1
Certain confidential portions of this Exhibit were omitted by means of blackout
of the text (the "▇▇▇▇"). This Exhibit has been filed separately with the
Secretary of the Commission without the ▇▇▇▇ pursuant to the Company's
Application Requesting Confidential Treatment under Rule 406 under the
Securities Act.
EXHIBIT 10.24
COLLABORATION AGREEMENT
BETWEEN
ALLELIX BIOPHARMACEUTICALS INC.
AND
AURORA BIOSCIENCES CORPORATION
2
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2. SCREEN DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Collaboration Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1.1 Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1.2 Membership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1.3 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1.4 CC Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Screen Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2.1 Screen Selection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2.2 Screen Development Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2.3 Screen Development Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.2.4 Screen Validation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3 Payments for Screen Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3.1 Funding for Two (2) Screens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3.2 Funding for Additional Screens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 3. SCREENING PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 Screening Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1.1 Screening by Aurora. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1.2 Compound Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1.3 Screening Program Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Screening Supplies for Lead Optimization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.1 Supplies from Aurora. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.2 Shipping. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.3 Limited Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 Screening Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.3.1 Base Screening Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4. DEVELOPMENT AND COMMERCIALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 5. LICENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 License to Allelix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 License to Aurora. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 No Implied Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Covenant Not to Assert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6. MILESTONES AND ROYALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.1 Milestone Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.2 Royalties to Aurora. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2.1 Sales by Licensees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2.2 Sales by Allelix or its Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2.3 Trade Secret Royalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2.4 Royalty Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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JANUARY 21, 1996
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6.2.5 Other Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 7. PAYMENTS; BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 Royalty Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Screen Development and Screening Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.3 Payment Method. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.4 Currency Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.5 Records; Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.6 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.7 Refunds or Credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 8. INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1 Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1.1 Sole Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1.2 Joint Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1.3 U.S. Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1.4 Retained Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2 Patent Filing and Prosecution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2.1 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2.2 Failure to Prosecute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.3 Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.4 Defense of Infringement Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.4.1 Claims Relating to Agreement Compounds and Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.4.2 Claims Relating to Aurora Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 9. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.1 Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.2 Permitted Use and Disclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.3 Nondisclosure of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 10. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Allelix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 Aurora. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.3 Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 11. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 Allelix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.2 Aurora. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 12. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.1 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.2 Termination for Cause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.3 Termination for Insolvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.4 Permissive Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.5 Effect of Breach or Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.5.1 Accrued Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.5.2 Return of Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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12.5.3 Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.6 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 13. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.1 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.2 Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.2.1 Mediation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.2.2 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.3 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.4 Independent Contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.5 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.8 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.9 Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.10 Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.11 No Consequential Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.12 Complete Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.13 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ALLELIX.AURORA COLLABORATION AGREEMENT
JANUARY 21, 1996
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COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement"), effective as of January 21,
1997, (the "Effective Date"), is made by and between Aurora Biosciences
Corporation, a Delaware corporation, having a principal place of business at
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
("Aurora"), and Allelix Biopharmaceuticals Inc., a corporation organized under
the laws of Canada and having a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Allelix").
BACKGROUND
WHEREAS, Aurora designs, develops, and manufactures proprietary fluorescent
bioassay technologies and chemistries used therein for screening systems,
useful for the acceleration of novel drug discovery and to increase the
productivity of drug discovery programs;
WHEREAS, Aurora and Allelix desire to enter into a collaborative research and
development program to develop screens against agreed targets, and use such
screens to identify compounds having activity against one or more of such
targets;
WHEREAS, Allelix will then proceed with a medicinal chemistry program to
develop drug candidates from which pharmaceutical products may be derived, all
in accordance with the terms and conditions set forth below.
NOW, THEREFORE, Aurora and Allelix agree as follows:
ARTICLE 1. DEFINITIONS
The following terms shall have the meanings provided below when used herein:
1.1 "Affiliate" shall mean a person or entity, other than an
entity jointly owned or controlled by the parties, that directly or indirectly
controls, is controlled by, or is under common control with the person or
entity specified. For purposes of this definition, "control" means the direct
or indirect ownership of greater than fifty percent (50%) of the outstanding
shares or other voting rights of the specified entity to elect directors or
other management authority, or if not meeting the preceding, that level of
control which is the maximum ownership right permitted in the jurisdiction
where such entity exists.
1.2 "Agency" shall mean the U.S. Food and Drug Administration
("FDA") or its successor, or an agency of any other government of another
country having jurisdiction over the development, manufacturing, and/or
marketing of pharmaceutical products.
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1.3 "Agreement Compound" shall mean any Hit or Derivative.
1.4 "Allelix Technology" shall mean Allelix Patent Rights and
Allelix Know-How.
1.5 "Allelix Patent Rights" shall mean Patent Rights owned,
licensed or Controlled by Allelix (including its Affliates, Licensors or its
Licensees) which relate to Compounds, Agreement Compounds, Aurora Technology,
Derivatives, Hits, Products or Screens.
1.6 "Allelix Know-How" shall mean ***
1.7 "Aurora Technology" shall mean Aurora Reporter Patents and
Aurora Reporter Know-How.
1.8 "Aurora Reporter Patents" shall mean Patent Rights owned or
Controlled by Aurora relating to fluorescent reporters.
1.9 "Aurora Reporter Know-How" shall mean ***
1.10 "Collaboration Committee" or "CC" shall have the meaning set
forth in Section 2.1.
1.11 "Collaboration Period" shall begin on the Effective Date and
last until the third anniversary of the Effective Date, and can extended by
mutual agreement of the parties.
1.12 "Compound" shall mean ***
1.13 "Confidential Information" shall mean information or material
disclosed hereunder by one party (the "Disclosing Party") to the other party
(the "Receiving Party") and as further defined in Section 9.1.
1.14 "Control" or "Controlled" shall mean possession by a party or
its Affiliates of the ability to grant a license or sublicense in accordance
with the terms of this Agreement, and without violating the terms of any
agreement by such party with a Third Party.
ALLELIX.AURORA COLLABORATION AGREEMENT
JANUARY 21, 1996
*** CONFIDENTIAL TREAMENT REQUESTED
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1.15 "CPI" shall mean the Consumer Price Index, All Urban
Consumers, as published by the U.S. Bureau of Labor Statistics.
1.16 "Derivative" shall mean *** . It is understood that
"Derivative" shall include any compound derived from another Derivative.
1.17 "Development Candidate" shall mean ***
1.18 "Full Time Equivalent" or "FTE" shall mean the full time
equivalent of one (1) Aurora researcher, based on a minimum of one thousand
seven hundred sixty (1,760) hours per year.
1.19 "Hit" shall mean ***
1.20 "Joint Technology" shall have the meaning set forth in Section
8.1.2.
