and the discovery of pharmaceutical
products;
WHEREAS, Organon is a company engaged in the development and
commercialization of pharmaceutical products;
WHEREAS, Organon and Gene Logic wish to enter into a collaborative
effort directed toward the development of a Research Database (as defined
herein) that will contain all of the data derived from tissue samples
delivered by Organon to Gene Logic for the identification of genes which
might encode potential drug targets; and
WHEREAS, through the Research Program (as defined herein), Organon
intends to discover new drug targets for the development and
commercialization of pharmaceutical products.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained herein, Gene Logic and Organon
agree as follows:
1. DEFINITIONS.
The following capitalized terms shall have the meanings indicated for
purposes of this Agreement:
1.1 "AFFILIATE" shall mean any corporation, association or other entity
which directly or indirectly controls, is controlled by or is under common
control with the party in question. As used in this definition of "Affiliate,"
the term "control" shall mean direct or indirect beneficial ownership of more
than 50% of the voting or income interest in such corporation or other business
entity.
1.2 "AGREEMENT DATE" shall mean the date of this Agreement first written
above.
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1.3 "AGREEMENT TERM" shall mean the period from the Agreement Date
until, with respect to each Product, the expiration of the last royalty
obligation owed by Organon to Gene Logic with respect to such Product, or until
this Agreement is otherwise terminated pursuant to its terms.
1.4 "ALLIANCE DIRECTOR" shall have the meaning set forth in Section 3.3.
1.5 "BASE INFORMATION" shall mean all sequence information pertaining to
cDNAs, partial cDNAs and their corresponding full length cDNAs and proteins
resulting from work performed under the Research Program.
1.6 "CDNA" shall mean a DNA copy of a mRNA, including, without
limitation, all cDNA clones and cDNA templates derived from a given gene
transcript and its corresponding coding sequence, including the full length
sequence.
1.7 "CONTROL" shall mean possession of the ability to grant the licenses
or sublicenses or to make the assignments as provided for herein without
violating the terms of any agreement or other arrangement with any Third Party.
1.8 "DIAGNOSTIC PRODUCT" shall mean any product or service or
combination thereof used for the diagnosis, prognosis and/or monitoring of
progression of any disease or disorder which is developed utilizing, or is
comprised of, any Gene Target or which incorporates any Gene Target DNA or RNA
sequence.
1.9 "EFFECTIVE DATE" shall mean the date that Samples are first
delivered to Gene Logic by Organon, which date is expected to be on or before
April 1, 1998 but shall in any event be no later than July 1, 1998.
1.10 "FDA" shall mean the United States Food and Drug Administration.
1.11 "FIELD OF USE" shall mean all internal research uses by Organon of
Gene Targets and the development and commercialization of those Therapeutic
Products described in Section 1.35(a). All uses of Gene Targets as Protein
Products, Nucleic Acid Products or Diagnostic Products are excluded from the
Field of Use.
1.12 "FURTHER DEVELOPMENT" shall have the meaning set forth in Section
2.6.
1.13 "GENE EXPRESS-TM- NORMAL DATABASE" shall mean Gene Logic's GENE
EXPRESS-TM- NORMAL database (it being the intent of the parties that such term
shall include any successor database created by Gene Logic with content
substantially equivalent to that of the GENE EXPRESS-TM- NORMAL database).
1.14 "GENE LOGIC SOFTWARE" shall mean Gene Logic's software programs for
the analysis of gene expression and gene regulation and the identification and
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prioritization of genes as drug targets that are Controlled by Gene Logic as of
the Agreement Date or during the Research Term.
1.15 "GENE LOGIC TECHNOLOGY" shall mean (a) all discoveries, inventions,
information, data, know-how, trade secrets and materials (whether or not
patentable) that are Controlled by Gene Logic as of the Agreement Date or during
the Research Term and that pertain to (i) Gene Logic's READS-TM- and MuST-TM-
technologies, (ii) the Gene Logic Software and (iii) the database architecture
and design of, and the analytical tools within, the Research Database and the
GENE EXPRESS-TM- NORMAL Database, and (b) all Patent Rights or other
intellectual property rights of Gene Logic covering the foregoing.
1.16 "GENE PRODUCTS" shall mean all partial cDNAs, DNAs, genes, full
length cDNAs corresponding thereto and proteins encoded therefrom.
1.17 "GENE TARGET" shall have the meaning set forth in Section 2.6.
1.18 "GENE TARGET KNOW-HOW" shall mean all discoveries, inventions,
information, data, know-how, trade secrets and materials for the manufacture,
use or sale of a Gene Target, which are Controlled by Gene Logic during the
Agreement Term, but excluding Gene Logic's Patent Rights.
1.19 "INVENTION(s)" shall have the meaning set forth in Section 4.1.
1.20 "NET SALES" shall mean the gross invoices delivered by Organon or
its Affiliates or sublicensees, or by Gene Logic or its Affiliates or
sublicensees, as appropriate, for the sale of a Product, less the following
deductions:
(1) Prompt payment or other trade or quantity discounts actually
allowed and taken in such amounts as are customary in the trade;
(2) Amounts repaid or credited by reason of timely rejections or
returns;
(3) Taxes on the sale of a Product (other than franchise or income
taxes on the income of the seller) actually paid or withheld;
(4) Allowances for bad debt to the extent such amounts were
previously invoiced and included in Net Sales for royalty purposes and were
subsequently actually written off by such party (Organon or its Affiliate or
sublicensee, or Gene Logic or its Affiliate or sublicensee, as appropriate); and
(5) Transportation and delivery charges, including insurance
premiums, actually incurred.
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Notwithstanding the foregoing, amounts received by such party (Organon or
its Affiliate or sublicensee, or Gene Logic or its Affiliate or sublicensee, as
appropriate) for the sale of Products among such party and its Affiliates
whether for their internal use or for resale or other disposition will not be
included in the computation of Net Sales hereunder.
1.21 "NUCLEIC ACID PRODUCT" shall mean any gene therapy product or
antisense product, in any dosage form or formulation by any route of
administration, for the prevention or treatment of any disease or disorder which
is or comprises any full, partial or modified RNA or DNA sequence corresponding
to or complementary to a Gene Target RNA or DNA sequence.
1.22 "PATENT RIGHT(s)" shall mean, with respect to Gene Logic or Organon,
all United States and foreign patents (including all reissues, extensions,
confirmations, registrations, re-examinations, and inventor's certificates) and
patent applications (including, without limitation, all substitutions,
continuations, continuations-in-part and divisionals thereof) necessary for the
purposes of this Agreement Controlled by Gene Logic or Organon at any time
during the Agreement Term.
1.23 "PRODUCT" shall mean a Therapeutic Product or Protein Product, as
applicable.
1.24 "PROTEIN PRODUCT" shall mean any product for the prevention or
treatment of any disease or disorder, in any dosage form or formulation for
delivery by any route of administration, which is or comprises a protein or
peptide encoded by the full, partial or mutated RNA or DNA sequence
corresponding to a Gene Target RNA or DNA sequence (but excluding any such
protein or peptide that has been substantially modified), including any
therapeutic antibody.
1.25 "PROTEIN PRODUCT FIELD OF USE" shall mean all uses of Gene Targets
for the development and commercialization of Gene Targets as Protein Products or
as those Therapeutic Products described in Section 1.35(b). All uses of Gene
Targets as Nucleic Acid Products or Diagnostic Products are excluded from the
Protein Product Field of Use.
1.26 "REGULATORY APPROVAL" shall mean (i) approval of an NDA or
comparable applicable filing by the FDA permitting commercial sale of a Product
and (ii) any comparable approval permitting commercial sale of a Product granted
by applicable authorities in any country or jurisdiction other than the United
States.
1.27 "RESEARCH DATABASE" shall mean the database created by Gene Logic
using the Gene Logic Technology pursuant to the Research Plan and containing all
of the data derived from experiments conducted with respect to Samples.
1.28 "RESEARCH PLAN" shall have the meaning set forth in Section 2.1.
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1.29 "RESEARCH PROGRAM" shall mean that program of research performed by
the parties pursuant to Section 2 for the research, discovery and
characterization of genes through the application of bioinformatics and genomic
technologies to analyze Samples, and the use of such genes for the development
and commercialization of Products. As used herein, the term "genomic
technologies" shall mean, without limitation, technologies for the analysis of
gene expression and gene regulation, hybridization array techniques, high speed
sequencing and generation of expressed sequence tags.
