EXHIBIT 10.24
EXECUTION COPY
METABOLIC DISORDER COLLABORATION AGREEMENT
By and Between
BAYER CORPORATION
and
CURAGEN CORPORATION.
Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS................................................................................ 1 -----------------------
Section 1.1 Definitions................................................................. 1
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Section 1.2 Additional Definitions...................................................... 13
----------- ---------------------- ARTICLE II METABOLIC PROGRAM; RESEARCH PLAN.......................................................... 14 -------------------------------------------
Section 2.1 Research Plan............................................................... 14
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Section 2.2 Metabolic Program - General................................................. 14
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Section 2.3 Technology Access........................................................... 16
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Section 2.4 Management of Metabolic Program............................................. 16
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Section 2.5 Qualified Target Production Phase........................................... 19
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Section 2.6 Target Screening Phase...................................................... 21
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Section 2.7 Strategic Project Phase..................................................... 22
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Section 2.8 Pre-Clinical Development Phase.............................................. 22
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Section 2.9 Clinical Development Phase.................................................. 23
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Section 2.10 Commercialization Phase..................................................... 23
------------ ----------------------- ARTICLE III BAYER AND CURAGEN RIGHTS AND OBLIGATIONS................................................. 23 -----------------------------------------------------
Section 3.1 License Grant with Respect to CuraGen Know-How and CuraGen Patent Rights.... 23
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Section 3.2 License Grant with Respect to Bayer Know-How and Bayer Patent Rights........ 24
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Section 3.3 Use of Configured Assays.................................................... 24
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Section 3.4 Retained Rights; Ownership.................................................. 24
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Section 3.5 CuraGen Co-Promotion Rights................................................. 24
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Section 3.6 Ownership Rights............................................................ 25
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Section 3.7 CuraGen Reversionary Rights................................................. 25
----------- --------------------------- ARTICLE IV FINANCIAL PROVISIONS...................................................................... 26 -------------------------------
Section 4.1 Costs of Metabolic Program.................................................. 26
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Section 4.2 Royalty Payments; Operating Income.......................................... 28
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Section 4.3 Income Statement Reports.................................................... 31
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Section 4.4 Royalty Reports............................................................. 32
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Section 4.5 Accounting.................................................................. 32
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Section 4.6 Currency and Method of Payments............................................. 33
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Section 4.7 Tax Withholding............................................................. 33
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Section 4.8 Blocked Payments............................................................ 33
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Section 4.9 Compassionate Use........................................................... 33
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Section 4.10 Accounting Terms............................................................ 33
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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
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ARTICLE V INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS............................ 34 -------------------------------------------------------------------------
Section 5.1 Ownership................................................................... 34
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Section 5.2 Prosecution and Maintenance of Patent Rights................................ 34
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Section 5.3 Cooperation................................................................. 35
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Section 5.4 Third Party Infringement.................................................... 35
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Section 5.5 Third Party Intellectual Property........................................... 36
----------- --------------------------------- ARTICLE VI CONFIDENTIALITY........................................................................... 37 --------------------------
Section 6.1 Confidential Information.................................................... 37
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Section 6.2 Employee and Advisor Obligations............................................ 37
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Section 6.3 Term........................................................................ 38
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Section 6.4 Publications................................................................ 38
----------- ------------ ARTICLE VII REPRESENTATIONS AND WARRANTIES........................................................... 38 ------------------------------------------
Section 7.1 Due Organization............................................................ 38
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Section 7.2 Consents.................................................................... 38
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Section 7.3 Execution, Delivery and Performance......................................... 38
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Section 7.4 Legal, Valid and Binding Obligation......................................... 39
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Section 7.5 No Conflict................................................................. 39
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Section 7.6 Employee Obligations........................................................ 39
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Section 7.7 CuraGen Intellectual Property............................................... 39
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Section 7.8 Bayer Intellectual Property................................................. 41
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Section 7.9 Contracts................................................................... 42
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Section 7.10 No Material Admissions...................................................... 42
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Section 7.11 No Warranties............................................................... 42
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Section 7.12 Survival.................................................................... 42
------------ -------- ARTICLE VIII COVENANTS............................................................................... 43 -----------------------
Section 8.1 No New Restrictions - CuraGen............................................... 43
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Section 8.2 Exclusivity - CuraGen....................................................... 43
