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Abbott Labs / ArQule - RESEARCH & DEVELOPMENT AND LICENSE AGREEMENT
RESEARCH & DEVELOPMENT AND LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective as of the 16th day of June, 1995 ("Effective Date"), by and between ABBOTT LABORATORIES, an Illinois corporation having a principal place of business at 100 Abbott Park Road, Abbott Park, Illinois 60064 ("Abbott") and ARQULE, INC., a Delaware corporation having a principal place of business at 200 Boston Avenue, Suite 3600, Medford, Massachusetts 02155 ("ArQule").
WHEREAS, ArQule has expertise relating to the modification of pharmaceutical compounds by use of combinatorial chemistry methods utilizing rapid parallel synthesis;
WHEREAS, Abbott has expertise in the discovery, development, marketing and sale of pharmaceuticals and other health care products;
WHEREAS, Abbott desires to have ArQule generate large numbers of ArQule's own compounds as well as compounds derived from specifically targeted parallel synthesis of Abbott provided compounds;
WHEREAS, Abbott desires to perform screening of ArQule's compounds and compounds derived by ArQule from Abbott provided compounds for possible further research and development by Abbott;
WHEREAS, as part of such research and development effort and contingent upon ArQule performing research and development activities under a mutually agreed upon research and development plan, Abbott shall provide certain funding to ArQule for its research and development activities; and
WHEREAS, if Abbott commercially develops any such compounds, Abbott shall pay ArQule milestone payments on such compounds which achieve certain commercial milestones as well as royalties on commercial sales of pharmaceutical products containing such compounds, all on the terms and conditions stated below;
NOW, THEREFORE, in consideration of the foregoing premises and mutual covenants contained herein, Abbott and ArQule hereby agree as follows:
ARTICLE 1
For the purposes of this Agreement, the terms defined in this Article 1 shall have the respective meanings set forth below:
1.1 "Abbott Compound" shall mean an Abbott Core Compound (as defined below) or an Abbott Derivative Compound (as defined below).
1.2 "Abbott Core Compound" shall mean a core chemical compound supplied to ArQule by Abbott pursuant to Section 2.1.
1.3 "Abbott Derivative Compound" shall mean a chemical compound generated by ArQule for Abbott by use of chemical modification methods from an Abbott Core Compound pursuant to Section 2.1.
1.4 "Abbott Field" shall mean *
1.5 "Active ArQule Array" shall mean an ArQule Array (as defined below) that contains at least one (1) Active ArQule Compound (as defined below).
1.6 "Active ArQule Compound" shall mean *
or such higher concentration level demonstrating significant biological activity as the parties may mutually agree upon.
1.7 "Affiliate" shall mean, with respect to a party, any other business entity which directly or indirectly controls, is controlled by, or is under common control with, such party. A business entity or party shall be regarded as in control of another business entity if it owns, or directly or indirectly controls, more than fifty percent (50%) of the voting stock or other ownership interest of the other business entity. For purposes of this Agreement, Abbott Affiliates shall also include the following entities: Abbott Laboratories (India) Ltd. and Abbott Laboratories Nigeria Limited.
1.8 "ArQule Array" shall mean a set of at least * ArQule Core Compounds (as defined below) provided by ArQule to Abbott for screening pursuant to Section 5.1.
1.9 "ArQule Compound" shall mean an ArQule Core Compound or an ArQule Derivative Compound (as defined below).
1.10 "ArQule Core Compound" shall mean a core chemical compound from an ArQule Array supplied by ArQule to Abbott pursuant to Section 5.1.
* Confidential treatment has been
requested for marked portions
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1.11 "ArQule Derivative Compound" shall mean a chemical compound generated by ArQule for Abbott or by Abbott, its Affiliates or contractors by use of chemical modification methods from an ArQule Core Compound.
1.12 "ArQule Field" shall mean *
1.13 "Array Screening Period" shall mean a period of three (3) Contract Years (as defined below) commencing on the Effective Date.
