Research & Option Agreement W/biogen

Exhibit 10.14


CuraGen Corporation has omitted from this Exhibit 10.14 portions of the Agreement for which CuraGen Corporation has requested confidential treatment from the Securities and Exchange commission. The portions of the Agreement for which confidential treatment has been requested are marked with X's in brackets and such confidential portions have been filed separately with the Securities and Exchange Commission.


RESEARCH AND OPTION AGREEMENT


This Research and Option Agreement ("Agreement") is made effective as of October 1, 1997 (the "Effective Date") by and between BIOGEN, INC., a Massachusetts corporation having its principal business office at 14 Cambridge Center, Cambridge, MA 02142 ("BIOGEN"), and CURAGEN CORPORATION, a Delaware corporation with its principal place of business at 555 Long Wharf Drive, 11th Floor, New Haven, Connecticut 06511 ("CURAGEN"). BIOGEN and CURAGEN are each hereafter referred to individually as a "Party" and together as the "Parties".


WHEREAS, BIOGEN desires to have access to CURAGEN's functional genomics technologies (including GeneScape(R), QEA/GeneCalling, MIM/PathCalling and all additional services provided by CURAGEN) and to have CURAGEN apply such technologies to certain BIOGEN Proprietary Material in order to expedite the discovery of information which may lead to the development of novel pharmaceutical products;


WHEREAS, BIOGEN and CURAGEN wish to initiate the performance of certain research by CURAGEN;


WHEREAS, BIOGEN wishes to obtain an option to evaluate and license the inventions obtained or made by CURAGEN in the performance of the research pursuant to this Agreement, as well as an option to evaluate and license certain other inventions of CURAGEN;


WHEREAS, BIOGEN will agree to make an equity investment in CURAGEN Common Stock itself, or through one of its Affiliates, in the amount of Five Million Dollars ($5,000,000), such investment to be made contemporaneously with the initial public offering of CURAGEN Common Stock;


[Confidential Treatment Requested]


WHEREAS, BIOGEN will itself, or through one of its Affiliates, also agree to loan CURAGEN up to Ten Million Dollars ($10,000,000) on the terms and conditions as set forth herein; and


WHEREAS, BIOGEN and CURAGEN therefore agree to undertake the foregoing, all under the terms and conditions set forth in this Agreement.


NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:


1. DEFINITIONS


Whenever used in the Agreement with an initial capital letter, the terms defined in this Section 1 shall have the meanings specified.


1.1 "Affiliate" shall mean any corporation, firm, limited liability company, partnership or other entity which directly or indirectly controls or is controlled by or is under common control with a Party to this Agreement. "Control" means ownership, directly or through one or more Affiliates, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interests in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby a Party controls or has the right to control the Board of Directors or equivalent governing body of a corporation or other entity.


1.2 [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]


1.3 [XXXXXXXXXXXXXXXXX] shall have the meaning set forth in Section 2.6.


1.4 "BIOGEN Proprietary Material" shall mean samples provided by BIOGEN to CURAGEN for the purposes of performing the Research Program and shall also be deemed to include the nucleic acids and other substances actually contained in such samples.


1.5 "Clone" shall mean a segment of DNA representing a whole or partial gene whose sequence or utility is determined from the use of one or more Data Sets.


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[Confidential Treatment Requested]


1.6 "CURAGEN Background Inventions" shall mean all patent rights and know-how of CURAGEN, other than those relating primarily to Inventions, which CURAGEN has the right to license as of the Effective Date or at any time during the Term hereof, and which would be infringed by the activities of BIOGEN permitted by this Agreement or by the development, manufacture, use, sale or importation of a Licensed Product; provided, however, that CURAGEN Background Inventions shall expressly exclude (i) any patent rights or know-how specifically relating to Clones or genes not licensed by BIOGEN pursuant to an executed License Agreement and (ii) any patent rights or know-how arising from any CURAGEN collaboration with a third party, except to the extent permitted thereby.


1.7 "CURAGEN Data" shall mean all information obtained by CURAGEN from the processing of specified CURAGEN samples, including QC data, expression data, sequence data and any other information obtained or generated by CURAGEN in the performance of a discrete CURAGEN Project outside the performance of the Research Program.


1.8 "CURAGEN Data Set" shall mean all CURAGEN Data resulting from a discrete CURAGEN Project.


1.9 "CURAGEN Project" shall mean a particular project undertaken by CURAGEN outside the Research Program to process and analyze a specified set of samples which do not contain BIOGEN Proprietary Material, and as to which CURAGEN is free to grant rights to BIOGEN hereunder.