1.30 "RESEARCH TERM" shall mean the period commencing on the Effective
Date and ending upon the third anniversary of the Effective Date, subject to
extension or earlier termination as set forth herein.
1.31 "RMC" shall have the meaning set forth in Section 3.1.
1.32 "SAMPLES" shall mean human or animal tissue samples or cell lines
supplied by Organon to Gene Logic for analyses pursuant to the Research Plan.
1.33 "SCIENTIFIC FTE" shall mean the equivalent of a full-time
researcher's or program manager's work time over a 12 month period (including
normal vacations, sick days and holidays).
1.34 "SYNTHESIS AND TESTING" shall mean a project approved by the Organon
Research Committee based on a Gene Target (a) aiming at optimisation of a lead
compound or lead compounds to develop a Therapeutic Product described in Section
1.35(a) or (b) aiming at development of a Protein Product or a Therapeutic
Product described in Section 1.35(b).
1.35 "THERAPEUTIC PRODUCT" shall mean any product for the prevention or
treatment of any disease or disorder, in any dosage form or formulation by any
route of administration, which product is or comprises (a) a molecule, compound
or other agent, regardless of its function or utility, which is discovered or
whose utility is discovered utilizing, in whole or in part, a Gene Target,
whether or not in the course of the Research Program, or (b) a protein or
peptide encoded by the full, partial or mutated RNA or DNA sequence
corresponding to a Gene Target RNA or DNA sequence, which protein or peptide has
been substantially modified, and in each case excluding any Nucleic Acid
Product, Diagnostic Product or Protein Product.
1.36 "THIRD PARTY" shall mean any party other than Organon or Gene Logic
or an Affiliate of either of them.
2. RESEARCH PROGRAM.
2.1 UNDERTAKING AND SCOPE. During the 45 days after the Agreement Date,
Organon will work to develop a plan for the creation and use of the Research
Database,
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with input as appropriate from Gene Logic. The RMC will review and, in its
discretion, approve or modify the general direction of such plan. Such plan, as
approved by the RMC for any year of the Research Program, is referred to herein
as the "Research Plan." At least 90 days before each anniversary of the
Effective Date during the Research Term, Organon will propose to the RMC a
Research Plan providing for such additional quantities and types of Samples to
be analyzed and included in the Research Database during the following year of
the Research Program, with input as appropriate from Gene Logic, and the RMC
shall review, modify if appropriate, and approve such Research Plan by such
anniversary. At any time, the RMC may modify or amend any such Research Plan as
appropriate or necessary to reflect the parties' experiences in performing the
Research Program. Each party agrees to use all reasonable efforts to perform
the activities detailed in the Research Plan in a professional and timely
manner. The parties agree that the Research Program will not include any
research, discovery or development activities primarily directed toward the
discovery and characterization of genes associated with the indications listed
on Schedule 2.1 and that the collaboration between the parties contemplated by
this Agreement will not cover the indications listed on Schedule 2.1.
2.2 PERSONNEL AND RESOURCES. Each party agrees to commit the personnel,
facilities, technology and other resources necessary to perform its obligations
under the Research Plan; PROVIDED, HOWEVER, that neither party warrants that the
Research Program shall achieve any of the research objectives contemplated by
them. During the Research Term, Organon and Gene Logic will each maintain the
number of Scientific FTEs, which in the case of Gene Logic shall not be fewer
than [ . . . *** . . .] Scientific FTEs, devoted to cooperative work as are
required under the Research Plan. The scientific priorities and direction of
the work of such Scientific FTEs will be determined by the RMC. Organon will
provide funding to support Gene Logic's performance of its obligations under the
Research Plan as set forth in Section 6.
2.3 INFORMATION AND REPORTS CONCERNING THE RESEARCH DATABASE. All
information, technology or inventions relating to the Samples and the analysis
of such Samples made by either party in the course of the Research Program will
be promptly disclosed to the other as necessary to enable the parties to conduct
the Research Program, with significant discoveries or advances being
communicated as soon as practicable after such information is obtained or its
significance is appreciated. The parties will exchange at least quarterly
written reports presenting a meaningful summary of their activities performed
under this Agreement during the Research Term.
2.4 SAMPLES. Organon shall supply Samples to Gene Logic in sufficient
varieties and quantities, as well as background information with respect to such
Samples and related experimental protocols, for Gene Logic to develop the
Research Database and otherwise carry out the purposes of this Agreement and the
Research Plan. Gene Logic will, and will take reasonable steps to ensure that
its employees and agents, use the
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Samples and background information in a manner that is consistent with the
terms of this Agreement and the Research Plan.
2.5 TERM OF THE RESEARCH PROGRAM. Work under the Research Program
will commence as of the Effective Date and, unless terminated earlier by
either party pursuant to the terms of this Agreement or extended by mutual
agreement of the parties, will terminate upon expiration of the Research
Term. [. . . *** . . .], any licenses granted to Gene Logic pursuant to
Section 5.7 shall remain in full force and effect.
2.6 SELECTION OF GENE TARGETS.
(a) Organon will use reasonable efforts consistent with its
obligations under the Research Plan to identify Gene Products as potential
targets for the development of pharmaceutical products. Organon shall select
certain of such Gene Products as targets for further development of
pharmaceutical products using information obtained from the Research Database or
the GENE EXPRESS-TM- NORMAL Database. Any Gene Product which is selected as a
target for further development using information obtained from the Research
Database or the GENE EXPRESS-TM- NORMAL Database (as evidenced by laboratory
notebooks kept by Organon) and which Organon uses in Further Development (as
defined below) shall be a "Gene Target."
(b) Organon agrees to keep laboratory notebooks that record whether
information obtained from the Research Database or the GENE EXPRESS-TM- NORMAL
Database has been used in the selection of Gene Products as targets for further
development and to provide an independent third party, reasonably acceptable to
both parties, with access to such laboratory notebooks upon reasonable prior
notice and during normal business hours for purposes of confirming the use of
such information. In addition, Organon agrees that, if so requested by Gene
Logic, it will enter into a third party escrow arrangement under which it will
place into escrow notice of the selection of Gene Products as targets for
further development using information obtained from the Research Database or the
GENE EXPRESS-TM- NORMAL Database.
(c) Based upon Organon's standard, internal research and
development criteria, Organon will, in its sole discretion, decide whether to
commence Further Development with regard to a particular Gene Product. Organon
shall notify Gene Logic in writing and make the payment described in Section 6.3
prior to using any Gene Target in Further Development. For purposes of this
Agreement, "Further Development" of a Gene Target as (i) a Therapeutic Product
described in Section 1.35(a) will be the [ . . . *** . . .] or (ii)
a Protein Product or a Therapeutic Product described in Section 1.35(b) will be
[ . . . *** . . .].
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(d) Notwithstanding the foregoing, Organon shall have no
obligations to make any payments for any Gene Target selected after the
[. . . *** . . .] of the end of the Research Term, and Gene Logic shall have
no obligation to convey to Organon any rights to any such Gene Target under
Section 5.3.
3. RESEARCH MANAGEMENT COMMITTEE; ALLIANCE DIRECTORS; DISPUTE RESOLUTION.
3.1 RESEARCH MANAGEMENT COMMITTEE. Promptly after the Agreement Date,
Organon and Gene Logic will each appoint two representatives to a research
management committee (the "RMC"). Attached as Schedule 3.1 is a list of
representatives the parties intend to appoint to the RMC. One of the Organon
representatives shall be identified as chairman of the RMC. The RMC will
review, direct and supervise all operational and scientific aspects related to
the creation of the Research Database. The duties of the RMC shall include
approving the Research Plan pursuant to which Organon will deliver Samples to
Gene Logic, agreeing to resource allocations necessary to process such Samples
(including the allocation of Scientific FTEs), monitoring the parties' progress
under the Research Plan and evaluating the means through which Organon has
access to the Research Database. The RMC will meet quarterly, or more
frequently if mutually agreed, and will alternate sites of meetings between Gene
Logic's offices and Organon's offices. Each party recognizes the importance of
the RMC in the success of the Research Program and will use diligent efforts to
cause all of its representatives to such committee to attend all meetings of
such committee. A party may change any of its appointments to the RMC at any
time upon giving written notice to the other party. Any disputes or
disagreements within the RMC shall be resolved pursuant to Section 3.4.