1.14 "Array Transfer Period" shall mean a period of two (2) Contract Years commencing on the Effective Date.
1.15 "Calendar Quarter" shall mean each of the three (3) month periods beginning on January 1, April 1, July 1 and October 1 of each year.
1.16 "Combination Product" shall mean a pharmaceutical product containing a Product (as defined below) and at least one (1) other therapeutically active ingredient.
1.17 "Composition of Matter Patent" shall mean any national or European Union patent(s) of either party or their Affiliates issued anywhere in the Territory (as defined below) which claims an Abbott Derivative Compound or an ArQule Compound, including any patent(s) issuing from any divisions, continuations, continuations-in-part, reexaminations, or reissues thereof, and any additions, renewals, and extensions of such patent(s).
1.18 "Contract Quarter" shall mean the three (3) month period beginning on the Effective Date and each subsequent three (3) month period during the Research Term.
1.19 "Contract Year" shall mean the twelve (12) month period beginning on the Effective Date and each subsequent twelve (12) month period during the term of this Agreement.
1.20 "FDA" shall mean the United States Food and Drug Administration or any successor entity thereto.
1.21 "FTE" shall mean one (1) or more employees of a party who, collectively, spend time and effort working on a specified project or task equivalent to the time and effort of one (1 ) full-time employee of a party working on such project or task.
1.23 "Licensed Final Compound" shall mean a specific ArQule Compound from a Licensed Compound Set that Abbott commercially develops, markets and/or sells pursuant to Section 5.9.
1.24 "Licensed Compound Set" shall mean a list of specific ArQule Compounds licensed to Abbott by ArQule, in accordance with the procedures set forth in Section 5.6, as well as all prodrugs, esters and salt forms of such ArQule Compounds.
1.25 "Licensed Set Core" shall have the meaning set forth in Section 5.6(a).
* Confidential treatment has been
requested for marked portions
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1.26 "License Option Period" shall mean a period of ten (10) Contract Years commencing on the Effective Date.
1.27 "NDA" shall mean a New Drug Application filed with the FDA with respect to a Product.
1.28 "Net Sales" shall mean:
(a) With respect to a Product sold alone, the gross
invoiced sales of such Product by Abbott, its
Affiliates and/or sublicensees to unrelated third
parties, less the following deductions:
*
(b) With respect to a Combination Product, the gross
invoiced sales of such Combination Product in a
particular country by Abbott, its Affiliates and/or
sublicensees to unrelated third parties less the
deductions under (i) - (vi) above, multiplied by a
fraction (i) the numerator of which shall be the per
unit current wholesale selling price of the Product
contained in the Combination Product, as sold alone
in such country, and (ii) the denominator of which
shall be the sum of the per unit current wholesale
selling price in such country of each active
ingredient in such Combination Product (including the
Product) as sold alone as a pharmaceutical product.
If there is no established current wholesale selling
price of the Product contained in such Combination
Product or any other active ingredient of such
Combination Product in a particular country, then the
standard, fully-burdened manufacturing cost of the
Product and other active
* Confidential treatment has been
requested for marked portions
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ingredient(s) shall be used to determine the above
fraction, with such costs being determined in
accordance with United States generally accepted
accounting principles.