1.21 "Licensee" shall mean any Third Party (other than an Affiliate
of Allelix) to whom Allelix grants a license, sublicense or other right to
manufacture, use, sell, offer for sale, distribute and/or import one or more
Products or Agreement Compounds.
1.22 "Licensor" shall mean any Third Party that grants Allelix a
license, sublicense or other right to manufacture, use, sell, offer for sale,
distribute and/or import one or more Products or Compounds.
1.23 "Manufacturing Cost" shall mean ***
1.24 "NDA" shall mean a New Drug Application ("NDA") or Product
License Application
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JANUARY 21, 1996
***CONFIDENTIAL TREATMENT REQUESTED
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("PLA"), as defined in the U.S. Food, Drug, and Cosmetic Act and the
regulations promulgated thereunder, or any equivalent foreign application.
1.25 "Net Royalty Revenue" shall mean all consideration, including
without limitation, royalties, profit sharing, or other payments of any nature,
whether such consideration is in cash, payment in kind, exchange or another
form, received by Allelix, from a Third Party, Licensor, or Licensee in respect
of the sale or other distribution of any Product.
1.26 "Net Sales" shall mean ***
Net Sales shall also include ***
1.27 "Patent Rights" shall mean all U.S. or foreign jurisdiction
(including the European Patent Convention) patent applications, including any
regular, or provisional applications and any continuation (in whole or in
part), division, or substitute thereof, or any equivalent of any of the
foregoing, and any patent issuing thereon, including any reissue,
re-examination, or extension thereof.
1.28 "Phase I," "Phase II," and "Phase III" shall mean Phase I,
Phase II, or Phase III clinical trials, respectively, in each case as
customarily related to applicable FDA Investigational New Drug ("IND")
regulations, or any corresponding foreign statutes, rules, or regulations.
1.29 "Product" shall mean ***
1.30 "Screen" shall mean ***
1.31 "Screen Development Plan" shall have the meaning set forth
in Section 2.2.2.
1.31 "Screening Program" shall have the meaning set forth in
Section 3.1.1.
ALLELIX.AURORA COLLABORATION AGREEMENT
JANUARY 21, 1996
*** CONFIDENTIAL TREATMENT REQUESTED
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1.32 "Screening Supplies" shall have the meaning set forth in
Section 3.2.1.
1.33 "Term" shall have the meaning set forth in Section 12.1.
1.34 "Third Party" shall mean any person or entity other than (i)
Aurora and any of its Affiliates, and (ii) Allelix and any of its Affiliates.
1.35 "Valid Claim" shall mean (a) an issued claim under an issued
patent within the Patent Rights, which has not (i) expired or been canceled,
(ii) been declared invalid by an unreversed and unappealable decision of a
court or other appropriate body of competent jurisdiction, (iii) been admitted
to be invalid or unenforceable through reissue, disclaimer or otherwise, and/or
(iv) been abandoned; or (b) a claim included in a pending patent application
within the Patent Rights that is being actively prosecuted in accordance with
this Agreement and which has not been (i) canceled, (ii) withdrawn from
consideration, (iii) finally determined to be unallowable by the applicable
governmental authority for whatever reason (and from which no appeal is or can
be taken), and/or (iv) abandoned.
1.36 "Validation Criteria" shall mean criteria established pursuant
to Section 2.2.2 for a particular Screen for the assessment of whether such
Screen is suitable for specifically identifying Hits.
ARTICLE 2. SCREEN DEVELOPMENT
2.1 Collaboration Committee.
2.1.1 Responsibilities.
Within thirty (30) days after the Effective Date, Aurora and
Allelix shall establish a committee (the "Collaboration
Committee" or "CC"), to review and coordinate the design and
development of Screens pursuant to Article 2 and the conduct
of Screening Programs pursuant to Article 3.
2.1.2 Membership.
The CC shall be comprised of two (2) representatives from
Allelix and two (2) representatives from Aurora. Each party
may select and replace its CC representatives at any time,
with written notice to the other party. Each party shall each
appoint one of its CC representatives to be responsible for
coordinating
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communications between the parties.
2.1.3 Meetings.
During the Collaboration Period, the CC shall meet at least
quarterly, or more often as mutually agreed, in person, by
telephone or televideo conference. Each party shall pay its
own expenses incurred in connection with participation at CC
meetings. With the consent of the parties, other
representatives of Allelix and/or Aurora may attend CC
meetings as nonvoting observers. On an alternating basis, one
party shall promptly prepare and deliver to the members of the
CC minutes in respect thereof, for review and approval by both
parties.
2.1.4 CC Decisions.
Decisions of the CC shall be made by simple majority approval.
In the event that approval is not obtained within the CC, the
undecided matter will be referred to a Business Development
officer of each party, who shall promptly meet in person or by
telephone or by televideo conference to endeavor to resolve
the dispute. In the event such individuals are unable to
resolve such dispute within thirty (30) days, the matter shall
be referred to the Chief Executive Officers or equivalent of
the parties, who shall promptly meet in person or by televideo
conference to endeavor to resolve the dispute. If such
officers are unable to resolve the dispute in a timely manner,
at the request of either party, it shall be settled by binding
arbitration pursuant to Section 13.2 below, or as otherwise
mutually agreed in writing.
2.2 Screen Development.
2.2.1 Screen Selection.
(i) Target Proposals. Within thirty (30) days of
the Effective Date, Allelix will propose in
writing to Aurora at least one molecular
target for a Screen. During each year of the
Collaboration Period, Allelix will propose in
writing to Aurora additional molecular
targets for a total of ***
Screens per year and possibly ***
Screens per year if expanded pursuant to
Section 2.2.1 (ii). For each proposed
molecular target, Allelix will provide Aurora
with a written proposal describing such
target, and a listing of all Patent Rights
identified by Allelix using its reasonable
efforts, relating to such target. Within
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thirty (30) days of receiving such
information, and further information as
Aurora may reasonably request regarding a
proposed molecular target, Aurora shall
notify Allelix in writing whether Aurora
reasonably believes that the development of a
Screen based on the proposed molecular target
is consistent with Aurora's Third Party
obligations and if it is legally feasible
(e.g., infringement of Third Party patent
rights).
(ii) Number of Screens. Each year, during the
Collaboration Period, Aurora shall use
reasonable efforts to develop *** ) Screens
for Allelix, pursuant to the terms and
conditions herein. During the Collaboration
Period, Allelix may, with notice, request
that *** ) Screens be developed by
Aurora per year pursuant to this Agreement,
and with the agreement of the parties Aurora
shall develop such additional Screens.