3.2 RMC MEETINGS. The RMC may meet by telephone or video conference or
in person at such times as are agreeable to the members of such committee.
Attendance at meetings shall be at the respective expense of the participating
parties. The chairman of the RMC shall assure that agendas and minutes are
prepared for each of its meetings. All actions taken and decisions made by the
RMC shall be by unanimous agreement. If personal attendance is not possible for
valid reasons, voting by proxy is permissible.
3.3 ALLIANCE DIRECTORS. Each party shall designate one of its employees
as an alliance director ("Alliance Director") for all of the activities
contemplated under this Agreement. Such Alliance Directors will be responsible
for the day-to-day coordination of the performance of the Research Program and
will serve to facilitate communication between the parties with respect thereto.
3.4 DISPUTE RESOLUTION. Disputes or disagreements between the
parties arising hereunder will be referred to the RMC during the Research
Term. The representatives of Organon on the RMC shall have the right to
resolve any dispute or
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disagreement between the parties with respect to the Research Plan. If the
RMC is unable to resolve, after 30 days, a dispute or disagreement regarding
any issue presented to it or arising in it other than a dispute or
disagreement with respect to the Research Plan, or if the dispute or
disagreement arises after the Research Term, such dispute will be referred to
the Chief Executive Officer of Gene Logic and the Director of Research and
Development of Organon for good faith resolution, for a period of 90 days.
If such dispute is not resolved by the end of such 90-day period, then such
issue shall be submitted for resolution through mediation within 30 days
after either party requests mediation, according to the terms set forth in
Section 11.
4. PATENTS, KNOW-HOW RIGHTS AND INVENTIONS.
4.1 OWNERSHIP OF INVENTIONS. Inventorship of any inventions (whether or
not patentable) that are conceived, generated or reduced to practice during the
course of the Research Program ("Inventions") shall be determined in accordance
with United States laws of inventorship. Ownership of Inventions shall be
determined in the manner described in this Section 4 and, if not provided for
herein, shall be determined in accordance with inventorship.
4.2 OWNERSHIP OF GENE LOGIC TECHNOLOGY AND GENE LOGIC SOFTWARE. Subject
to the grant of intellectual property rights to Organon under the non-exclusive
or exclusive licenses granted under Section 5, Gene Logic shall own all rights
to the Gene Logic Technology and the Gene Logic Software. The filing,
prosecution and maintenance of Patent Rights, copyrights and other proprietary
rights directed at the protection of all rights to the Gene Logic Technology and
the Gene Logic Software shall be the responsibility of, and at the discretion
of, Gene Logic.
4.3 OWNERSHIP OF IMPROVEMENTS TO GENE LOGIC TECHNOLOGY AND GENE LOGIC
SOFTWARE. Gene Logic Technology and Gene Logic Software shall also include any
enhancements or improvements to the Gene Logic Technology and Gene Logic
Software discovered by either party during the course of the Collaboration.
Organon hereby irrevocably assigns to Gene Logic all right, title and interest
in and to enhancements or improvements to such Gene Logic Technology and Gene
Logic Software discovered by Organon. If Organon has any rights that cannot be
assigned to Gene Logic, Organon waives the enforcement of such rights, and if
Organon has any rights that cannot be assigned or waived, Organon hereby grants
to Gene Logic an exclusive, irrevocable, perpetual, worldwide, fully-paid
license, with right to sublicense through multiple tiers of sublicense, to such
rights. The filing, prosecution and maintenance of such assigned or licensed
Patent Rights, copyrights and other proprietary rights directed at the
protection of all rights to the enhancements or improvements to the Gene Logic
Technology and Gene Logic Software shall be the responsibility of, and at the
discretion of, Gene Logic.
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4.4 OWNERSHIP OF CERTAIN INVENTIONS.
(a) Subject to the grant of intellectual property rights to
[. . . *** . . .]. [. . . *** . . .] hereby irrevocably assigns to
[. . .*** . . .] all right, title and interest of [. . . *** . . .] in and
to the [. . . *** . . .]. If [. . . *** . . .] has any rights that cannot
be assigned to [. . . *** . . .] of such rights, and if [. . . *** . . .] has
any rights that cannot be assigned or waived, [. . . *** . . .] hereby
[. . . *** . . .]. The filing, prosecution and maintenance of Patent Rights,
copyrights and other proprietary rights directed at the protection of all
rights to such [. . . *** . . .] Inventions shall be the responsibility of,
and at the discretion of, [. . . *** . . .]. In order to minimize redundant
patent filings, [. . . *** . . .] may notify [...***...] of the subject
matter of any patent application it proposes to file with respect to an
[. . . *** . . .], and [. . . *** . . .] agrees to inform [. . . *** . . .]
of whether [. . . *** . . .] has previously filed a patent application
covering such subject matter or, subject to any obligation of
confidentiality, has been granted rights by a Third Party under a published
patent application or issued patent covering such subject matter.
(b) With respect to Patent Rights, copyrights or other
proprietary rights directed at the protection of the [. . . *** . . .] will
provide drafts of documents to be submitted to any governmental patent agency
or other authority with respect to initial filings and other filings in the
United States and Europe to [. . . *** . . .]for review and comment prior to
submission, and [. . . *** . . .]shall offer its comments promptly.
[. . . *** . . .] will take [. . . *** . . .] comments into consideration and
will use its best efforts to ensure that any filings with respect to such
Patent Rights, copyrights or other proprietary rights preserve the rights to
be granted to [. . . *** . . .] as contemplated under this Section 4.4. If
[. . . *** . . .] files a patent application or makes any other filing to
protect proprietary rights with respect to an [. . . *** . . .] Invention
pursuant to this Section 4.4 and subsequently decides to discontinue
prosecution and maintenance of such application or other filing, it will
first give [. . . *** . . .] prior notice of such decision and the
opportunity to assume prosecution and maintenance of such patent application
or other filing, at [. . . *** . . .] expense.
(c) [. . . *** . . .] hereby grants to [. . . *** . . .] (i)
to all [. . . *** . . .] claimed therein for all research uses of such
(provided that [. . . *** . . .] will not include any
additional sequence information generated by [. . . *** . . .] or its
employees, agents, consultants, Affiliates of sublicensees in any
research database other than the Research
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Database), subject to [. . . *** . . .] right to use such [. . . *** . . .]
for its [. . . *** . . .] for clarification purposes, [. . . *** . . .] means
use of the [. . . *** . . .] but does not include [. . . *** . . .], (ii) for
all uses of such [. . . *** . . .] for the discovery, development and
commercialization of [. . . *** . . .] as [. . . *** . . .], (iii) for all
uses of such [. . . *** . . .] the discovery, development and
commercialization of [. . . *** . . .] as [. . . *** . . .], and (iv) for all
uses of such [. . . *** . . .] for the discovery, development and
commercialization of [. . . *** . . .]as [. . . *** . . .]. All rights under
such Patent Rights and other proprietary rights which are not subject to the
license granted to [. . . *** . . .] under this Section 4.4(c) shall be
retained by [. . . *** . . .].
4.5 PATENT PROTECTION.
(a) RIGHTS TO FILE, PROSECUTE AND MAINTAIN PATENT RIGHTS. The
party designated as responsible for the filing, prosecution and maintenance of
Patent Rights and other proprietary rights pursuant to Section 4.2, 4.3 or 4.4,
as applicable, or the owner of the applicable Invention if not otherwise
indicated (the "Responsible Party") shall have the right, at its option and
expense, to prepare, file and prosecute any patent applications or other
appropriate filings with respect to the matters described in the respective
sections and to maintain any patents issued thereon, copyrights or other similar
rights.
(b) COOPERATION. Each party agrees to cooperate, both during
and after the term of this Agreement, with the Responsible Party in the
preparation and prosecution of all patent applications or other appropriate
filings contemplated by this Agreement and in the maintenance of any patents,
copyrights or other similar rights issued thereon; PROVIDED, HOWEVER, that,
following the Research Term, the Responsible Party shall reimburse the other
party for its out-of-pocket expenses incurred in connection with such
cooperation. Such cooperation will include the execution of all documents
necessary or desirable for the Responsible Party to fulfill its obligations
hereunder. In particular, if
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necessary, Organon agrees to provide background information in support of the
preparation and prosecution of such patent applications or other filings
regarding mRNA source (the identity of the cell or tissue and mode of
activation, if any, of the cell or tissue, from which the mRNA has been
prepared).