(c) With respect to a Product that is sold in a Premium
Delivery System (as defined below), an amount
calculated by multiplying (i) the total number of
milligrams of the ArQule Compound or Abbott
Derivative Compound, as applicable, in such Product
sold in Premium Delivery Systems in a particular
country by Abbott, its Affiliates and/or sublicensees
to unrelated third parties, by (ii) the average
selling price of one (1 ) milligram of the ArQule
Compound or Abbott Derivative Compound, as
applicable, in such Product sold in such country by
Abbott, its Affiliates and/or sublicensees to
unrelated third parties in the same reporting period,
which Product is not sold in Premium Delivery
Systems. For purposes of the foregoing sentence,
"average selling price" is the total Net Sales of
such Product not sold in Premium Delivery Systems
calculated pursuant to subparagraph (a) above divided
by the aggregate number of milligrams of the ArQule
Compound or Abbott Derivative Compound, as
applicable, contained in all such Products to which
such Net Sales apply. If such Product is only sold in
Premium Delivery Systems during the applicable
reporting period, then the "Net Sales" of the Product
sold in Premium Delivery Systems shall be determined
by multiplying the "Net Sales" of the Premium
Delivery System containing such Product calculated
pursuant to subparagraph (a) above by a fraction (A)
the numerator of which shall be the standard,
fully-burdened manufacturing cost of the Product and
(B) the denominator of which shall be the standard,
fully-burdened manufacturing cost of all of the
ingredients and components of the Premium Delivery
System (including such Product). As used herein,
"Premium Delivery System" means any drug delivery
system product which comprises a drug or drugs along
with a device(s), equipment, instrumentation, or
other components (but not solely containers or
packaging) designed to accomplish or assist in the
non-oral administration of such drug(s) and thereby
enhance the value of such drug(s), including but not
limited to the Abbott ADD-Vantage(R)System.
1.29 "Patent Rights" shall mean (a) all patent applications filed anywhere in the Territory by either party or their Affiliates having claims relating to a Product, Abbott Derivative Compound or ArQule Compound, or the process of manufacture or use thereof, together with any patents issuing therefrom (including but not limited to Composition of Matter Patents), and (b) all divisions, continuations, continuations-in-part, reexaminations, reissues, additions, renewals and extensions of such patent applications and patents. Patent Rights owned by Abbott shall be referred to as "Abbott Patent Rights", Patent Rights owned by ArQule shall be referred to as "ArQule Patent Rights", and Patent Rights owned by ArQule and Abbott jointly shall be referred to as "Joint Patent Rights", with ownership of Patent Rights to be determined in accordance with United States patent laws and practice.
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1.30 "Phase III Studies" shall mean a program of clinical studies approved by the FDA or other equivalent national or supranational regulatory agencies outside of the United States which, if successfully completed to the satisfaction of the FDA or equivalent agencies outside of the United States, is intended to enable the sponsor of the studies to file an NDA and/or other equivalent applications for Regulatory Approval (as defined below).
1.31 "Product" shall mean any product containing an Abbott Derivative Compound or an ArQule Compound.
1.32 "R & D Committee" shall mean the Research and Development Committee established by the parties pursuant to Article 3.
1.33 "R & D Plan" shall mean the twelve (12) month rolling plan of ArQule research and development activities to be developed by the R & D Committee pursuant to Article 3.
1.34 "R & D Program" shall mean the research and development program funded by Abbott at ArQule as described in Article 3.
1.35 "Regulatory Approval" shall mean all governmental approvals required to market and sell a Product in any given country or multinational region in the Territory (e.g., the European Union), including but not limited to, product registrations, medical approvals, and price/marketing approvals.
1.36 "Research Term" shall mean the two (2) year program of collaborative research by Abbott and ArQule hereunder, which may be extended by Abbott pursuant to Section 2.3 for up to three (3) additional successive one (1) year periods.
1.37 "Reserved Array(s)" shall mean one (1) or more Active ArQule Array(s) for which Abbott exercises a Target Reservation (as defined below) in accordance with the procedures set forth in Section 5.5.
1.38 "Royalty Term" shall mean, with respect to each Product in each country of the Territory where Abbott's obligation to pay royalties pursuant to Section 6.3 is in effect, the period of time commencing with the first commercial sale of such Product by Abbott, its Affiliates and/or sublicensees to an unrelated third party in such country and continuing until Abbott's obligation to pay royalties pursuant to Section 6.3 ceases in such country.