1.10 "CURAGEN Project Invention" shall mean any discovery, invention, know-how or trade secret conceived or made by employees of CURAGEN in the performance of a CURAGEN Project that results in CURAGEN Data that becomes part of an Exclusive Data Set, that is based on, incorporates or makes material use of the corresponding CURAGEN Data.


1.11 "CURAGEN Proprietary Material" shall mean all substances made by CURAGEN in the performance of the Research Program other than mRNA pools extracted from BIOGEN Proprietary Material . CURAGEN Proprietary Material shall also mean all substances made by CURAGEN in the performance of CURAGEN Projects, including mRNA pools. CURAGEN Proprietary Materials shall include, without limitation, QEA fragments and materials derived or constructed from QEA fragments, including, without limitation, fragment and full length cDNA clones.


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1.12 "Data Set," which may be either a Project Data Set or a CURAGEN Data Set, shall mean all Project Data resulting from a discrete Research Project or all CURAGEN Data resulting from a discrete CURAGEN Project, respectively.


1.13 "Discovery Project" shall have the meaning set forth in Section 1.29.


1.14 [XXXXXXXXXXXXXXX] shall have the meaning set forth in Section 7.5.


1.15 "Exclusive Data Set" shall mean any Project Data Set during the corresponding Exclusive Evaluation Period as provided in Section 2.4 or any CURAGEN Data Set during the corresponding Exclusive Evaluation Period as provided in Section 2.5.2.


1.16 "Exclusive Evaluation Period" shall have the meaning set forth in Section 2.4 or 2.5.2.


1.17 "FTE" shall mean the equivalent of a full year of effort on a full time basis of a researcher possessing skills and experience necessary to carry out applicable tasks under the Research Program.


1.18 "Invention" shall mean either a CURAGEN Project Invention or a Research Project Invention.


1.19 [XXXXXXXXXXXXXX] shall have the meaning set forth in Section 2.1.3.


1.20 "License Agreement" shall mean a license agreement in the form of Appendix C hereto executed by the Parties upon exercise of any Option pursuant to Section 7.


1.21 "Optioned Clone" shall have the meaning set forth in Section 7.1.


1.22 "Option Period" shall have the meaning set forth in Section 7.3.


1.23 "Patent Rights" means the rights and interests in and to issued patents and pending patent applications in any country, including, but not limited to, all provisional applications, substitutions, continuations, continuations-in-part, divisions, and renewals, all letters patent granted thereon, and all reissues, reexaminations and extensions thereof, whether owned solely or jointly by a Party or licensed in by a Party, with the right to sublicense, now or in the future, wherein at least one claim of such patent right is to an Invention.


1.24 "Previously Committed Clone" shall mean any Clone (a) which is subject to a license or an option previously granted by CURAGEN to any third party, (b) which a third party has requested CURAGEN to full-length clone, or (c) of which a third party has commenced full-length cloning and notified CURAGEN thereof.


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[Confidential Treatment Requested]


1.25 "Project Data" shall mean all information obtained by CURAGEN from the processing of BIOGEN Proprietary Material in a particular Research Project, including QC data, expression data, sequence data and any other information obtained or generated by CURAGEN in the performance of each Research Project in the Research Program.


1.26 "Project Data Set" shall mean all Project Data resulting from a discrete Research Project.


1.27 "Research Committee" or "RC" shall have the meaning set forth in Section 2.2.1.


1.28 "Research Plan" shall mean the written description of the research to be performed by CURAGEN under this Agreement, as further described in Section 2.1.3. The Research Plan may specify one or more independent Research Projects.


1.29 "Research Project" shall mean (i) a particular project to process and analyze a specified set of samples in the Research Program, one of the primary purposes of which is the discovery of novel genes or novel utilities of genes (a "Discovery Project") or (ii) any other project mutually agreed to by the Parties. Each individual Research Project shall involve the analysis of no more than [XX] samples unless otherwise agreed by the Parties.


1.30 "Research Project Invention" shall mean any discovery, invention, know-how or trade secret conceived or made by employees of CURAGEN or BIOGEN or jointly by employees of both, (a) in the performance of a Research Project hereunder, or (b) in the course of evaluating or utilizing any Data Set, in each case that is based on, incorporates or makes material inventive use of the corresponding Project Data or CURAGEN Data.


1.31 "Research Program" shall mean the research program to be performed by CURAGEN under this Agreement as described in the Research Plan and amendments thereto.