(c) COMMUNICATION REGARDING PATENT PROTECTION. The Responsible
Party will prepare, prosecute and maintain (and shall keep the other party
currently informed of all steps to be taken in such preparation, prosecution and
maintenance of) all Patent Rights, copyrights or other similar rights with
respect to which it is responsible and shall furnish the other party with copies
of documentation of such Patent Rights, copyrights or other similar rights and
other related correspondence relating thereto with respect to which it is
responsible to and from governmental patent agencies or other authorities.
(d) REIMBURSEMENT FOR CERTAIN PATENT EXPENSES. In the event that
Organon receives the grant pursuant to Section 5.3(b) of an exclusive license to
Patent Rights and other proprietary rights based upon data provided by a Third
Party, Organon shall reimburse Gene Logic for out-of-pocket expenses with
respect to such Patent Rights and other proprietary rights incurred by Gene
Logic during the term of such license within 30 days of receipt of an invoice
therefor; provided that, if other parties have rights under such Patent Rights
and other proprietary rights for diagnostic, gene therapy or antisense uses,
Organon shall only be required to reimburse Gene Logic for Organon's
proportional share of such out-of-pocket expenses with respect to such Patent
Rights and other proprietary rights.
4.6 INFRINGEMENT BY THIRD PARTIES. In the event Gene Logic or Organon
becomes aware of any actual or threatened infringement of any Patent Right,
copyright, trademark, trade secret or other intellectual property right of
either party which claims an Invention, that party shall promptly notify the
other party, and (i) Gene Logic shall have the right, at its option and expense,
to determine how to proceed in connection with any such actual or threatened
infringement of any Patent Right, copyright, trademark, trade secret or other
intellectual property right with respect to which Gene Logic is the Responsible
Party, and (ii) Organon shall have the right, at its option and expense, to
determine how to proceed in connection with any such actual or threatened
infringement of any Patent Right, copyright, trademark, trade secret or other
intellectual property right with respect to which Organon is the Responsible
Party. Notwithstanding the foregoing, in the event of any actual or threatened
infringement of any Patent Right, copyright, trademark, trade secret or other
intellectual property right which claims an Organon Invention, which
infringement interferes with any of the rights granted to Gene Logic under
Section 4.4(c) but does not interfere with Organon's use of such Patent Right,
copyright, trademark, trade secret or other intellectual property right, then
Gene Logic shall have the right, at its option and expense, to determine how to
proceed in connection with any such actual or threatened infringement. If
either party commences any actions
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or proceedings (legal or otherwise) pursuant to this Section 4.6, it shall
prosecute the same vigorously at its expense and shall not abandon or
compromise them or fail to exercise any rights of appeal without giving the
other party the right to take over the prosecuting party's conduct at such
other party's own expense. Neither party shall have the right to settle any
patent infringement litigation under this Section 4.6 in a manner that
diminishes the rights or interests of the other party without the consent of
such other party. Any recovery realized as a result of any patent
infringement action under this Section 4.6 shall belong to the party who
brought the action.
4.7 ALLEGATIONS OF INFRINGEMENT BY THIRD PARTIES.
(a) The parties acknowledge that, in order to exploit the rights
contained herein, Organon may require licenses under Third Party patent rights
that may be infringed by the use by Organon of the rights granted herein and it
is hereby agreed that it shall be Organon's responsibility to satisfy itself as
to the need for such licenses (other than licenses to Third Party patent rights
that are infringed by the Gene Logic Technology) and, if necessary, to obtain
such licenses.
(b) Organon shall be solely responsible for any threatened or
actual claims for Third Party patent infringement or other Third Party
intellectual property right arising out of the manufacture, use, sale or
importation of a Product sold by Organon, its Affiliates or sublicensees. Upon
receiving notice of such actual or threatened claims, Organon shall promptly
meet with Gene Logic to discuss the course of action to be taken to resolve or
defend any such infringement litigation.
5. LICENSES.
5.1 RESEARCH DATABASE AND GENE EXPRESS-TM- NORMAL DATABASE LICENSE TO
ORGANON. Subject to the terms and conditions of this Agreement and except as
provided in Section 2.1, Gene Logic hereby grants to Organon an exclusive,
worldwide license to use the Research Database, together with a non-exclusive,
worldwide license to use the GENE EXPRESS-TM- NORMAL Database, in each case
solely for its internal research purposes to identify Gene Targets during the
Research Term. Organon will have no right to sublicense to Third Parties under
such rights and shall not provide the Research Database, the GENE EXPRESS-TM-
NORMAL Database or any Gene Logic Technology or Gene Logic Software with respect
thereto, to any Third Party (other than consultants to whom disclosure is
permitted under Section 8.3) without prior written consent of Gene Logic.
Following the expiration of the Research Term, and provided Organon has paid to
Gene Logic all of the Database Access Fees set forth in Section 6.1, Gene Logic
hereby grants to Organon a perpetual, exclusive, worldwide license to use the
Research Database solely for its internal research purposes, subject only to the
obligations of Organon to make the milestone and royalty payments described in
Sections 6.3, 6.4 and 7. Notwithstanding the foregoing, Organon may provide
Gene Targets to a Third Party so long as Organon obtains Gene Logic's prior
written approval of the provision of Gene Targets to such
13
Third Party, which approval will not unreasonably be withheld, and any use of
the Gene Targets by such Third Party is subject to all of the terms and
conditions (including, without limitation, the economic terms) of this
Agreement. Organon may elect to extend the term of the foregoing
non-exclusive GENE EXPRESS-TM- NORMAL Database license following the
expiration of the Research Term upon financial terms and other conditions
mutually satisfactory to the parties by providing written notice of such
election to Gene Logic at least 90 days prior to the date upon which such
rights would otherwise expire.
5.2 LICENSE OF SAMPLES TO GENE LOGIC. Organon grants to Gene Logic a
non-exclusive, fully-paid, worldwide license to use and analyze the Samples
provided by Organon and the data and progeny derived therefrom for purposes of
the Research Program during the Research Term.
5.3 GENE TARGET LICENSE TO ORGANON. Subject to the terms and conditions
of this Agreement, with respect to each Gene Target for which Organon has paid
the fee described in Section 6.3:
(a) Gene Logic hereby grants and agrees to grant to Organon a
non-exclusive, worldwide license (without the right to sublicense) under the
Patent Rights and Gene Target Know-How Controlled by Gene Logic, if any, to
develop, make, have made, use, import, offer for sale and sell such Gene Target
in the Field of Use; and
(b) If Organon has requested rights to such Gene Target in the
Protein Product Field of Use and provided that Gene Logic has not previously
granted an exclusive license or right to such Gene Target to a Third Party in
the Protein Product Field of Use, Gene Logic hereby grants and agrees to grant
to Organon an exclusive, worldwide license (with the right to sublicense) under
the Patent Rights and Gene Target Know-How Controlled by Gene Logic, if any, to
develop, make, have made, use, import, offer for sale and sell such Gene Target
in the Protein Product Field of Use.
5.4 ORGANON RIGHT OF FIRST NEGOTIATION. With respect to each Gene
Target for which Organon has paid the fee described in Section 6.3 and Patent
Rights and other proprietary rights have been exclusively licensed to Organon
under Section 5.3, Gene Logic hereby grants to Organon an exclusive right of
first negotiation to obtain an exclusive, worldwide license (with the right to
sublicense) under the Patent Rights and Gene Target Know-How Controlled by Gene
Logic, if any, to develop, make, have made, use, import, offer for sale and sell
such Gene Target as a Nucleic Acid Product or Diagnostic Product for [ . . . ***
. . .], such license to be upon commercially reasonable terms to be negotiated
in good faith by the parties. Organon shall provide written notice to Gene
Logic (the "Exercise Notice") as to whether it would like to exercise its right
of first negotiation pursuant to this Section 5.4. If Gene Logic proposes to
develop any such Gene Target as a Nucleic Acid Product or Diagnostic Product or
to license to a Third Party rights with respect to any such Gene Target for
development or commercialization
*Confidential Treatment Requested
14
as a Nucleic Acid Product or Diagnostic Product, Gene Logic shall so notify
Organon and, if Organon does not provide an Exercise Notice with respect to
such Gene Target within [ . . . *** . . .] of such notice from Gene Logic,
then the right of first negotiation with respect to such Gene Target shall
terminate. If Organon does not exercise its right of first negotiation with
respect to a Gene Target, or if such right of first negotiation terminates
without exercise by Organon, Organon shall have no further rights under this
Section 5.4 with respect to such Gene Target, and Gene Logic shall be free to
proceed with the development, manufacture, use, import or sale of such Gene
Target as a Nucleic Acid Product and Diagnostic Product, either by itself or
through one or more Third Parties. If Organon does exercise its right of
first negotiation with respect to such Gene Target pursuant to this Section
5.4, then for a period of up to [ . . . *** . . .] following the date of the
Exercise Notice, the parties shall negotiate in good faith regarding the
terms of such license, which terms shall be commercially reasonable;
PROVIDED, HOWEVER, that if at the end of such [ . . . *** . . .] period, the
parties have not reached mutual agreement with regard to such terms as
evidenced by a written agreement, Organon shall have no further rights with
respect to such Gene Target under this Section 5.4, and Gene Logic shall be
free to proceed with the development, manufacture, use, import or sale of
such Gene Target as a Nucleic Acid Product and Diagnostic Products, either by
itself or through one or more Third Parties, upon principal financial terms
in the aggregate no more favorable to such Third Party(ies) than those
proposed to Organon.