1.39 "Target" shall have the meaning set forth in Section 5.5.
1.40 "Target Reservation" shall mean an Abbott's designation of one (1) or more Active ArQule Arrays as Reserved Arrays for a specified Target pursuant to Section 5.5.
1.41 "Territory" shall mean the entire world.
1.42 "Valid Claim" shall mean a claim of an issued and unexpired Composition of Matter Patent which neither has been held unenforceable or invalid by a decision of a court or
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governmental agency of competent jurisdiction, unappealable or unappeased within the time allowed for appeal, nor has been admitted by the holder of the Composition of Matter Patent to be invalid or unenforceable through reissue, reexamination, disclaimer, abandonment or otherwise.
Additional terms used in specific sections of this Agreement shall be defined in such sections.
ARTICLE 2
R & D PROGRAM
2.1 ArQule Research and Development Activities. Under the direction of the R & D Committee, during the Research Term ArQule shall synthesize Abbott Derivative Compounds from Abbott Core Compounds and/or other Abbott Derivative Compounds supplied to ArQule by Abbott. ArQule shall deliver such Abbott Derivative Compounds to Abbott in a format suitable for use by Abbott in accordance with the R & D Plan, together with structure and purity information and such other information and documentation as Abbott may reasonably request concerning the structural changes ArQule has made to (a) Abbott Core Compounds to synthesize Abbott Derivative Compounds and/or (b) Abbott Derivative Compounds to synthesize further Abbott Derivative Compounds. Except as otherwise agreed by the parties or the R & D Committee, ArQule shall supply Abbott with all quantities of Abbott Derivative Compounds synthesized by ArQule. ArQule shall supply Abbott with mutually agreed upon quantities of each Abbott Derivative Compound in accordance with the R & D Plan, as determined by the R & D Committee, provided that Abbott has supplied ArQule with the necessary quantities of Abbott Core Compounds in accordance with the R & D Plan. ArQule shall conduct the research and development activities described in this Section in a good scientific manner and in compliance with all applicable federal, state and local laws and regulations.
2.2 ArQule FTE Requirements. Unless otherwise agreed in writing by the R & D Committee or the parties, within thirty (30) days after the Effective Date and thereafter for the remainder of the Research Term, ArQule shall maintain a minimum of * FTE scientists to perform research and development activities for Abbott Derivative Compounds and such other activities as the R & D Committee may designate in accordance with the R & D Plan. ArQule employees performing such activities shall be competent, reasonably qualified and adequately trained for their respective duties, and ArQule shall provide Abbott with such information and documentation as Abbott may reasonably request concerning the qualifications and job performance of such ArQule employees, as well as the time they spend performing such activities. The number of FTEs may be increased or decreased by mutual written agreement of the parties upon such terms as may be mutually agreed upon.
2.3 Research Term. The Research Term shall commence on the Effective Date and continue for a period of two (2) Contract Years thereafter. In accordance with Section 2.4, Abbott may, at its option, extend the Research Term for up to three (3) additional Contract Years, exercisable one (1) Contract Year at a time, upon written notice to ArQule at least six (6) months prior to the then scheduled expiration of the Research Term.
* Confidential treatment has been
requested for marked portions
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2.4 Research Term Payments. In consideration of the research and development activities to be performed by ArQule pursuant to Section 2.1, Abbott shall make the following payments to ArQule:
(a) A technology access fee of * Dollars
* for the first two (2) Contract Years,
payable within ten (10) business days of the
Effective Date;
(b) Additional technology access fees of *
Dollars * per Contract Year for each
extension of the Research Term by Abbott pursuant to
Section 2.3, payable on the second, third and fourth
anniversaries of the Effective Date, as applicable;
(c) Research and development funding of
* Dollars * per Contract
Year, payable in semi-annual installments of
* Dollars * at the beginning
of the first and third Contract Quarters of each
Contract Year, which funding is calculated at the
rate of * Dollars * per
ArQule FTE per Contract Year. ArQule shall use such
funding to support its research and development
activities hereunder.