2.2.2 Screen Development Plans.
(i) Within thirty (30) days of the date of
notification by Aurora to Allelix that a
molecular target is acceptable to Aurora in
accordance with Section 2.2.1 (i), the CC
will meet to review whether the CC reasonably
believes that it is financially and/or
technically feasible to develop a Screen
based on the proposed molecular target. If
the CC determines that it is not feasible to
develop a Screen based on such proposed
target, it shall notify Allelix in writing
thereof, and in such case Aurora shall have
no obligation to develop a Screen based on
such proposed target. If the CC determines
that it is feasible to develop a Screen based
on such proposed target, the CC will develop
a written research and development program,
and schedule for the Screen (in each case, a
"Screen Development Plan"). Each Screen
Development Plan shall also contain the
validation criteria ("Validation Criteria")
and the Hit rate criteria for each Screen.
(ii) Promptly after development of a Screen
Development Plan, the parties will
collaborate and use reasonable efforts to
develop and validate the Screen relating
thereto within the schedule provided in the
Screen Development Plan. Each party agrees
to conduct its respective activities in a
prudent and skillful manner.
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2.2.3 Screen Development Reports.
During the course of the development of each Screen,
individuals from Allelix and Aurora, to be appointed by the
CC, will discuss and review monthly, if not more frequently,
the progress of and any issues relating to the development of
each Screen. During the Collaboration Period, the CC will
review and, if necessary, prepare quarterly reports for each
Screen in progress at that time. Each progress report shall
provide a written update of work performed, results achieved
in respect of the Screen development activities, and any other
information desired by the CC.
2.2.4 Screen Validation.
When Aurora completes the development of a Screen which meets
the applicable Validation Criteria, it shall provide the CC
with a written report describing the Screen and the data
demonstrating compliance with the Screen Development Plan and
applicable Validation Criteria and Aurora will submit to
Allelix an invoice for *** ). Within thirty (30) days of
receipt of such invoice, provided that Aurora has satisfied its
obligations under this Section 2.2, Allelix will pay Aurora
*** ).
2.3 Payments for Screen Development.
2.3.1 Funding for Two (2) Screens.
In consideration for Aurora's development of *** Screens each
year during the Collaboration Period, Allelix shall pay to
Aurora *** , in *** installments. The first payment shall
be made on the Effective Date, and subsequent payments shall be
paid to Aurora no later than *** to which such payment
pertains.
2.3.2 Funding for Additional Screens.
If Aurora determines that the expenses which would be incurred
by Aurora with respect to the development of *** ) or more
Screens in any year in the Collaboration Period would exceed
*** ), it shall notify Allelix, and in such event the parties
shall in good faith determine the amount of additional funding
to be provided to Aurora by Allelix for the applicable Screen
development activities. Such additional funding shall be
calculated based on *** and ***
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*** Such amount shall be ***
ARTICLE 3. SCREENING PROGRAM
3.1 Screening Program.
3.1.1 Screening by Aurora.
During the Collaboration Period, Aurora shall use each Screen
validated pursuant to Section 2.2.2 to test the activity of
Compounds provided by Allelix or agreed by the parties
pursuant to Section 3.1.2. Aurora shall, with regard to each
such Screen, screen Compounds as determined by the CC and
provide retests of Compounds or putative Hits, and
determination of crude IC50's as determined by the CC (the
"Screening Program").
3.1.2 Compound Supply.
Allelix shall, at its expense, supply to Aurora Compounds
selected by Allelix for a Screening Program. In the event
Allelix desires to have Aurora test in a Screening Program a
Compound (including a library of compounds) owned, accessed or
Controlled by Aurora, the parties agree to negotiate in good
faith the terms and conditions under which such compound may
be screened. Any compounds supplied by Allelix for use in a
Screening Program will be provided to Aurora in 96-well
microtiter plates, in the quantities, form and format as
agreed by the CC. Aurora agrees not to transfer any compounds
received from Allelix for use in connection with the Screening
Program to any Third Party or to use such compounds for
purposes not contemplated herein without Allelix's prior
written consent.
3.1.3 Screening Program Reports.
During the course of each Screening Program, individuals from
Allelix and Aurora, appointed by the CC, will discuss and
review monthly, if not more frequently, the progress and any
issues relating to each Screening Program. During the
Collaboration Period, the CC will review and prepare quarterly
reports for each Screening Program in progress at that time.
Each progress report shall provide a
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written update of work performed, any Hits identified, and all
available supporting data.
3.2 Screening Supplies for Lead Optimization.
3.2.1 Supplies from Aurora.
Upon demonstrating compliance with the Screen Development Plan
and applicable Validation Criteria for a Screen and Aurora
receiving the payment provided for under Section 2.2.4 for such
Screen, Aurora will ship the Screen to Allelix, including
biological materials and samples of reagents required for
Allelix to begin lead optimization or characterization of Hits
identified by Aurora in a Screening Program ("Screening
Supplies"). Allelix may request that Aurora supply Allelix
with additional biological materials and reagents required to
conduct lead optimization or characterization of Hits
identified by Aurora in a Screening Program and within thirty
(30) days of receipt of a written purchase order from Allelix
therefor, Aurora will supply to Allelix agreed quantities of
any biological materials and reagents required to conduct such
lead optimization and Hit characterization. Allelix will pay
Aurora for any such additional Screen Supplies based on a ***
***. Such *** *** shall be consistently calculated in
relation to *** for similar quantities and periods of time.
3.2.2 Shipping.
All Screening Supplies delivered pursuant to the terms of this
Agreement shall be suitably packed for surface or air
shipment, in Allelix's discretion, in Aurora's standard
shipping cartons, and delivered to Allelix or its carrier
agent F.O.B. at a shipping location designated by Aurora and
agreed to by Allelix, at which location risk of loss shall
pass to Allelix. All freight, insurance, and other shipping
expenses, and all applicable taxes, duties and similar
charges, as well as any special packing expenses incurred by
Aurora at the request of Allelix shall be paid by Allelix.
3.2.3 Limited Use.
Allelix may use any Screening Supplies provided hereunder for
use with the Screens solely to conduct lead optimization or
characterization of Hits identified by Aurora in a Screening
Program, subject to the terms and conditions herein; provided,
however,
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that in no event shall Allelix use any Screen or Screening
Supplies on behalf of a Third Party without the prior written
consent of Aurora.