5.5 DILIGENCE.
(a) During the Research Term, Gene Logic shall use commercially
reasonable and diligent efforts, consistent with the Research Program, to
perform analysis of the Samples using the Gene Logic Technology (including, but
not limited to, analysis of gene expression, hybridization array techniques,
gene sequencing and generation of expressed sequence tags) to develop the
Research Database. In addition, during the Research Term, Gene Logic shall use
commercially reasonable and diligent efforts, consistent with its internal
development plans, to develop the GENE EXPRESS-TM- NORMAL Database. In this
regard, Gene Logic will provide to Organon its development plans for the GENE
EXPRESS-TM- NORMAL Database on an annual basis, in conjunction with review and
approval of the Research Plan. For purposes of this Agreement, "commercially
reasonable and diligent efforts" will mean, unless the parties agree otherwise,
those efforts consistent with the exercise of prudent scientific and business
judgment, as applied to other research efforts and to products of similar
scientific and commercial potential within such party's relevant research
programs and product lines.
(b) During the Research Term, Organon shall use commercially
reasonable and diligent efforts to conduct active, ongoing research activities
utilizing the Research Database and the GENE EXPRESS-TM- NORMAL Database.
*Confidential Treatment Requested
15
(c) Without limiting the foregoing, Organon (or its Affiliates or
sublicensees) shall use commercially reasonable and diligent efforts to develop
and commercialize any Protein Products to which it has rights under this
Agreement. Gene Logic may provide [ . . . *** . . .] written notice to Organon
if in its opinion, Organon (or its Affiliates or sublicensees) is not using
commercially reasonable and diligent efforts with regard to a Protein Product,
whereupon the parties agree to hold a meeting, attended by individuals with
decision-making authority, to attempt in good faith to negotiate a resolution of
the dispute. If, within [ . . . *** . . .] after such meeting, the parties have
not succeeded in negotiating a resolution of the dispute, then such dispute
shall be submitted for resolution according to the terms set forth in
Section 11.
(d) In addition, in the event that Organon elects not to pursue the
development or commercialization of any Protein Product to which it has rights
under to this Agreement for any reason, Organon shall promptly notify Gene Logic
thereof, and, upon such notice, the exclusive license granted to Organon
pursuant to Section 5.3(b) with respect to the applicable Gene Target in the
Protein Product Field of Use on a worldwide basis will be terminated.
5.6 REPORTS. Organon hereby agrees to keep Gene Logic informed on a
reasonable basis of its efforts to select Gene Targets and to develop
Products, and to provide written reports to Gene Logic on an annual basis
(the "Reports"). The Reports shall provide, as applicable, the following
information: (i) a listing of the Gene Products which Organon has identified
as prospects for Further Development, (ii) Organon's progress toward
selection of particular Gene Products for Further Development, (iii)
Organon's plans for Further Development with regard to selected Gene Targets,
(iv) Organon's progress in screening, pre-clinical or clinical development
for Gene Targets, and (v) Organon's progress in lead optimization and
pre-clinical or clinical development of lead compounds identified through the
use of Gene Targets.
5.7 RETAINED RIGHTS. Gene Logic retains all rights to Nucleic Acid
Products and Diagnostic Products, except as otherwise agreed between the
parties pursuant to Section 5.4. Upon termination of Organon's rights to use
the Research Database, the GENE EXPRESS-TM- NORMAL Database and the Gene
Logic Software, except with respect to any Gene Target being pursued in
Further Development by Organon in accordance with this Agreement, all rights
to all Gene Products and related information will revert to Gene Logic and
Gene Logic will have a non-exclusive, perpetual, fully-paid, worldwide
license to the data and progeny derived from the Samples provided by Organon
and related information contained in the Research Database.
*Confidential Treatment Requested
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6. PAYMENTS AND ROYALTIES.
6.1 DATABASE ACCESS PAYMENTS TO GENE LOGIC. The following payments
("Database Access Fees") will be made to Gene Logic to defray research costs
associated with creating the Research Database and analyzing Samples pursuant to
the Research Plan:
(a) Organon shall pay Gene Logic (i) [. . . *** . . .] upon the
Agreement Date and (ii) [ . . . *** . . .] upon Gene Logic's development of a
Research Database containing READS-TM- data for [ . . . *** . . .] Samples
(I.E., [ . . . *** . . .] Samples supplied by Organon) OR on the
[ . . . *** . . .] of the Effective Date if Gene Logic has developed a
Research Database containing READS-TM- data on [ . . . *** . . .] of any
lesser number of Samples provided by Organon during the first year of
the Research Term.
(b) Organon shall pay Gene Logic [ . . . *** . . .] on the second
anniversary of the Effective Date; provided that the Research Term has not been
terminated pursuant to Section 2.5.
(c) Organon shall pay Gene Logic [ . . . *** . . .] on the third
anniversary of the Effective Date; provided that the Research Term has not been
terminated pursuant to Section 2.5.
6.2 RESEARCH SUPPORT.
(a) During the Research Term, Organon shall provide Gene Logic with
financial support for the Research Program for Gene Logic's Scientific FTEs at a
rate of [ . . . *** . . .] per Scientific FTE. The FTE payment rate payable
pursuant to this Section 6.2(a) shall be reevaluated annually on each
anniversary of the Effective Date and adjusted in proportion to the percentage
increase in the Consumer Price Index since the last adjustment. The number of
Scientific FTEs for each year of the Research Term will be set forth in the
applicable Research Plan; provided that such number shall not be less than [ .
. . *** . . .] Scientific FTEs in any one-year period.
(b) Research funding payments shall be made in advance in four
quarterly payments during each year of the Research Term (i.e., on or before
April 1, July 1, October 1 and January 1 of each year for use in the next
quarter). An initial payment will be made within 15 days of the Effective Date,
pro-rated to cover the remainder of such calendar quarter. The last payment for
the Research Program shall be pro-rated to the end of Research Term.
(c) If the Research Program is terminated by Organon pursuant to
Section 2.5, Organon shall continue to provide Gene Logic with financial support
for the terminated Research Program for the number of Scientific FTEs provided
in the then
*Confidential Treatment Requested
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applicable Research Plan as otherwise provided in this Section 6.2 until the
effective date of the termination following the notice period as provided in
Section 2.5.
6.3 GENE TARGET FEES. Organon shall pay [ . . . *** . . .] to Gene
Logic for each Gene Target which Organon selects for Further Development
pursuant to Section 2.6. The [ . . . *** . . .] payment shall be made to Gene
Logic prior to commencement of Further Development using such Gene Target. At
the time of such payment, Organon will notify Gene Logic in writing of whether
it wishes to obtain rights to such Gene Target in the Protein Product Field of
Use.
6.4 ROYALTIES PAYABLE BY ORGANON.
(a) Organon will pay Gene Logic royalties at the following rates on
Net Sales of each Product:
(i) Organon shall pay Gene Logic a royalty on Net
Sales of each Therapeutic Product as follows:
Annual Net Sales
(million US$) Royalty Rate
[ . . . *** . . .] [ . . . *** . . .]
(ii) Organon shall pay Gene Logic a royalty on Net
Sales of each Protein Product as follows:
Annual Net Sales
(million US$) Royalty Rate
[ . . . *** . . .] [ . . . *** . . .]