ARTICLE 3
R & D COMMITTEE
3.1 Establishment. The parties hereby establish an R & D Committee to monitor the ArQule research and development activities conducted under this Agreement.
3.2 R & D Plan. The R & D Committee shall develop an initial R & D Plan covering the first twelve (12) months of the Research Term within thirty (30) days of the Effective Date and, thereafter for the remainder of the Research Term, shall update the R & D Plan to provide for a rolling twelve (12) month R & D Plan at least once per Contract Quarter. The R & D Plan shall contain performance goals for ArQule's research and development activities under Section 2.1, including but not limited to minimum numbers of Abbott Derivative Compounds to be developed from Abbott Core Compounds and supplied to Abbott, a timetable and budget for key research and development activities, and such other items as may be agreed upon by the R & D Committee. ArQule shall use commercially reasonable efforts to achieve the performance goals specified in the R & D Plan
.
3.3 Additional Responsibilities. In addition to developing and updating the R & D Plan pursuant to Section 3.2, the R & D Committee shall also have the following responsibilities during the Research Term: (a) monitoring ArQule's research and development activities in accordance with the R & D Plan, (b) recommending changes in the number of FTEs and Abbott's level of research and development funding, if necessary or appropriate to accomplish the objectives of the R & D Plan, provided that any such changes shall require the prior written
* Confidential treatment has been
requested for marked portions
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approval of both parties, and (c) reporting the status of ArQule's research and development activities hereunder to both parties at least once per Calendar Quarter.
3.4 Membership. The R & D Committee shall consist of six (6) members, with three (3) members being appointed by each party. The initial R & D Committee members are:
Abbott Members ArQule Members
----------------- --------------------
1. Alan Rosenthal 1. Joseph Hogan, Jr.
2. Jake Plattner 2. David Coffen
3. Thomas Sowin 3. Robert Zambias
Each party may remove and replace its R & D Committee members at any time, without cause, upon written notice to the other party. An alternate member designated by a party in writing shall be entitled to vote only in the absence of a permanent member designated by such party. All references to "members" in this Agreement refer to the permanent members of the R & D Committee and any alternate member when acting in the place of a permanent member, unless the context requires otherwise.
3.5 Actions. Any action or decision by the R & D Committee must be approved by a majority of the members present at a duly convened meeting of the R & D Committee, including at least one (1) member appointed by each party, or, pursuant to Section 3.8, approved by written consent of a majority of the members, including at least one (1) member appointed by each party. If the R & D Committee cannot agree on a particular matter within the scope of its responsibilities, the matter shall be submitted for dispute resolution in accordance with Article 12.
3.6 Meetings. The R & D Committee shall meet within thirty (30) days after the Effective Date and, thereafter for the remainder of the Research Term, according to a schedule of regular meetings established by the members of the R & D Committee. In no event, however, shall the R & D Committee meet less frequently than once every Contract Quarter during the Research Term. Additional meetings of the R & D Committee may be called by any two (2) members, one (1) of which shall have been appointed by each party. Notice of the date, time and place of each regular or additional meeting and a proposed agenda for the meeting shall be provided to the members, when practicable, at least fifteen (15) days prior to the scheduled date of the meeting (unless notice is waived in writing by a member or party).
3.7 Locations of Meetings. Except as otherwise provided in Section 3.8 or as otherwise mutually agreed by the parties, the regular and additional meetings of the R & D Committee shall alternate between the principal business locations of each party.
3.8 Conduct of Meetings. Any regular or additional meeting of the R & D Committee may be conducted in person or by telephone conference. The R & D Committee may act without a meeting if prior to such action a written consent to the action is signed by a majority of the members, including at least one (1) member appointed by each party. Minutes reflecting actions taken at meetings shall be maintained at a mutually agreed upon location, together with any other
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books and records of the R & D Committee, and such minutes shall be distributed to the parties upon request.