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Section 8.3 No Restrictions on Screening - Bayer........................................ 43
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Section 8.4 Partnership for Tax Purposes................................................ 43
----------- ---------------------------- ARTICLE IX TERM AND TERMINATION...................................................................... 43 -------------------------------
Section 9.1 Term of the Agreement....................................................... 43
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Section 9.2 Termination For Material Breach............................................. 44
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Section 9.3 Termination Upon Change of Control.......................................... 44
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Section 9.4 No Effectiveness Upon HSR Denial or Termination of Stock Purchase Agreement. 44
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Section 9.5 Effect of Termination....................................................... 44
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Section 9.6 Survival.................................................................... 46
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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
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ARTICLE X DISPUTE RESOLUTION......................................................................... 46 ----------------------------
Section 10.1 General..................................................................... 46
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Section 10.2 Independent Experts......................................................... 46
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Section 10.3 SUBMISSION TO JURISDICTION; SELECTION OF A FORUM; WAIVER OF TRIAL BY JURY... 46
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Section 10.4 Limitations of Remedies; Remedies Cumulative................................ 47
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Section 10.5 Specific Performance........................................................ 47
------------ -------------------- ARTICLE XI MISCELLANEOUS PROVISIONS.................................................................. 48 -----------------------------------
Section 11.1 Product Liability Indemnification........................................... 48
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Section 11.2 Section 365(n) of the Bankruptcy Code....................................... 48
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Section 11.3 Governing Law............................................................... 49
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Section 11.4 Assignment.................................................................. 49
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Section 11.5 Amendments.................................................................. 49
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Section 11.6 Notices..................................................................... 49
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Section 11.7 Exports..................................................................... 50
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Section 11.8 Force Majeure............................................................... 50
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Section 11.9 Public Announcements........................................................ 51
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Section 11.10 Independent Contractors..................................................... 51
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Section 11.11 No Strict Construction...................................................... 51
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Section 11.12 Headings.................................................................... 51
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Section 11.13 No Implied Waivers; Rights Cumulative....................................... 52
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Section 11.14 Severability................................................................ 52
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Section 11.15 Execution in Counterparts................................................... 52
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Section 11.16 HSR Filing.................................................................. 52
------------- ---------- EXHIBITS --------
Exhibit A Bayer's Development Manual Exhibit B Bayer's procedures for the Global Development Project Team Exhibit C Research Plan Exhibit D Bayer's Strategic Project Manual Exhibit E CuraGen's technology access licenses
Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
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METABOLIC DISORDER COLLABORATION AGREEMENT
THIS METABOLIC DISORDER COLLABORATION AGREEMENT (the "Agreement"), dated this 12th day of January, 2001 (the "Execution Date"), is by and between Bayer Corporation, a corporation organized and existing under the laws of the State of Indiana and having an office at 400 Morgan Lane, West Haven, Connecticut 06516- 4175 ("Bayer"), which is a wholly-owned subsidiary of Bayer AG, a corporation organized and existing under the laws of Germany and having its principal office at D 51368 Leverkusen, Germany ("Bayer AG"), and CuraGen Corporation, a corporation organized and existing under the laws of the State of Delaware and having its principal office at 555 Long Wharf Drive, 11th floor, New Haven, Connecticut 06511 ("CuraGen").
INTRODUCTION
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1. CuraGen is engaged in the business of target discovery.
2. Bayer is in the business of discovering, developing and marketing pharmaceuticals.
3. Bayer AG and CuraGen are parties to that certain Pharmacogenomics Agreement ("Pharmacogenomics Agreement") of even date herewith to collaborate on toxicogenomic and pharmacogenomic services for use in (a) the identification of gene-based toxicity markers, development and operation of the toxicity assays, the generation and maintenance of databases related to the impact of small molecules on toxicity markers and toxicity marker association with specific histopathologies, prediction of relative toxicity of Compounds; and (b) gene expression profiling of animal and human cells in the presence of Compounds to assess and predict their pharmacological effectiveness.
4. Bayer AG and CuraGen are parties to that certain Stock Purchase Agreement of even date herewith wherein Bayer AG has agreed to make an $85 million dollar equity investment in CuraGen.
5. Bayer and CuraGen are interested in collaborating in the discovery and development of targets and assays to identify, develop and commercialize small molecule drugs for the treatment of metabolic disorders.
NOW, THEREFORE, CuraGen and Bayer agree as follows:
Article I
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Definitions
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Section 1.1 Definitions.
----------- When used in this Agreement, each of the following terms shall have the meanings set forth in this Section 1.1:
Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
"Affiliate" means any corporation, company, partnership, joint venture and/or firm which controls, is controlled by, comes into control by during the Term, or is under common control with a Party. For purposes of this definition, "control" shall mean (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non- corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities.
"Annual Sales Volume" means total worldwide Net Sales of a Metabolic Program Drug during a Contract Year.
"Bayer Know-How" means Know-How owned or otherwise controlled by Bayer or its Affiliates, and in which Bayer or an Affiliate has a licensable or sublicensable interest and which Bayer or an Affiliate can license to CuraGen, relating to (a) Bayer's generic toxicogenomic database; (b) Bayer's drug discovery programs and (c) Bayer's drug development program.
"Bayer Patent Rights" means a Patent Right owned or otherwise controlled by Bayer or an Affiliate (singly or jointly with CuraGen) in which Bayer or an Affiliate has a licensable or sublicensable interest and which Bayer or an Affiliate can license to CuraGen, covering an invention that is part of the Bayer Know-How.
"CFA" or "Collaborative Focus Area" means metabolic disorders, primarily obesity and Type 2 diabetes.