(b) The royalty payable with respect to all Net Sales during a
given calendar year shall be calculated by multiplying total Net Sales during
such calendar year by the applicable royalty rate determined based on total
Net Sales during such calendar year. Royalties shall be payable on all Net
Sales of any Product for the period of time commencing on the date such
Product is first sold commercially in any country and ending, on a
country-by-country basis, [. . . *** . . .] from the date of such first
commercial sale of such Product in such country. Organon shall remain
responsible for all royalty payments payable to Gene Logic pursuant to this
Section 6 whether Organon or its Affiliates or sublicensees or any Third
Party to whom Organon has provided Gene Targets under Section 5.1 generates
Net Sales.
*Confidential Treatment Requested
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6.5 CURRENCY OF PAYMENT. All payments to be made under this Agreement
shall be made in United States dollars in the United States to a bank account
designated by Gene Logic. All amounts payable by Organon to Gene Logic pursuant
to this Section 6 shall be non-refundable and non-creditable against any other
payments due under this Agreement. Royalties shall be determined in the
currency of the country in which they are earned and then converted to its
equivalent in United States currency. The buying rates involved for the
currency of the United States into which the currencies involved are being
exchanged shall be the one quoted by The Wall Street Journal (or, if not
available, by Citibank (or its successor in interest) in New York, New York) at
the close of business on the last business day of the quarterly period in which
the royalties were earned to determine any such conversion.
6.6 PAYMENT AND REPORTING. By March 1 of each calendar year, Organon
will communicate to Gene Logic a forecast of Net Sales for each Product to be
sold pursuant to this Agreement in a given calendar year on a country-by-country
basis, including a calculation of the royalty amount payable for each Product
using such forecast and supporting data sufficient to confirm the accuracy of
such calculations (the "Forecast Royalty Amount") starting the quarter in which
the first commercial sale is made for such Product. Gene Logic will issue an
invoice to Organon on the first day of the months of April, July and October for
an amount equal to 25% of the Forecast Royalty Amount, payable within 30 days
after the date of such invoice. Within 30 days after the end of each calendar
year, Organon will communicate to Gene Logic the actual Net Sales for each
Product sold pursuant to this Agreement for such calendar year, including a
calculation of the royalty amount payable on such actual Net Sales and
supporting data sufficient to confirm the accuracy of such calculations (the
"Actual Royalty Amount"). Gene Logic will promptly issue either an invoice to
Organon for the amount, if any, by which the Actual Royalty Amount exceeds all
royalty payments already made for such calendar year, payable within 30 days
after the date of such invoice or a credit to be applied to the next quarter if
an overpayment has occurred. All amounts payable to Gene Logic pursuant to this
Agreement shall be made by wire transfer pursuant to the instructions set forth
on Schedule 6.6.
6.7 RECORDS AND AUDITS. During the Agreement Term and for a period of
five years thereafter, Organon shall keep complete and accurate records
pertaining to the development and sale or other disposition of Products in
sufficient detail to permit Gene Logic to confirm the accuracy of all payments
due hereunder. Gene Logic shall have the right to cause an independent,
certified public accountant reasonably acceptable to Organon to audit such
records to confirm Net Sales and royalty and other payments for the preceding
year. Such audits may be exercised during normal business hours once a year
upon at least 30 working days' prior written notice to Organon. Gene Logic
shall bear the full cost of such audit unless such audit discloses a variance of
more than 5% from the amount of the Net Sales or royalties or other payments due
under this Agreement. In such case, Organon shall bear the full cost of such
audit and Gene Logic shall have the right to audit all prior years not
previously audited.
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7. MILESTONES FOR THERAPEUTIC PRODUCTS AND PROTEIN PRODUCTS.
7.1 MILESTONES.
(a) Organon shall pay Gene Logic the following amount with respect
to each Therapeutic Product designated as a Therapeutic Product Lead (defined
below), within 30 days following such designation:
(i) [ . . . *** . . .] for each Therapeutic Product
designated as a Therapeutic Product Lead within [ . . . *** . . .] following the
date of selection of a Gene Target for Further Development pursuant to Section
2.6; or
(ii) [ . . . *** . . .] for each Therapeutic Product
designated as a Therapeutic Product Lead if such designation occurs anytime
after [ . . . *** . . .] following the date of selection of a Gene Target for
Further Development pursuant to Section 2.6.
For purposes of this Section 7.1(a), a Therapeutic Product is designated a
"Therapeutic Product Lead" when Organon commences the Synthesis and Testing
phase of development of such Therapeutic Product. Organon shall provide prompt
written notice to Gene Logic thereof.
(b) Organon shall pay Gene Logic the following amount with respect
to each Protein Product designated as a Protein Product Lead (defined below),
within 30 days following such designation:
(i) [ . . . *** . . . ] for each Protein Product designated
as a Protein Product Lead within [ . . . *** . . .] following the date of
selection of a Gene Target for Further Development pursuant to Section 2.6; or
(ii) [ . . . *** . . .] for each Protein Product designated
as a Protein Product Lead if such designation occurs anytime after [ . . . *** .
. . ] following the date of selection of a Gene Target for Further Development
pursuant to Section 2.6.
For purposes of this Section 7.1(b), a Protein Product is designated a "Protein
Product Lead" when Organon commences the Synthesis and Testing phase of
development of such Protein Product. Organon shall provide prompt written
notice to Gene Logic thereof.
7.2 MILESTONE PAYMENTS. Milestone payments made under this
Section 7 shall be non-refundable and non-creditable against any other payments
due under this Agreement. Milestone payments made under this Section 7 shall
fund in substantial part the research costs associated with this Agreement.
*Confidential Treatment Requested
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8. CONFIDENTIALITY AND SECURITY.
8.1 SECURITY OF RESEARCH DATABASE, GENE EXPRESS-TM- NORMAL DATABASE
AND GENE LOGIC SOFTWARE. The parties agree that the following additional terms
and conditions apply to the information and data contained in or derived from
the Research Database and the GENE EXPRESS-TM- NORMAL Database that are
disclosed and Gene Logic Software that is provided under the provisions of this
Agreement:
(a) Organon may use the Research Database, the GENE EXPRESS-TM-
NORMAL Database and the Gene Logic Software only for its own internal use in
secure work facilities by authorized personnel and shall not make any copies of
the Research Database, the GENE EXPRESS-TM- NORMAL Database or the Gene Logic
Software.
(b) Organon will be provided with access to the Research Database,
the GENE EXPRESS-TM- NORMAL Database and the Gene Logic Software only through a
secure, encrypted link to Gene Logic's computer system.
(c) Organon will promptly notify Gene Logic of any (i) loss, theft
or unauthorized disclosure of information or data derived from the Research
Database, the GENE EXPRESS-TM- NORMAL Database or the Gene Logic Software and
(ii) unauthorized access to the Research Database, the GENE EXPRESS-TM- NORMAL
Database or the Gene Logic Software.
(d) Upon termination of the term of the applicable license as
provided in Section 5.1 with respect to the Research Database or the GENE
EXPRESS-TM- NORMAL Database and upon termination of the Research Program as
provided in Section 2.5 with respect to the Gene Logic Software, Organon shall
immediately discontinue use of the Research Database or the GENE EXPRESS-TM-
NORMAL Database, and of any information or data derived from the Research
Database (except for Gene Targets that are the subject of the licenses as set
forth in Section 5.3) or the GENE EXPRESS-TM- NORMAL Database, or use of the
Gene Logic Software, as applicable, and Organon shall (i) cooperate with Gene
Logic to terminate the encrypted link to Gene Logic's computer system and (ii)
promptly deliver to Gene Logic copies of any information and data derived from
the Research Database, the GENE EXPRESS-TM- NORMAL Database or the Gene Logic
Software, as applicable.