3.9 Cooperation of Parties. Each party shall furnish to the R & D Committee all information and documentation that are reasonably required for purposes of this Agreement, which disclosures shall be subject to the confidentiality obligations specified in Section 8.1. In addition, it is anticipated that the parties will engage in frequent informal communications regarding the research and development activities conducted under this Agreement.
3.10 Visits to ArQule Facilities. R & D Committee members shall have the right to visit the facilities where ArQule's research and development activities hereunder are being conducted at any time during ArQule regular business hours upon reasonable prior notice. Other Abbott representatives may also visit such facilities upon reasonable prior notice with ArQule's prior written consent, which consent shall not be unreasonably withheld. Abbott shall bear its own expenses relating to visits to such facilities by its representatives.
ARTICLE 4
ABBOTT COMPOUND OWNERSHIP AND FURTHER DEVELOPMENT
4.1 Ownership of Abbott Core Compounds. All Abbott Core Compounds supplied to ArQule hereunder shall be the sole and exclusive property of Abbott, except to the extent of any rights held by third parties who have licensed or supplied Abbott Core Compounds to Abbott. ArQule shall not acquire any licenses or intellectual property rights in or relating to Abbott Core Compounds hereunder, and ArQule, its Affiliates, employees and agents shall execute such documents and take such other actions as Abbott deems appropriate to establish or protect Abbott's proprietary rights in Abbott Core Compounds. With respect to any Abbott Core Compounds that are not proprietary to Abbott, ArQule's acceptance of such Abbott Core Compounds and synthesis of Abbott Derivative Compounds from such Abbott Core Compounds shall not preclude ArQule from: (a) entering into an agreement with a third party with respect to research, development and commercialization of such Abbott Core Compounds if they are lawfully in the possession of such third party or (b) having an internal ArQule program (including programs with academic collaborators) concerning the research, development and commercialization of such Abbott Core Compounds, provided that ArQule does not use any Abbott Confidential Information (as defined in Section 8.1 ) in connection with such research, development and commercialization pursuant to (a) or (b) above.
4.2 Ownership of Abbott Derivative Compounds. All Abbott Derivative Compounds synthesized by ArQule, its Affiliates or contractors hereunder shall be the sole and exclusive property of Abbott, except to the extent of any rights held by third parties who have licensed or supplied Abbott Core Compounds to Abbott. Ownership of intellectual property rights in or relating to Abbott Derivative Compounds shall be determined in accordance with Article 10. ArQule hereby grants Abbott a worldwide, royalty-free, irrevocable, exclusive license (with the right to sublicense) under any ArQule Patent Rights and Joint Patent Rights in or relating to any Abbott Derivative Compounds to make, have made, use, import, offer to sell, and sell any product that contains an Abbott Derivative Compound.
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4.3 Further Research and Development Activities. Abbott may perform such further research and development activities on Abbott Compounds as Abbott deems appropriate in its sole discretion. Except for payments of royalties and milestone payments on Abbott Derivative Compounds pursuant to Article 6, Abbott shall have no obligations to ArQule with respect to Abbott Compounds hereunder.
ARTICLE 5
ARQULE COMPOUND RESEARCH AND DEVELOPMENT LICENSES
5.1 Delivery of ArQule Arrays. During the Array Transfer Period, ArQule shall deliver to Abbott * ArQule Arrays per Contract Year. ArQule may, at its option, also deliver to Abbott additional ArQule Arrays. ArQule shall select the ArQule Arrays to be delivered to Abbott hereunder and the ArQule Cole Compounds within each such ArQule Array, provided that each ArQule Core Compound shall appear only once in any ArQule Array delivered to Abbott hereunder. Except as otherwise agreed by Abbott, ArQule shall supply Abbott with a minimum quantity of * of each ArQule Compound in such ArQule Arrays or * percent ( * ) of the material synthesized by ArQule of each ArQule Compound in such ArQule Arrays, whichever is less. ArQule acknowledges that it is its intention to synthesize approximately * of each ArQule Core Compound, whenever ArQule determines that synthesis of such quantities of ArQule Core Compounds is chemically feasible and commercially reasonable. ArQule shall conduct the research and development activities described in this Section in a good scientific manner and in compliance with all applicable federal, state and local laws and regulations.