"Change of Control" means (a) a merger or consolidation of a Party which results in the voting securities of such Party outstanding immediately prior thereto ceasing to represent at least forty percent (40%) of the combined voting power of the surviving entity immediately after such merger or consolidation; (b) the sale of all or substantially all of the assets of a Party (including a sale by Bayer or Bayer AG of all or substantially all of the assets consisting of Bayer's metabolic business); or (c) any "person", as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), together with any of such persons "affiliates" or "associates", as such terms are used in the Exchange Act, becoming the beneficial owner of forty percent (40%) or more of the combined voting power of the outstanding securities of a Party (other than such Party, any trustee or other fiduciary holding securities under an employee benefit plan of such Party or any corporation owned directly or indirectly by the stockholders of such Party in substantially the same proportion as their ownership of stock of such Party). For purposes of this definition only, "Party" shall mean either CuraGen or Bayer AG.
"Claim" means either: (a) a claim of an issued and unexpired patent which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or (b) a claim of a pending patent application which claim was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed without the
Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
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possibility of appeal or refiling of the application; provided, however, that such patent application shall not have been pending for more than five (5) years unless it is the subject of an interference or its prosecution has been stayed or suspended for reasons that are beyond the control of the owner of the patent application containing such claim.
"Clinical Development Phase" means Phase I, Phase II, Phase III, NDA Phase and Registration Phase.
"Combination Product" means any pharmaceutical product which comprises the Metabolic Program Drug and other compounds having independent therapeutic activity.
"Commercialization Phase" means the phase subsequent to a Development Compound's initial NDA Approval.
"Compound" means a compound which interacts with a Qualified Target.
"Confidential Information" means all materials, Know-How or other information, including, without limitation, proprietary information and materials (whether or not patentable) regarding a Party's technology, products, business information or objectives, which is designated as confidential in writing by the disclosing Party, whether by letter or by the use of an appropriate stamp or legend, prior to or at the time any such material, trade secret or other information is disclosed by the disclosing Party to the other Party. Notwithstanding the foregoing to the contrary, materials, Know-How or other information which is orally, electronically or visually disclosed by a Party, or is disclosed in writing without an appropriate letter, stamp or legend, shall constitute Confidential Information of a Party (a) if the disclosing Party, within thirty (30) days after such disclosure, delivers to the other Party a written document or documents describing the materials, Know-How or other information and referencing the place and date of such oral, visual, electronic or written disclosure and the names of the persons to whom such disclosure was made, or (b) such information is of the type that is customarily considered to be confidential information by persons engaged in activities that are substantially similar to the activities being engaged in by the Parties pursuant to this Agreement.
"Configured Assay" means an assay embodying or based upon a QT that [____________________________________________], as further defined in the Research Plan.
"Contract Quarter" means the period beginning on the Effective Date and ending on March 31, 2001, and each succeeding calendar quarter thereafter during the Term.
"Contract Year" means the period beginning on the Effective Date and ending on December 31, 2001 ("Contract Year 1"), and each succeeding twelve (12) month period thereafter during the Term (referred to as the "Contract Year 2", "Contract Year 3", etc.).
"Cost of Goods Sold" means the costs which are incurred by a Party or its Affiliates attributable to the manufacture of a Metabolic Program Drug determined in a manner consistent with the Commercialization Annual Budget prepared by Bayer. Cost of Goods Sold shall exclude Development Costs, Marketing Costs and Selling Costs.
Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential Investment under Rule 406 of the Securities Act.
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"Cost of Net Capital Invested" means the Net Capital Invested calculated at the end of a Contract Quarter (i) divided by four (4) and (ii) multiplied by [_________________________________].
"CuraGen Know-How" means Know-How owned or otherwise controlled by CuraGen or an Affiliate, and in which CuraGen has a licensable or sublicensable interest and which CuraGen or an Affiliate can license to Bayer, relating to (a) a QT, (b) the use of a QT to discover and develop Metabolic Program Drugs, and (c) the treatment of diseases and/or conditions with Metabolic Program Drugs that interact with a QT.
"CuraGen Patent Rights" means a Patent Right owned or otherwise controlled by CuraGen or an Affiliate (singly or jointly with Bayer), and in which CuraGen or an Affiliate has a licensable or sublicensable interest, covering an invention that is part of the CuraGen Know-How.
"CuraTools" means the suite of bioinformatics algorithms available in GeneScape for genomic analysis.
"Designated Scientific Issue" means the following issues: whether (a) a Target Candidate has met the criteria to qualify as a QT, including, but not limited to, [_________________________________]; and (b) a QT is [____________________]. Notwithstanding the foregoing, it is hereby agreed that Designated Scientific Issues shall not include any matters explicitly left to the discretion, consent or approval of Bayer under this Agreement.
"Development Candidate" means a Compound designated by Bayer [_____________________].
"Development Compound" means a Compound which is in the Pre-Clinical Development Phase or Clinical Development Phase.
"Development Costs" means the costs incurred by a Party (or for its account by an Affiliate or a Third Party) which are generally consistent with the Development Annual Budget prepared by Bayer and are specifically attributable to the development of a Development Compound. Development Costs shall include, without limitation, (a) the cost of pre-clinical and clinical studies, [_______________________________________________________________], (b) all direct labor, benefits and payroll taxes and direct operating costs and supplies (i.e. reagents) as well as appropriate allocations of supervisory, bioinformat ...
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