8.2 CONFIDENTIALITY.
(a) Except as specifically permitted hereunder, each party hereby
agrees to hold in confidence and not use on behalf of itself or others all
technology, data, samples, technical information, commercialization, clinical
and research strategies, know-how and trade secrets provided by the other party
(the "Disclosing Party") during the Agreement Term and all data, results and
information developed pursuant to the Research Program and solely owned by the
Disclosing Party or jointly owned by the parties
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(collectively the "Confidential Information"), except that the term
"Confidential Information" shall not include:
(i) information that is or becomes part of the public domain
through no fault of the party that receives such Confidential Information (the
"Receiving Party") or its Affiliates;
(ii) information that is obtained after the date hereof by
the Receiving Party or one of its Affiliates from any Third Party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;
(iii) information that is known to the Receiving Party or one
or more of its Affiliates prior to disclosure by the Disclosing Party, as
evidenced by the Receiving Party's written records;
(iv) information which has been independently developed by
the Receiving Party or one of its Affiliates without the use of such
Confidential Information, as evidenced by the Receiving Party's written records;
and
(v) information that is required to be disclosed to any
governmental authorities or pursuant to any regulatory filings, but only to the
limited extent of such legally required disclosure.
(b) The obligations of this Section 8.2 shall survive for a period
of 10 years from the completion or termination of the Research Program with
respect to Confidential Information resulting from the Research Program and for
a period of five years following the date of disclosure with respect to any
other Confidential Information.
8.3 PERMITTED DISCLOSURES. Confidential Information may be disclosed to
employees, agents, consultants or sublicensees of the Receiving Party or its
Affiliates and, with respect to Organon, any Third Party to whom Organon is
permitted to provide Gene Targets under Section 5.1, but only to the extent
required to accomplish the purposes of this Agreement and only if the Receiving
Party obtains prior agreement from its employees, agents, consultants and
sublicensees and, with respect to Organon, any Third Party to whom Organon is
permitted to provide Gene Targets under Section 5.1 to whom disclosure is to be
made to hold in confidence and not make use of such information for any purpose
other than those permitted by this Agreement. Each party will use at least the
same standard of care as it uses to protect proprietary or confidential
information of its own to ensure that such employees, agents, consultants and
sublicensees and, with respect to Organon, any Third Party to whom Organon is
permitted to provide Gene Targets under Section 5.1 do not disclose or make any
unauthorized use of the Confidential Information. Notwithstanding any other
provision of this Agreement, each party may disclose the terms of this Agreement
to lenders,
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investment bankers and other financial institutions of its choice solely for
purposes of financing the business operations of such party either (i) upon
the written consent of the other party or (ii) if the disclosing party
obtains a signed confidentiality agreement with such financial institution
with respect to such information, upon terms substantially similar to those
contained in this Section 8.
8.4 PUBLICATION. The parties shall cooperate in appropriate publication
of the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, prior to any public disclosure
of such results, the party proposing disclosure (the "Publishing Party") shall
send the other party (the "Reviewing Party") a copy of the information to be
disclosed, and shall allow the Reviewing Party 30 days from the date of receipt
in which to determine whether the information to be disclosed contains subject
matter for which patent protection should be sought prior to disclosure, or
otherwise contains Confidential Information of the Reviewing Party. The
Publishing Party shall be free to proceed with the disclosure unless prior to
the expiration of such 30-day period the Reviewing Party notifies the Publishing
Party that the disclosure contains subject matter for which patent protection
should be sought or Confidential Information of the Reviewing Party, and the
Publishing Party shall then delay public disclosure of the information for an
additional period of up to six months to permit the preparation and filing of a
patent application on the subject matter to be disclosed or for the parties to
determine a mutually acceptable modification to such publication to protect the
Confidential Information of the Reviewing Party adequately. The Publishing
Party shall thereafter be free to publish or disclose the information. The
determination of authorship for any paper shall be in accordance with accepted
scientific practice.
8.5 PRESS RELEASE. The parties agree that a press release announcing
the matters covered by this Agreement will be prepared in advance and will be
subject to the mutual approval of the parties, which approval will not
unreasonably be withheld; PROVIDED, HOWEVER, that nothing herein shall prohibit
a party from disclosing the terms of this Agreement to the extent required to
comply with applicable securities laws.
9. REPRESENTATIONS AND WARRANTIES.
9.1 LEGAL AUTHORITY. Each party represents and warrants to the other
that it has the legal power, authority and right to enter into this Agreement
and to perform its respective obligations set forth herein.
9.2 VALID LICENSES. Each party represents and warrants that it has
authority to grant the rights and licenses set forth in this Agreement.
9.3 NO CONFLICTS. Each party represents and warrants that as of the
Agreement Date it is not a party to any agreement or arrangement with any Third
Party or under any obligation or restriction, including pursuant to its
Certificate of Incorporation or By-Laws
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or other charter documents, which in any way limits or conflicts with its
ability to fulfill any of its obligations under this Agreement.
9.4 DISCLAIMER. Except as expressly set forth in this Agreement, EACH
PARTY MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE
INFORMATION, MATERIALS, SOFTWARE AND OTHER TECHNOLOGY PROVIDED HEREUNDER WILL
NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF ANY THIRD
PARTY. NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND AS TO THE PATENTABILITY OF
ANY DISCOVERY MADE OR TECHNOLOGY DEVELOPED UNDER THIS AGREEMENT. EACH PARTY
ACKNOWLEDGES THAT THIS AGREEMENT PROVIDES FOR AN INNOVATIVE PROGRAM UTILIZING
NEW TECHNOLOGIES AND THAT NO WARRANTY IS MADE AS TO THE UTILITY OF ANY
INFORMATION, MATERIALS, SOFTWARE OR OTHER TECHNOLOGY PROVIDED HEREUNDER.
10. TERM; TERMINATION.
10.1 TERM. The term of this Agreement shall commence upon the Effective
Date and shall expire upon the expiration of all royalty obligations set forth
in Section 6.4.
10.2 TERMINATION FOR BREACH.
(a) BREACH BY GENE LOGIC. If Gene Logic breaches a material term
of this Agreement at any time, and has not cured such breach within 60 days
after written notice thereof from Organon, then Organon shall have the right to
terminate this Agreement effective upon written notice thereof, whereupon all
rights and obligations of the parties under this Agreement shall terminate
except as set forth in Section 10.5 and subject to the following: (i) the
licenses granted to Organon under Section 5 shall remain in full force and
effect for so long as Organon is not in breach of its obligations to Gene Logic
under this Agreement and (ii) Gene Logic shall return to Organon all
Confidential Information of Organon.
(b) BREACH BY ORGANON. If Organon breaches a material term of this
Agreement at any time, and has not cured such breach within 60 days (or within
15 days in the event of a material breach by Organon of its obligations to make
any royalty payments due) after written notice thereof from Gene Logic, then
Gene Logic shall have the right to terminate this Agreement effective upon
written notice thereof, whereupon all rights and obligations of the parties
under this Agreement shall terminate except as set forth in Section 10.5 and
subject to the following: (i) the licenses granted to Organon pursuant to
Section 5.1 shall terminate, (ii) if such termination occurs as the result of a
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material breach by Organon of its obligations to make any payment due under
Section 6.3, 6.4 or 7, the licenses granted to Organon pursuant to Section 5.3
shall terminate, (iii) the right of first negotiation granted to Organon
pursuant to Section 5.4 shall terminate and (iv) Organon shall return to Gene
Logic all Confidential Information of Gene Logic. In the event of an uncured
material breach by Organon of its obligations to pay any royalties due and owing
with respect to a Product pursuant to Section 6.4, if Gene Logic terminates the
licenses it has granted to Organon pursuant to Section 5 in respect of such
Product, at Gene Logic's request, Organon shall grant to Gene Logic an exclusive
(even as to Organon) worldwide license (with the right to sublicense) to such
Product, to the extent necessary to make, use or sell such Product subject to
payment of a [ . . . *** . . .] royalty to Organon on Net Sales of such Product,
and shall further assign to Gene Logic all Regulatory Approvals (to the extent
permitted by law) in such countries.
10.3 EFFECT OF BANKRUPTCY. If, during the Research Term, either party
files a voluntary petition in bankruptcy, is adjudicated a bankrupt, makes a
general assignment for the benefit of creditors, admits in writing that it is
insolvent or fails to discharge within 15 days an involuntary petition in
bankruptcy filed against it, then the Research Term and the entirety of this
Agreement may be immediately terminated by the other party.
10.4 REMEDIES. In the event of any breach of any provision of this
Agreement, in addition to the termination rights set forth herein, each party
shall have all other rights and remedies at law or equity to enforce this
Agreement.
10.5 SURVIVAL. Sections 4.1, 4.2, 4.3, 4.4, 5.7, 8.2, 9, 10.2 (including
the provisions therein that are contemplated to continue following termination)
10.5, 11, 12.1 and 12.4 shall survive the termination or expiration of this
Agreement.