5.2 Screening of ArQule Compounds. During the Array Screening Period, Abbott shall have the right, either directly or through Abbott's Affiliates or third party contractors selected by Abbott, to perform such testing and analytical work as Abbott deems appropriate on ArQule Core Compounds received hereunder, provided that Abbott shall have the right to perform composition and structural analysis only after Abbott's receipt of confirmed chemical composition and structure and purity information pursuant to Section 5.3, and further provided that Abbott shall not perform significant derivitization work on ArQule Core Compounds until Abbott makes a Target Reservation for the ArQule Array containing such ArQule Core Compounds pursuant to Section 5.5. The parties agree that "significant derivitization work" shall mean any derivitization work beyond that which is reasonably necessary to allow Abbott to determine whether an ArQule Core Compound is sufficiently amenable to chemical modification to warrant the exercise of a Target Reservation by Abbott.
5.3 Identification of ArQule Compounds. Upon Abbott's written request at any time during the Array Screening Period, ArQule shall provide Abbott with the confirmed chemical composition and structure and purity information for any Active ArQule Compound in an ArQule Array upon presentation by Abbott of reasonably sufficient documentation of the biological activity for which Abbott is testing. Prior to revealing such documentation to ArQule, Abbott shall remove any reference to the type of biological activity detected and the assay used, and Abbott shall not identify in any other manner such biological activity or assay except in accordance with Section 5.4. Upon Abbott's written request, ArQule shall also provide Abbott with the confirmed chemical composition and structure and purity information for additional
* confidential treatment has been
requested for marked portions
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ArQule Compounds in the ArQule Array that contains the Active ArQule Compound, but only if such ArQule Compounds exhibit biological activity less than or equal to the Active ArQule Compound.
5.4 Additional Quantities of ArQule Compounds.
(a) ArQule Obligations. During the Array Transfer Period, ArQule
shall provide Abbott with reasonable additional quantities of
Active ArQule Compounds for which Abbott has received
confirmed chemical composition and structure and purity
information under Section 5.3. Such Active ArQule Compounds
shall be synthesized by ArQule in the course of the R & D
Program. Abbott may elect to obtain reasonable additional
quantities of Active ArQule Compounds from ArQule for up to
twelve (12) months after the expiration of the Array Transfer
Period upon written notice to ArQule which is received at
least ninety (90) days prior to such expiration. In this
event, Abbott shall pay ArQule the amount of *
Dollars * per ArQule FTE per year, up to a
maximum of * FTEs in four (4) equal quarterly
installments, with the first installment due upon the
expiration of the Array Transfer Period and each subsequent
installment due every three (3) months thereafter. ArQule
shall provide the Abbott-funded FTE scientists to supply
Abbott with reasonable quantities of Active ArQule Compounds,
as requested by Abbott. Abbott may discontinue this resupply
program upon ninety (90) days prior written notice to ArQule;
provided, however, that any payments previously received by
ArQule under this Section shall be nonrefundable.
(b) Suspension of ArQule Obligations. Notwithstanding anything to
the contrary set forth herein, if ArQule believes Abbott has
failed to pay ArQule all or any portion of research and
development funding payments due under Section 2.4 or FTE
funding payments due under Section 5.4(a), ArQule may, at its
option, provide Abbott with ten (10) business days prior
written notice stating the amount ArQule believes Abbott owes,
which amount shall be calculated using the amounts and per FTE
rates specified in Sections ...
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