1.32 "Research Term" shall have the meaning set forth in Section 2.3.1.


1.33 "Term" shall have the meaning set forth in Section 8.1.


1.34 "Territory" shall mean the world.


2. RESEARCH PROGRAM


2.1 Implementation of Research Program.
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[Confidential Treatment Requested]


2.1.1 Basic Provisions of Program.
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(a) The objective of the Research Program will be for CURAGEN to generate and deliver to BIOGEN Project Data Sets by performing Research Projects utilizing BIOGEN Proprietary Material. CURAGEN shall use commercially reasonable efforts to perform such tasks as are set forth in the Research Plan, including use of its functional genomics technologies (including GeneScape(R), QEA/GeneCalling, MIM/PathCalling and all additional services provided by CURAGEN) and the provision of such facilities and materials (other than BIOGEN Proprietary Material), equipment and consultants as it deems necessary to the achievement of such Research Plan and shall deliver each Project Data Set to BIOGEN using the GeneScape(R) database and software. In carrying out the Research Program, CURAGEN shall devote an average of at least [XXXXXXXX] FTEs per year to the Research Program over its five year duration (the "Staffing Level") unless BIOGEN and CURAGEN have agreed on a change in the Staffing Level as provided in (b) below.


(b) BIOGEN may request an increase in the Staffing Level of up to [XXX XXX] additional FTEs per year to be devoted to the Research Program, subject to the agreement of CURAGEN. CURAGEN will use commercially reasonable efforts to increase the staffing level if mutually agreed as promptly as practical. Once the Staffing Level is increased, it may not be decreased during the following [XXXXXXXXX] period without the consent of CURAGEN, which consent shall not be unreasonably withheld.


(c) BIOGEN shall have the right, at BIOGEN's expense, to have an independent certified public accountant review CURAGEN's accounting records for the purpose of verifying the allocation of the required number of FTE's to the Research Program.


2.1.2 Collaborative Efforts and Reports.
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(a) The Parties agree that the successful execution of the Research Program will require the collaborative use of both Parties' areas of expertise. The Parties shall keep the RC fully informed about the status of the portions of the Research Program they respectively perform. In particular, without limitation, each Party shall furnish to the RC quarterly written reports within thirty (30) days after the end of each quarterly period, describing the progress of its activities in reasonable detail, including (x) a summary of Project Data from ongoing Research Projects, (y) a summary of uses of Project Data and (z) a description of Project Data Sets from


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[Confidential Treatment Requested]


completed Research Projects. At any time, upon the reasonable request of BIOGEN, CURAGEN will provide an update of the status of Research Projects to BIOGEN.


(b) Scientists at CURAGEN and BIOGEN shall cooperate in the performance of the Research Program and, subject to any confidentiality obligations to third parties, shall exchange information and materials (including BIOGEN Proprietary Material) as necessary to carry out the Research Program, subject to the provisions of Section 4. Each Party will attempt to accommodate any reasonable request of the other Party to send or receive personnel for purposes of collaborating or exchanging information under the Research Program. Such visits and/or access will have defined purposes and be scheduled in advance. The requesting Party will bear the reasonable travel and lodging costs of any such personnel.


(c) CURAGEN will give written notice to BIOGEN and the RC upon completion of the Project Data Set from each Research Project. "Completion" of a Project Data Set shall occur upon generation of all QEA/GeneCalling data or MIM/PathCalling data from a Research Project as contemplated by the Research Plan.


(d) CURAGEN shall set up and maintain, throughout the Research Term, a secure partition of its GeneScape(R) database and software for the exclusive use of BIOGEN and CURAGEN for the purpose of identifying genes from Exclusive Data Sets, and shall provide online E-mail and telephone help during normal business hours in the use thereof to BIOGEN. CURAGEN and BIOGEN shall jointly set up and maintain a secure connection to said partition of the GeneScape(R) database and software in order to give BIOGEN on-line access thereto. Through such connection, BIOGEN shall have the right to utilize all features and functions of the GeneScape(R) database and software (including, without limitation, GeneTools(TM)) in connection with the Research Program.


(e) BIOGEN will also receive access to CURAGEN's QEA/GeneCalling and MIM/PathCalling subscription databases and to GeneTools(TM) pursuant to one or more subscription agreements to be executed by the Parties, with terms substantially as described in Appendix D hereto. Such subscriptions [XXXXXXXX
---------- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXX]


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[Confidential Treatment Requested]


[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] until the expiration of the Research Term. Such subscription agreements may be terminated by BIOGEN at any time, without affecting the Research Program, either in their entirety or with respect to any database at BIOGEN's sole discretion upon three (3) months prior written notice. BIOGEN shall have no rights to use the GeneScape(R) database and software except as expressly set forth herein or in an executed database subscription agreement.