3.3 Screening Payments.
3.3.1 Base Screening Fee.
In partial consideration for Aurora's performance of the
Screening Program in accordance with Article 3, Allelix will
pay to Aurora *** per Screening Program within thirty (30) days
of receipt of an invoice from Aurora. Upon receipt of such
payment, Aurora will proceed with testing Compounds in such
Screening Program pursuant to Section 3.1. Such amount shall
be ***. If such Screening Program exceeds thirty (30) days
***, provided, however, that Aurora notifies Allelix in writing
of the same and Allelix consents in writing to the same. In
the event Allelix does not agree to allow Aurora to continue
the Screen beyond such thirty (30) day period, it shall so
notify Aurora within seven (7) days of the date it receives
the foregoing notice from Aurora. Allelix will be deemed to
have agreed to allow Aurora to continue the Screen beyond the
thirty (30) day period if it fails to provide notice to Aurora
of its decision with respect thereto within the seven (7) day
period. If such Screening Program is completed prior to thirty
(30) days, ***.
Alternatively, Allelix may request in writing to Aurora that
the CC develop and approve an additional screening plan or
lead optimization plan that includes the appropriate amount of
FTE funding for such additional screening or characterization
of Hits. Such request shall be made within seven (7) days of
Aurora's above notification to Allelix.
ARTICLE 4. DEVELOPMENT AND COMMERCIALIZATION
The selection of Hit(s), Derivative(s), Development Candidate(s), and
Product(s) for development and commercialization will be at the discretion of
Allelix. Allelix will, at no expense to Aurora, be responsible for conducting
or arranging all development and commercialization of Product(s).
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Allelix will use reasonable efforts to commercialize Products as expeditiously
as practicable and take such other actions as is necessary and to obtain
government approvals to market the Product(s) in significant markets throughout
the world selected by Allelix, and thereafter to promote or have promoted such
Product(s) and meet the market demand therefor. Allelix will promptly notify
Aurora at such time as any Agreement Compound becomes a Development Candidate,
or otherwise achieves any milestone for which Allelix will owe Aurora a
milestone payment pursuant to Section 6.1. During the period in which an
Agreement Compound or a Product is under development by Allelix (or its
designee), within thirty (30) days of the end of a calendar quarter, or within
fifteen (15) days of receipt of such information from a Third Party, Allelix
agrees to provide Aurora with a written summary of the development progress
made in respect of an Agreement Compound or a Product during such calendar
quarter.
ARTICLE 5. LICENSES
5.1 License to Allelix.
Subject to the terms and conditions of this Agreement, Aurora grants to
Allelix on a Screen-by-Screen basis a world-wide, non-transferable,
non-exclusive license, without the right to grant sublicenses, under
Aurora Technology to make and use any Screen and use any Secreening
Supplies paid for by Allelix under Sections 2.24 and 3.21 for the Term
of this Agreement in such Screen.
5.2 License to Aurora.
Subject to the terms and conditions of this Agreement, Allelix grants
to Aurora, on a Screen-by-Screen basis, a world-wide, non-
transferable, nonexclusive, license under Allelix Technology, without
the right to grant sublicenses, to make and use for Allelix any Screen
under Article 2 or 3 and for the Term of Aurora's performance under
Article 2 or 3.
5.3 No Implied Licenses.
Only those licenses expressly granted in Sections 5.1 and 5.2 shall be
of any force and effect. No license or other right in the Aurora
Technology or Allelix Technology shall be created hereunder by
implication, estoppel, or otherwise.
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5.4 Covenant Not to Assert.
***
ARTICLE 6. MILESTONES AND ROYALTIES
6.1 Milestone Payments.
Allelix will pay to Aurora the following amounts upon achievement of
each of the following milestones by Allelix, its Affiliates, its
Licensors, its Licensees, or any party designated by Allelix to
develop Agreement Compounds with respect to the first Hit, Development
Candidate, or Derivative identified through the use of a particular
Screen to reach such milestone:
Milestone Per Screen Payment
-------------------- -------
*** ***
*** ***
*** ***
*** ***
*** ***
Allelix will notify Aurora in writing within fifteen (15) days of the
achievement of, or within fifteen (15) days of Allelix receiving
notification from a Third Party of the achievement of any milestones
with respect to which a payment is due to Aurora pursuant to this
Section 6.1. All payments made by Allelix pursuant to this Section
6.1 shall be made within thirty (30) days after achievement of the
applicable milestone. If in the course of compound
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development any of the above Phases are combined, Aurora will receive
the above milestone payments as if each Phase were initiated
separately.
6.2 Royalties to Aurora.
6.2.1 Sales by Licensees.
With respect to Product(s) sold or otherwise distributed by or
on behalf of a Licensee, or a Licensor, Allelix shall pay
Aurora *** of the Net Royalty Revenue received by Allelix from
the Licensee or Licensor in respect of Net Sales; provided,
however, that such amount payable to Aurora pursuant to this
Section 6.2.1 ***
6.2.2 Sales by Allelix or its Affiliates.
Allelix shall pay to Aurora a royalty equal to *** of Net Sales
of Product(s) by Allelix or its Affiliates.
6.2.3 Trade Secret Royalty.
The parties acknowledge that the principal value contributed
by Aurora under this Agreement is the enhanced probability of
identifying leads for human pharmaceutical products (or other
products having commercial value) and the potential to
generate multiple leads, either or both of which the parties
reasonably believe will lessen the time required to bring
pharmaceutical products to market and increase the efficiency
of drug discovery and development processes and technologies.
Additionally, the parties acknowledge that Aurora may not own
or control patent applications or patents covering the
manufacture, sale, use, or importation of a particular
Agreement Compound or Product. Allelix acknowledges and
agrees that the value it receives hereunder is in the access
and use of the Screens and the Aurora Technology.
Accordingly, Allelix agrees to pay those royalties and other
amounts at the applicable rate specified in this Section 6.2,
regardless of whether a Product is covered by a patent
application or patent within the Aurora Technology.
6.2.4 Royalty Term.
Allelix's obligation to pay royalties to Aurora pursuant to
this Section 6.2 shall continue on a Product-by-Product and
country-by-country basis until ***
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***
6.2.5 Other Revenues.
In the event that Allelix or an Allelix Affiliate receives an
up front payment from a Third Party for any rights (including
intellectual property or marketing rights) for Product(s) or
Agreement Compound(s), Aurora may elect one of the following
payment schedules:
(i) Aurora will receive the milestone payments, as
those milestones are satisfied according to
Section 6.1; or
(ii) Aurora will receive *** of any up front payment
(including cash, payment in kind, equity in such
Third Party, premium on equity purchased by such
Third Party or any other form) by a Third Party to
Allelix or an Allelix Affiliate for any rights
(including intellectual property or marketing
rights) for Product(s) or Agreement Compound(s).
Provided, however, Allelix shall not be obligated
to pay Aurora any portion of any up front payment
paid to Allelix or an Allelix Affiliate by a Third
Party specifically allocated to the future
research and development of such Product(s) or
Agreement Compound(s); provided, further, that
Allelix shall not be obligated to pay Aurora any
milestone payment under Section 6.1 that is due
after the date Aurora receives such up front
payment under this Section 6.2.5 (ii) and that any
milestone payments paid by Allelix to Aurora for
such Product(s) or Agreement Compound(s) under
Section 6.1 prior to Aurora receiving such up
front payment under this Section 6.2.5 (ii) shall
be deducted from such up front payment to be paid
by Allelix to Aurora.