11. DISPUTE RESOLUTION.
11.1 MEDIATION. Subject to Section 3.4, the parties shall resolve any
controversy arising under or related to this Agreement, and any disputed claim
by either party against the other under this Agreement, excluding any dispute
relating to patent validity or infringement arising under this Agreement, by
mediation using the Center for Public Resources ("CPR"). Unless the parties
agree otherwise, the mediator will be selected from CPR and, if they require it,
the parties shall notify CPR to initiate a selection process. The language of
the mediation shall be English and the location of the mediation shall be
Baltimore, Maryland unless the parties hereto mutually agree in writing to
another place.
11.2 FURTHER RESOLUTION. If the dispute has not been resolved by
non-binding means as provided in Section 11.2 hereof, either party shall be free
to take any action and seek any remedy it may have at law or in equity. Without
limiting the foregoing, either party shall have the right, at any time, to seek
specific performance and injunctive relief
*Confidential Treatment Requested
25
hereunder. In any legal action relating to this Agreement, each party agrees
to the exercise of jurisdiction over it by a state or federal court in
Baltimore, Maryland and that any action brought hereunder shall be instituted
in such court.
12. GENERAL PROVISIONS.
12.1 MUTUAL INDEMNIFICATION. Each party agrees to defend, indemnify and
hold harmless the other party and its Affiliates, employees, agents, officers,
directors and permitted from and against any judgments, settlements, damages,
awards, costs (including attorneys' fees and costs) and other expenses arising
out of any claims, actions or other proceedings by a Third Party (collectively a
"Claim") arising out of or resulting from the development, manufacture, use,
promotion, marketing, handling, storage or sale of any Product, except to the
extent that such Claim arises out of or results from the negligence or
misconduct of the party claiming a right of indemnification under this
Section 12.1, and to the extent that such Claim arises out of or results from
infringement of the patent rights of any Third Party by the Gene Logic
Technology if Gene Logic is the party claiming a right of indemnification under
this Section 12.1. In the event either party seeks indemnification under this
Section 12.1, it shall inform the other party of a Claim as soon as reasonably
practicable after it receives notice of the Claim, shall permit the other party
to assume direction and control of the defense of the Claim (including the right
to settle the Claim solely for monetary consideration), and shall cooperate as
requested (at the expense of the other party) in the defense of the Claim. The
obligations set forth in this Section shall survive the expiration or
termination of this Agreement.
12.2 ASSIGNMENT. This Agreement shall not be assignable by either party
without the prior written consent of the other party, such consent not to be
unreasonably withheld or delayed, except a party may make such an assignment
without the other party's consent to Affiliates or to a successor to
substantially all of the business of such party, whether in merger, sale of
stock, sale of assets or other transaction; PROVIDED, HOWEVER, that in the event
of such transaction, no intellectual property rights of any Affiliate or Third
Party that is an acquiring party shall be included in the technology licensed
hereunder. This Agreement shall be binding upon and inure to the benefit of the
parties' successors, legal representatives and assigns.
12.3 NON-WAIVER. The waiver by either of the parties of any breach of
any provision hereof by the other party shall not be construed to be a waiver of
any succeeding breach of such provision or a waiver of the provision itself.
12.4 GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Maryland other than those provisions
governing conflicts of law.
12.5 PARTIAL INVALIDITY. If and to the extent that any court or tribunal
of competent jurisdiction holds any of the terms or provisions of this
Agreement, or the
26
application thereof to any circumstances, to be invalid or
unenforceable in a final nonappealable order, the parties shall use their best
efforts to reform the portions of this Agreement declared invalid to realize the
intent of the parties as fully as practicable, and the remainder of this
Agreement and the application of such invalid term or provision to circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each of the remaining terms and provisions of this
Agreement shall remain valid and enforceable to the fullest extent of the law.
12.6 NOTICE. Any notice to be given to a party under or in connection
with this Agreement shall be in writing and shall be (i) personally delivered,
(ii) delivered by a nationally recognized overnight courier, (iii) delivered by
certified mail, postage prepaid, return receipt requested or (iv) delivered via
facsimile, with receipt confirmed, to the party at the address set forth below
for such party:
To Organon: To Gene Logic:
Kloosterstraat 6 10150 Old Columbia Road
5349 AB Oss Columbia, Maryland 21046
The Netherlands Attn: President
Attn: Vice President, Research Phone: (410) 309-3100
and Development Fax: (410) 309-3111
Phone: 31-412-666299
Fax: 31-412-666373
with a copy to: with a copy to:
Manager Licensing Department L. Kay Chandler, Esq.
Kloosterstraat 6 Cooley Godward LLP
5349 AB Oss 4365 Executive Dr., Suite 1100
The Netherlands San Diego, CA 92121
Phone: 31-412-666299 Phone: (619) 550-6000
Fax: 31-412-666373 Fax: (619) 453-3555
or to such other address as to which the party has given written notice
thereof. Such notices shall be deemed given upon receipt.
12.7 HEADINGS. The headings appearing herein have been inserted solely
for the convenience of the parties hereto and shall not affect the construction,
meaning or interpretation of this Agreement or any of its terms and conditions.
12.8 NO IMPLIED LICENSES OR WARRANTIES. No right or license under any
patent application, issued patent, know-how or other proprietary information is
granted or shall be granted by implication. All such rights or licenses are or
shall be granted only as expressly provided in the terms of this Agreement.
Neither party warrants that (i) the
27
Research Program shall achieve any of the research objectives contemplated by
them or (ii) any clinical or other studies will be successful.
12.9 FORCE MAJEURE. No failure or omission by the parties hereto in the
performance of any obligation of this Agreement shall be deemed a breach of this
Agreement nor shall it create any liability if the same shall arise from any
cause or causes beyond the reasonable control of the affected party, including,
but not limited to, the following, which for purposes of this Agreement shall be
regarded as beyond the control of the party in question: acts of nature; acts or
omissions of any government; any rules, regulations, or orders issued by any
governmental authority or by any officer, department, agency or instrumentality
thereof; fire; storm; flood; earthquake; accident; war; rebellion; insurrection;
riot; invasion; strikes; and labor lockouts; provided that the party so affected
shall use its best efforts to avoid or remove such causes of nonperformance and
shall continue performance hereunder with the utmost dispatch whenever such
causes are removed.
12.10 ENTIRE AGREEMENT. This Agreement, including the exhibits and
schedules hereto, constitutes the entire understanding between the parties with
respect to the subject matter contained herein and supersedes any and all prior
agreements, understandings and arrangements whether oral or written between the
parties relating to the subject matter hereof, except for the Mutual
Confidential Disclosure Agreement dated August 25, 1997.
12.11 AMENDMENTS. No amendment, change, modification or alteration of the
terms and conditions of this Agreement shall be binding upon either party unless
in writing and signed by the party to be charged.
12.12 INDEPENDENT CONTRACTORS. It is understood that both parties hereto
are independent contractors and are engaged in the operation of their own
respective businesses, and neither party hereto is to be considered the agent or
partner of the other party for any purpose whatsoever. Neither party has any
authority to enter into any contracts or assume any obligations for the other
party or make any warranties or representations on behalf of the other party.
12.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
GENE LOGIC INC. N.V. ORGANON
By: /s/ MICHAEL J. BRENNAN By: /s/ H.J. VERGOUWEN
------------------------------- ---------------------------
Michael J. Brennan, M.D., Ph.D. Name: H.J. Vergouwen
President and Chief Executive Officer Title: Managing Director R&D
By: /s/ G.B.A. SMEVEL
------------------
G.B.A. Smevel
Managing Director I&C
29
SCHEDULE 2.1
[ . . . *** . . . ]
The foregoing list may be amended by Gene Logic from time to time to delete one
or more of the specified indications.
*Confidential Treatment Requested
SCHEDULE 3.1
RMC REPRESENTATIVES
ORGANON:
[To be determined at the first RMC meeting]
GENE LOGIC:
Keith O. Elliston, Ph.D.
Daniel R. Passeri, J.D.
SCHEDULE 6.6
WIRE TRANSFER PAYMENT INSTRUCTIONS
Bank: [ . . . *** . . . ]
Location: [ . . . *** . . . ]
ABA #:
For further credit to client funds #: [ . . . *** . . . ]
Account Name: GENE LOGIC INC.
Account #: [ . . . *** . . . ]
*Confidential Treatment Requested