2.1.3 Research Plans.
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The Research Plan for the first twelve months of the Research Program shall be agreed upon by the Parties within thirty (30) days of the Effective Date and shall include the initial Research Projects and plans to implement the installation of access to the GeneScape(R) database and software for BIOGEN. The initial Research Projects shall include a project on [XXXXXXXXXXXXXX XXXXXXXXXXXXXX] and a project on [XXXXXXXXXX] as further described in Section 2.6. Every [XXXXXXXXXXXXXX] during the Research Term [XXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXX] the Research Plan shall be updated by BIOGEN in consultation with CURAGEN to cover the next twelve months and shall be approved by the RC no later than thirty (30) days before the end of each semi-annual period. The Research Plan shall set forth specific Research Projects for the period covered by the Research Plan. The RC will consider adjustments in the Research Plan at any time upon the request of BIOGEN or CURAGEN. Notwithstanding the foregoing, no project shall become a Research Project without the express consent of both BIOGEN and CURAGEN; provided, however, that CURAGEN shall consent to any reasonable proposed Discovery Project which is not substantially similar to a project that is ongoing, planned, the subject of negotiation with a third party or subject to a prior commitment to a third party, and which would not violate a prior restriction under an agreement with a third party. The Parties shall negotiate in good faith the terms to apply generally to any Research Project that is not a Discovery Project, other than the [XXXXXXXXXX XXXXXXXX] which is covered by Section 2.6.


2.1.4 Exclusivity.
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(a) CURAGEN agrees that, during the conduct of a Research Project and for the duration of any subsequent Exclusive Evaluation Period, CURAGEN shall not undertake to perform a substantially similar research project with any third party.


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[Confidential Treatment Requested]


(b) CURAGEN agrees that during any Exclusive Evaluation Period, CURAGEN will not grant access to any Exclusive Data Set to any other party and that during any Option Period, CURAGEN shall not grant to any third party rights to any Optioned Clone. In addition, CURAGEN shall not, during any Exclusive Evaluation Period, grant a third party any exclusive rights to license a Clone contained in the corresponding Exclusive Data Set (i) which BIOGEN has requested CURAGEN to full-length clone or (ii) for which BIOGEN has commenced full-length cloning and notified CURAGEN thereof. Notwithstanding the provisions of Article 4 and except as provided in Section 2.6 hereof, upon the expiration of any Exclusive Evaluation Period for any Exclusive Data Set, CURAGEN shall have the right, at its sole option, to make such Data Set and reasonable descriptions of the data contained therein available to third parties or to put the Data Set and such descriptions in the subscription portion of the GeneScape(R) database. Nothing contained in this Agreement shall in any way restrict CURAGEN's right to perform research or collaborate with third parties and to grant to third parties the right to exploit the results of any such research or collaborations without restriction other than as set forth above or as expressly provided in an executed License Agreement. CURAGEN agrees that CURAGEN will not use and/or replicate any BIOGEN Proprietary Material for any purpose other than as provided herein.


(c) CURAGEN acknowledges that BIOGEN may, in the course of reviewing Data Sets, obtain general information not specifically relating to any Clone or to the utility thereof. BIOGEN shall be permitted to use any such general information that is non-proprietary to CURAGEN in the course of conducting its internal research programs, or as otherwise permitted herein, but for no other purpose.


(d) BIOGEN agrees that, until any such information is in the public domain, other than as a result of a disclosure by BIOGEN in violation of this Agreement, an executed subscription agreement or an executed License Agreement, BIOGEN will only utilize Project Data, CURAGEN Data, CURAGEN Proprietary Material, Inventions or Patent Rights as expressly provided herein, in an executed License Agreement or in an executed subscription agreement.


2.1.5 Research License. CURAGEN hereby grants to BIOGEN a non-exclusive
---------------- license under CURAGEN Background Inventions and CURAGEN's interest in any Inventions solely


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during the Term hereof and to the extent necessary to allow BIOGEN to perform its obligations under the Research Program and to exercise the rights granted herein.