Allelix will report in writing to Aurora the amount of any
such up front payment within fifteen (15) days of receiving
such payment. After receipt of such report, Aurora will
notify Allelix in writing of its election under this Section
6.2.5 within fifteen (15) days.
ARTICLE 7. PAYMENTS; BOOKS AND RECORDS
7.1 Royalty Reports.
After the first commercial sale of a Product on which royalties are
payable hereunder to
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Aurora by Allelix, Allelix shall make quarterly written reports to
Aurora within thirty (30) days after the end of each calendar quarter
or fifteen (15) days from the receipt of such information from a Third
Party, stating in each such report, on a country-by-country basis, the
number, description, and aggregate Net Sales of each Product sold in a
country during the calendar quarter upon which a royalty is payable
under Section 6.2 above.
7.2 Screen Development and Screening Payments.
Any payments due pursuant to Sections 2.2.4, 3.2.1, 3.3.1, 6.1, or 6.2
shall be paid within thirty (30) days of receipt of an invoice
therefor.
7.3 Payment Method.
All payments due under this Agreement shall be made by bank wire
transfer when due in immediately available funds to an account
designated by Aurora. Any payments that are not paid on the date such
payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at the prime rate as reported by
the Bank of America, San Francisco, on the date such payment is due,
plus an additional two percent (2%) per annum, calculated on the
number of days such payment is delinquent.
7.4 Currency Conversion.
All payments outlined in this Agreement are in U.S. Dollars. If any
currency conversion shall be required in connection with the
calculation of royalties or any other payments hereunder, such
conversion shall be made using the selling exchange rate for
conversion of the foreign currency into U.S. Dollars, quoted for
current transactions as reported in The Wall Street Journal for the
last reported day of the calendar quarter to which such payment
pertains.
7.5 Records; Inspection.
Allelix and its Affiliates shall keep complete, true, and accurate
books of account and records for the purpose of determining the royalty
amounts payable under this Agreement. Such books and records shall be
kept at the principal place of business of such party for at least
three (3) years following the end of the calendar quarter to which they
pertain. Such records will be open for inspection during such three
(3) year period by an accounting firm appointed by Aurora. Such
inspections may be made no more than once each calendar year, at
reasonable times and on reasonable notice. Inspections conducted under
this Section 7.5 shall be at the expense of Aurora, unless a variation
or error producing *** of the amount stated for any period covered by
the inspection is established in the course of any such inspection,
whereupon all costs relating to the inspection for such period and any
unpaid amounts that are discovered will be paid promptly by Allelix,
together
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with interest thereon from the date such payments were due at the
prime rate as reported by the Bank of America, San Francisco,
California, plus an additional two percent (2%) per annum.
7.6 Tax Matters.
All royalty amounts required to be paid to Aurora pursuant to this
Agreement shall be paid without deduction for withholding for or on
account of any taxes, including any sales, use, value added, or
transfer tax, or similar governmental charge imposed by a jurisdiction
other than the United States. Payment of any such tax or similar
governmental charge, including any due in connection with the transfer
of the Screens hereunder, shall be the sole responsibility of Allelix.
In the event that Aurora is required to pay any such tax or other
similar charge, Allelix shall promptly reimburse Aurora for payment of
such amounts.
7.7 Refunds or Credits.
Any payment made to Aurora pursuant to this Agreement shall be
non-refundable and shall be creditable only against another payment
payable hereunder in the case of early completion of a Screening
Program as outlined in Section 3.3.1.
ARTICLE 8. INTELLECTUAL PROPERTY
8.1 Ownership.
8.1.1 Sole Ownership.
Allelix shall be the sole owner of all intellectual property
conceived and reduced to practice or otherwise developed
solely by its employees and agents, and all patent
applications and patents claiming such intellectual property;
provided, however, that intellectual property relating to
improvements to Aurora Technology will be assigned by Allelix
to Aurora. Aurora shall be the sole owner of any intellectual
property conceived and reduced to practice or otherwise
developed solely by its employees and agents and all patent
applications and patents claiming such intellectual property;
provided, however, that intellectual property derived from
Compounds provided by Allelix, including but not limited to
information contained in the quarterly reports prepared by the
CC provided for in Section 3.1.3, and relating to the use of
Agreement Compounds and Products will be assigned by Aurora to
Allelix.
8.1.2 Joint Technology.
If, during the Collaboration Period, one or more employees or
consultants of Aurora,
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together with one or more employees or consultants of Allelix,
jointly conceive any intellectual property (the "Joint
Technology"), each of the parties shall own an undivided
one-half interest in the Joint Technology; provided, however,
that Joint Technology relating to Aurora Technology will be
assigned by Allelix to Aurora; provided, further, that
intellectual property derived from Compounds provided by
Allelix and relating to the use of Agreement Compounds and
Products will be assigned by Aurora to Allelix.
8.1.3 U.S. Law.
Inventorship and rights of ownership with respect to Aurora
Technology, Allelix Technology, and Joint Technology shall be
determined in accordance with the patent laws of the United
States.
8.1.4 Retained Rights.
Except as otherwise expressly provided in this Agreement,
nothing in this Agreement is intended to convey or transfer
ownership by one party to the other of any rights, title or
interest in any Confidential Information, technology or
Patents Rights owned or Controlled by a party. Except as
expressly provided for in this Agreement, nothing in this
Agreement shall be construed as a license or sublicense by one
party to the other of any rights in any technology or Patent
Rights owned or Controlled by a party or its Affiliates.
8.2 Patent Filing and Prosecution.
8.2.1 Cooperation.
Allelix and Aurora shall consult together upon all matters
relating to the filing, prosecution, and maintenance of
patents within Joint Technology. This shall include giving
the other party the opportunity to review and comment upon the
text of any priority application before filing; consultation
about the decision whether or not to foreign file, and if so,
in which countries; and giving the other party the
opportunity, as far in advance of filing dates as feasible, to
fully review and comment on the basic foreign filing text.
Each party shall provide to the other copies of any search
reports and official actions, including notice of all
interferences, reissues, re-examinations, and oppositions
received from the relevant patent offices promptly after
receipt. Each party shall reasonably cooperate with and
assist the other in connection with activities subject to this
Section 8.2.1, at the other's request. Each party shall
execute and procure that its employee inventors shall execute
all documents reasonably required in connection with the
filing, prosecution, or maintenance of patents within the
Joint
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Technology. Patent counsel designated by each party will meet
in person or by telephone or video conference at least on a
semi-annual basis during (i) the Collaboration Period, and
(ii) the pendency of any of the patent applications within the
scope of this Section 8.2.1 to coordinate, discuss, review,
and implement patent filing and prosecution strategy.