2.1.6 Software License. Any access granted to the GeneScape(R) database
---------------- and software hereunder, or any components thereof, is granted according to the following terms:


The GeneScape(R) database, software and display screeens are protected by copyright, patent, trade secret and other intellectual property laws. CURAGEN hereby grants to BIOGEN and its employees a non-exclusive non-transferrable license to access the GeneScape(R) database and software solely for the purposes of and during the Term of this Agreement. BIOGEN shall access Project Data Sets and CURAGEN Data Sets only through the GeneScape(R) database and software provided by CURAGEN. BIOGEN shall not copy the GeneScape(R) database, software or display screens except as occurs during the normal course of CURAGEN-provided access. In particular, BIOGEN will not retain such normal copies for a time not reasonably related to CURAGEN-provided access. BIOGEN shall not reverse engineer, decompile, or disassemble the GeneScape(R) software or display screens. The GeneScape(R) database and software embody trade secrets of CURAGEN that are considered Confidential Information of CURAGEN and subject to the provisions of Article 6 hereof.


2.2 Research Committee.
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2.2.1 Establishment and Functions of RC.
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(a) CURAGEN and BIOGEN shall establish a "Research Committee" (the "RC"). The RC will be responsible for the planning and monitoring of the Research Program. In particular, the activities of the RC shall include reviewing progress in the Research Program and recommending necessary adjustments to the Research Program, including any Research Project substitutions deemed desirable based on results and on BIOGEN's commercial interest, as the research and development progresses.


(b) In planning and monitoring the Research Program, the RC shall assign tasks and responsibilities taking into account each Party's respective specific capabilities and expertise in order in particular to avoid duplication and enhance efficiency and synergies.


2.2.2 RC Membership.
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CURAGEN and BIOGEN each shall appoint, in their sole discretion, three members to the RC, which shall include a Co-Chair to be designated by BIOGEN and a Co-Chair to be


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designated by CURAGEN. Substitutes or alternates for the Co-Chairs or other RC members may be appointed at any time by notice in writing to the other Party. The Parties may mutually agree to change the size of the RC as long as there shall be an equal number of representatives of each Party on the RC. The initial Co-Chairs and other RC members shall be designated by the Parties upon execution of this Agreement. CURAGEN shall appoint a Project Coordinator, who shall be reasonably satisfactory to BIOGEN, to serve as the principal liaison with BIOGEN for the Research Program. Such Project Coordinator will be one of CURAGEN's members of the RC.


2.2.3 Meetings.
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The RC shall meet at least quarterly, with such meetings to be held, alternately, in New Haven, Connecticut, and Cambridge, Massachusetts unless the Parties agree otherwise. Any additional meetings shall be held at places and on dates selected by the Co-Chairs of the RC. In addition, the RC may act without a formal meeting by a written memorandum signed by the Co-Chairs of the RC. Whenever any action by the RC is called for hereunder during a time period in which the RC is not scheduled to meet, the Co-Chairs of the RC shall cause the RC to take the action in the requested time period by calling a special meeting or by action without a meeting. Subject to the obligations set forth in Section 4, representatives of each Party or of its Affiliates, in addition to the members of the RC, may attend RC meetings at the invitation of either Party with the prior approval of the other Party, which shall not be unreasonably withheld.


2.2.4 Minutes.
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The RC shall keep accurate minutes of its deliberations which record all proposed decisions and all actions recommended or taken. Drafts of the minutes shall be delivered to the Co-Chairs of the RC within twenty (20) days after the meeting. The Party hosting the meeting shall be responsible for the preparation and circulation of the draft minutes. Draft minutes shall be edited by the Co-Chairs and shall be issued in final form only with their approval and agreement as evidenced by their signatures on the minutes.


2.2.5 Quorum; Voting; Decisions.
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At each RC meeting, at least two (2) member(s) appointed by each Party present in person or by telephone shall constitute a quorum and decisions shall be made by majority vote. Each RC member shall have one vote on all matters before the RC, provided that the member or members of each Party present at an RC meeting shall have the authority to cast the votes of any


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of such Party's members on the RC who are absent from the meeting. Notwithstanding the foregoing, the objective of the Parties to this Agreement is that decisions of the RC shall be made by consensus. However, except as otherwise set forth herein, in the event that the RC is unable to resolve any matter before it as set forth above, such matter shall be resolved in good faith by BIOGEN. Notwithstanding the foregoing, no project shall become a Research Project without the express consent of both BIOGEN and CURAGEN; provided, however, that CURAGEN shall consent to any reasonable proposed Discovery Project which is not substantially similar to a project that is ongoing, planned, the subject of negotiation with a third party or subject to a prior commitment to a third party, and which would not violate a prior restriction under an agreement with a third party.


2.2.6 Expenses.
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