8.2.2 Failure to Prosecute.
Either party may elect upon sixty (60) days prior notice to
discontinue prosecution or maintenance of any patent within
Joint Technology in any or all countries. In such case, the
other party shall have the right to prosecute and maintain
such patent applications and patents in such countries it
deems appropriate, at its sole expense.
8.3 Enforcement.
Allelix and Aurora shall separately have the right, but not the
obligation, to bring proceedings against any Third Party for the
inappropriate use, including patent infringement, of technology, trade
secrets or Patent Rights solely owned or Controlled by it, and at its
own risk and expense. Such party shall be entitled to retain any and
all awards or damages obtained in any such proceeding. At the request
and expense of either party, the other party shall give the requesting
party all reasonable assistance required to file and conduct any such
proceeding. For Joint Technology, Allelix and Aurora shall use their
best efforts to coordinate pursuing a commercially reasonable action
to address inappropriate use, including patent infringement, by third
parties of such Joint Technology and to determine how expenses and any
recovery from such action shall be allocated between the parties.
Allelix, as a non-exclusive licensee, will make reasonable efforts to
provide Aurora with any information known to Allelix relating to the
suspected or actual inappropriate use, including patent infringement,
of the Aurora Technology.
8.4 Defense of Infringement Claims.
8.4.1 Claims Relating to Agreement Compounds and Products.
Aurora will cooperate with Allelix, at Allelix's expense, in
the defense of any suit, action or proceeding against Aurora
and its Affiliates, or Allelix and its Affiliates, Licensees
or Licensors alleging the infringement of the intellectual
property rights of a Third Party by reason of the manufacture,
use or sale of a Product by Allelix. Allelix shall give
Aurora prompt written notice of the commencement of any such
suit, action, proceeding or claim of infringement. Aurora
shall give to Allelix all authority, information and
assistance necessary to defend or settle any such suit, action
or proceeding; provided, however, that if Aurora or its
Affiliates or licensees should join in any such suit, action
or proceeding pursuant to this Section 8.4.1 and at
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the request of Allelix but subject to Section 11.2, Allelix
shall hold Aurora or any such Affiliate or licensee, as
applicable, free, clear and harmless from any and all costs
and expenses of such litigation, including reasonable
attorneys' fees. Allelix shall have the right to control the
conduct and settlement of any such litigation; provided,
however, that (i) Allelix shall not enter into any settlement
of such claim, suit, or proceeding which admits or concedes
that any aspect of the Aurora Technology or Joint Technology
is invalid or unenforceable without the prior written consent
of Aurora.
8.4.2 Claims Relating to Aurora Technology.
Allelix will cooperate with Aurora, at Aurora's expense, in
the defense of any suit, action or proceeding against Aurora
or its Affiliates alleging the infringement of the
intellectual property rights of a Third Party by reason of
Aurora's use of any Aurora Patent Rights and Aurora Technology
in performing its obligations to Allelix under this Agreement.
Aurora shall give Allelix prompt written notice of the
commencement of any such suit, action, proceeding or claim of
infringement. Allelix shall give to Aurora all authority,
information and assistance necessary to defend or settle any
such suit, action or proceeding; provided, however, that if
Allelix should join in any such suit, action or proceeding
pursuant to this Section 8.4.2 and at the request of Aurora,
but subject to Section 11.1, Aurora shall hold Allelix free,
clear and harmless from any and all costs and expenses of such
litigation, including reasonable attorneys' fees.
ARTICLE 9. CONFIDENTIALITY
9.1 Confidential Information.
Except as expressly provided herein, the parties agree that, for the
Term of this Agreement and for five (5) years thereafter, the
Receiving Party, except as expressly provided in this Article 9, shall
not disclose to any Third Party or use for any purpose any
Confidential Information of the Disclosing Party, except to the extent
that it can be established by the Receiving Party by competent proof
that such information:
(i) was already known to the Receiving
Party, other than under an
obligation of confidentiality, at
the time of disclosure;
(ii) was generally available to the
public or otherwise part of the
public domain at the time of its
disclosure to the Receiving Party;
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(iii) became generally available to the
public or otherwise part of the
public domain after its disclosure
and other than through any act or
omission of the Receiving Party in
breach of this Agreement;
(iv) was independently developed by the
Receiving Party;
(v) was, subsequently, lawfully
disclosed to the Receiving Party by
a person other than the Disclosing
Party; or
(vi) was approved in writing by the
Disclosing Party for public
disclosure by the Receiving Party.
9.2 Permitted Use and Disclosures.
Each party hereto may use or disclose Confidential Information
disclosed to it by the other party to the extent such information is
included in the Aurora Technology, Allelix Technology or Joint
Technology, and to the extent such use or disclosure is reasonably
necessary and permitted in the exercise of the rights granted
hereunder in filing or prosecuting patent applications, prosecuting or
defending litigation, complying with applicable governmental
regulations, or court orders or otherwise submitting information to
tax or other governmental authorities, conducting clinical trials, or
making a permitted sublicense or otherwise exercising license rights
expressly granted to the other party pursuant to the terms of this
Agreement, provided that if a party is required to make any such
disclosure of the other party's Confidential Information, other than
pursuant to a confidentiality agreement, it will give reasonable
advance notice of such disclosure to the other party and, save to the
extent inappropriate in the case of patent applications, will use its
reasonable efforts to secure confidential treatment of such
Confidential Information in consultation with the other party prior to
such disclosure (whether through protective orders or otherwise) and
disclose only the minimum necessary to comply with such requirements.
9.3 Nondisclosure of Terms.
Each of the parties hereto agrees not to disclose to any Third Party
the terms of this Agreement without the prior written consent of the
other party hereto, except to such party's attorneys, advisors,
investors, and others on a need-to-know basis under circumstances that
reasonably ensure the confidentiality thereof, or to the extent
required by law. Notwithstanding the foregoing, the parties shall
agree upon a press release to announce the execution of this
Agreement. Thereafter, Aurora and Allelix may each disclose to Third
Parties the information contained in such press release without the
need for further approval
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by the other. In addition, Aurora may (i) make public statements
regarding Development Candidates or Products by announcing the
achievement of milestones and fees therefor, following consultation
with Allelix and with the written consent of Allelix to the form and
content of the public statement, and (ii) without the prior consent of
Allelix, make public statements regarding the overall success rate(s)
achieved by and/or for its customers with the use of Aurora
Technology, and Allelix Technology, provided it may not disclose any
Screens or Allelix's identity. Allelix shall be free to make public
statements, press releases, and the like with respect to Agreement
Compounds, Development Candidates, and Products.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1 Allelix.
As of the Effective Date, Allelix warrants and represents on its own
behalf and on behalf of its Affiliates that: (i) it has the legal
power, authority and right to enter into this Agreement, and to
perform all of its obligations hereunder; (ii) it has the legal right
and power to extend to Aurora the rights granted in this Agreement;
and (iii) to the best of its knowledge as of the Effective Date, there
are no existing or threatened actions, suits, or claims pending
against it with respect to the Allelix Technology.
10.2 Aurora.
As of the Effective Date, Aurora represents and warrants that: (i) it
has the full legal power, authority, and right to enter into this
Agreement, and to perform all of its obligations hereunder; (ii) it
has the legal right and power to extend the rights to Allelix granted
in this Agreement; and (iii) to the best of its knowledge as of the
Effective Date, there are no existing or threatened actions, suits, or
claims pending against it with respect to the Aurora Technology.
10.3 Disclaimer.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, AURORA AND
ALLELIX MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS
OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, WITH
RESPECT TO AURORA TECHNOLOGY, ALLELIX TECHNOLOGY, SCREENS, COMPOUNDS,
AGENTS, DEVELOPMENT CANDIDATES, DERIVATIVES, PRODUCTS, OR INFORMATION
DISCLOSED INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF ANY
AURORA TECHNOLOGY OR ALLELIX TECHNOLOGY, PATENTED OR UNPATENTED, OR
ALLELIX.AURORA COLLABORATION AGREEMENT
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NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
ARTICLE 11. INDEMNIFICATION
11.1 Allelix.
Allelix agrees to indemnify, defend, and hold Aurora, its Affiliates,
and the directors, officers, employees, and agents of each of them
(the "Aurora Indemnitees") harmless from and against any losses,
costs, claims, damages, liabilities or expenses (including reasonable
attorneys' and professional fees and court and other expenses of
litigation) (collectively, "Liabilities") arising out of or in
connection with Third Party claims relating to (i) any Agreement
Compounds or Products developed, manufactured, used, sold, or
otherwise distributed by or on behalf of Allelix, its Affiliates,
Licensors, Licensees, or other designees (including, without
limitation, product liability claims), (ii) the possession and/or use
by Aurora of any Compounds or Compound libraries provided by Allelix
to Aurora hereunder; (iii) the performance (by any party other than
Aurora) of Screens by or on behalf of Allelix; or (iv) any breach by
Allelix of its obligations under or the representations and warranties
made in this Agreement, except, in each case, to the extent such
Liabilities result from the negligence or intentional misconduct of
Aurora.
11.2 Aurora.
Aurora agrees to indemnify, defend, and hold Allelix, its Affiliates,
Licensors and Licensees, and the directors, officers, employees, and
agents of each of them (the "Allelix Indemnitees") harmless from and
against any Liabilities arising out of or in connection with Third
Party claims relating to ***
11.3 Procedure.
In the event that any Indemnitee intends to claim indemnification
under this Article 11, it shall promptly notify the other party in
writing of such alleged Liability. The indemnifying party shall have
the right to control the defense thereof using counsel of its choice;
provided,
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JANUARY 21, 1996
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however, that any Indemnitee shall have the right to retain its own
counsel at its own expense, for any reason, including if
representation of any Indemnitee by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party
reasonably represented by such counsel in such proceeding. The
affected Indemnitees shall cooperate with the indemnifying party and
its legal representatives in the investigation of any action, claim,
or liability covered by this Article 11. The indemnified party shall
not, except at its own cost, voluntarily make any payment or incur any
expense with respect to any claim or suit without the prior written
consent of the indemnifying party, which such party shall not be
required to give.
ARTICLE 12. TERM AND TERMINATION
12.1 Term.
The term of this Agreement shall begin as of the Effective Date and,
unless terminated earlier as provided in this Article 12, continue in
full force and effect until the expiration of the royalty payments due
under this Agreement (the "Term").
12.2 Termination for Cause.
Either party hereto may terminate this Agreement in the event the
other party has materially breached or defaulted in the performance of
any of its material obligations hereunder, and such default shall have
continued for thirty (30) days after written notice thereof was
provided to the breaching party by the nonbreaching party. Any
termination shall become effective at the end of such thirty (30) day
period, unless the breaching party has cured any such breach or
default prior to the expiration of the thirty (30) day cure period or
has provided a written plan to cure any such breach or default that is
acceptable to the other party.
12.3 Termination for Insolvency.
If voluntary or involuntary proceedings by or against a party are
instituted in bankruptcy under any insolvency law, or a receiver or
custodian is appointed for such party, or proceedings are instituted
by or against such party for corporate reorganization or the
dissolution of such party, which proceedings, if involuntary, shall
not have been dismissed within sixty (60) days after the date of
filing, or if such party makes an assignment for the benefit of
creditors, or substantially all of the assets of such party are seized
or attached and not released within sixty (60) days thereafter, the
other party may immediately terminate this
ALLELIX.AURORA COLLABORATION AGREEMENT
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Agreement effective upon giving notice of such termination to such
party.
12.4 Permissive Termination.
During the Collaboration Period, Allelix shall have the right to
terminate this Agreement with six (6) months written notice. Upon
such notice, Aurora's obligations to provide screen development and
screening services will be fulfilled, and all Screen Development Plans
and Screening Programs in progress shall terminate.
12.5 Effect of Breach or Termination.
12.5.1 Accrued Obligations.
Termination of this Agreement for any reason shall not release
any party hereto from any liability which, at the time of such
termination, has already accrued to the other party or which
is attributable to a period prior to such termination nor
preclude either party from pursuing all rights and remedies it
may have hereunder or at law or in equity with respect to any
breach of this Agreement.
12.5.2 Return of Confidential Information.
In the event of termination, but not expiration, of this
Agreement, Aurora and Allelix shall promptly return to the
other party all Confidential Information received from the
other party (except one (1) copy of which may be retained for
archival purposes), and neither party shall be entitled to use
any Confidential Information of the other party for any
purpose during the Term such Confidential Information is to
remain confidential, as provided in Section 9.1. Upon any
such termination all materials provided by Allelix to Aurora,
including but not limited to Compounds, shall be returned to
Allelix or destroyed at the discretion of Allelix. For any
termination by Aurora for cause, all materials provided by
Aurora to Allelix shall be returned to Aurora or destroyed at
the discretion of Aurora.
12.5.3 Licenses.
The licenses granted to Allelix and Aurora hereunder shall
terminate in the event of termination of this Agreement;
provided, however, that in the event that Allelix shall
terminate with cause under Section12.2 or permissive
termination under Section 12.4, the licenses granted by Aurora
to Allelix under Section 5.1 shall remain in effect.
ALLELIX.AURORA COLLABORATION AGREEMENT
JANUARY 21, 1996
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12.6 Survival.
Sections 5.3, 5.4, 10.3, 12.5 and 12.6, and Articles 1, 6, 7, 8, 9, 11
and 13 shall survive expiration or termination of this Agreement for
any reason.
ARTICLE 13. MISCELLANEOUS
13.1 Governing Law.
This Agreement and any dispute arising from the construction,
performance, or breach hereof shall be governed by, construed, and
enforced in accordance with the laws of the State of Colorado, without
reference to conflicts of laws principles.
13.2 Dispute Resolution.
13.2.1 Mediation.
In the event of any dispute or claim arising out of or related
to this Agreement, the parties will attempt in good faith to
resolve such dispute or claim by mediation in Denver,
Colorado, in accordance with the American Arbitration
Association Commercial Mediation Rules. Nothing herein,
however, shall prohibit either party from initiating
arbitration proceedings pursuant to Section 13.2.2, if such
party would be substantially prejudiced by a failure to act
during the time that such good faith efforts are being made to
resolve the dispute or claim through negotiation or mediation.
The costs of mediation shall be shared equally by the parties
to the mediation.
13.2.2 Arbitration.
Any dispute or claim arising out of or related to this
Agreement, or the interpretation, making, performance, breach,
validity, or termination hereof, which has not been resolved
by negotiation or mediation as set forth above, shall be
finally settled by binding arbitration in Denver, Colorado
under the Commercial Arbitration Rules and the Supplementary
Procedures for Large Complex Disputes of the American
Arbitration Association (together the "AAA Rules") by one
arbitrator appointed in accordance with the AAA Rules. The
arbitration proceedings shall be governed procedurally by
federal arbitration law and by the AAA Rules, without
reference to
ALLELIX.AURORA COLLABORATION AGREEMENT
JANUARY 21, 1996
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state arbitration law, and at the request of either party, the
arbitrator will enter an appropriate protective order to
maintain the confidentiality of information produced or
exchanged in the course of the arbitration proceedings. The
judgment of the arbitrator shall be in the form of a reasoned,
written opinion, and shall be issued within sixty (60) days of
the conclusion of the arbitration proceeding. Judgment on the
award rendered by the arbitrator may be entered in any court
of competent jurisdiction. The parties may apply to any court
of competent jurisdiction for a temporary restraining order,
preliminary injunction, or other interim relief, as necessary,
without breach of this arbitration provision and without any
abridgment of the powers of the arbitrator. The arbitrator
may award to the prevailing party, if any, as determined by
the arbitrator, its costs and fees, including, without
limitation, AAA administrative fees, arbitrator fees, travel
expenses, out-of-pocket expenses, witness fees, and
reasonable attorneys' fees.
13.3 Assignment.
This Agreement shall not be assignable by either party to any Third
Party without the written consent of the other party hereto; provided,
however, that either party may assign this Agreement, without the
other's consent, to an entity that acquires all or substantially all
of the business or assets of such party to which this Agreement
pertains, whether by merger, reorganization, operation of law,
acquisition, sale, or otherwise. In the event that Aurora assigns
this Agreement, without Allelix's consent, to an entity that acquires
all or substantially all of the business or assets of Aurora, whether
by merger, reorganization, operation of law, acquisition, sale or
otherwise, Allelix may terminate this Agreement immediately by notice
in writing to Aurora. This Agreement shall be binding upon and inure
to the benefit of any permitted assignee or other transferee, and any
such party shall agree to perform the obligations of the assignor or
transferor.
13.4 Independent Contractors.
The relationship of the parties hereto is that of independent
contractors. Neither party hereto is to be deemed to be an agent,
partner, or joint venturer of the other party for any purpose as a
result of this Agreement or the transactions contemplated thereby.
13.5 Compliance with Laws.
In exercising their rights under this Agreement, the parties shall
fully comply in all material respects with the requirements of any and
all applicable laws, regulations, rules, and orders of any
governmental body having jurisdiction over the exercise of rights
under this Agreement,
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including, without limitation, those applicable to the discovery,
development, manufacture, distribution, import and export, and sale of
pharmaceutical products.
13.6 Notices.
Legal notices, requests, and other communications hereunder shall be
in writing and shall be delivered personally or by registered or
certified mail, return receipt requested, postage prepaid, in each
case to the respective address specified below or such other address
as may be specified in writing to the other party hereto, and shall be
deemed to have been given upon receipt:
If to Aurora: Aurora Biosciences Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ U.S.A.
Attn.: President and CEO
CC: Legal and Business Development
If to Allelix: Allelix Biopharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Attn.: President and CEO
13.7 Severability.
In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect to the fullest extent permitted by law without said provision,
and the parties shall amend the Agreement to the extent feasible to
lawfully include the substance of the excluded term to as fully as
possible realize the intent of the parties and their commercial
bargain.
13.8 Waiver.
It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or
default. No waiver shall be effective unless in a writing signed by
the party having the waived right.
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13.9 Force Majeure.
Nonperformance of any party shall be excused to the extent that
performance is rendered impossible by strike, fire, earthquake, flood,
governmental acts or orders or restrictions, failure of suppliers, or
any other reason where failure to perform is beyond the reasonable
control and not caused by the negligence or intentional conduct or
misconduct of the nonperforming party, provided such party uses its
best efforts to resume performance as promptly as possible.
13.10 Advice of Counsel.
This Agreement has been negotiated by the parties and their respective
counsel and shall be fairly interpreted in accordance with its terms
and without any rules of construction relating to which party drafted
the Agreement being applied in favor or against either party.
13.11 No Consequential Damages.
IN NO EVENT SHALL EITHER PARTY TO THIS AGREEMENT HAVE ANY LIABILITY TO
THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES
ARISING UNDER THIS AGREEMENT UNDER ANY THEORY OF LIABILITY.
13.12 Complete Agreement.
This Agreement, constitutes the entire agreement, both written and
oral, between the parties with respect to the subject matter hereof,
and all prior agreements respecting the subject matter hereof, either
written or oral, expressed or implied, shall be abrogated, canceled,
and are null and void and of no effect. No amendment or change hereof
or addition hereto shall be effective or binding on either of the
parties unless reduced to writing and executed by a duly authorized
representative of each of Aurora and Allelix.
13.13 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to
be one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
AURORA BIOSCIENCES CORPORATION ALLELIX BIOPHARMACEUTICALS INC.
By: By:
---------------------- --------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Technical Officer Title: President and CEO
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