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CONFIDENTIAL - EXECUTION COPY
EXHIBIT 10.58
CYSTIC FIBROSIS RESEARCH ALLIANCE AND COMMERCIALIZATION AGREEMENT
BETWEEN
THE CYSTIC FIBROSIS FOUNDATION
AND
AURORA BIOSCIENCES CORPORATION
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CYSTIC FIBROSIS RESEARCH
ALLIANCE AND COMMERCIALIZATION AGREEMENT
THIS AGREEMENT is entered into as of May 19, 2000 (the "Effective Date") by and
between the CYSTIC FIBROSIS FOUNDATION with a principal place of business at
6931 Arlington Road, Bethesda, Maryland 20814 ("CFF"), and AURORA BIOSCIENCES
CORPORATION, a Delaware corporation having offices at 11010 Torreyana Rd., San
Diego, California 92121 ("Aurora").
RECITALS
WHEREAS, Aurora has expertise in the development of automated screening systems
and screening biologies used therein and has rights to certain intellectual
property related thereto; and
WHEREAS, Aurora has the scientific expertise and capacity to undertake the drug
discovery program contemplated herein; and
WHEREAS, CFF wishes to enter into this Agreement with Aurora to significantly
extend and expand an existing cystic fibrosis assay development and screening
project.
NOW, THEREFORE, in consideration of the foregoing premises and of the covenants,
representations and agreements set forth below, the parties agree as follows:
1 DEFINITIONS
The definitions used in this Agreement are attached in Exhibit 1.
2 THE COLLABORATION
2.1 Collaboration Committee. The Collaboration Committee shall
provide advice and support to the Steering Committee regarding
scientific and technical aspects of the Collaboration. The
Collaboration Committee will cooperate to prepare annually a
detailed and updated Work Plan for each subsequent year of the
Collaboration as provided in Exhibit 2.1 for the first year of
the Collaboration, make recommendations on the allocation of
funded FTEs at Aurora in accordance with this Agreement, and
periodically review the progress of the Collaboration. In
addition, the Collaboration Committee shall make good faith
scientific and resource recommendations to the Steering
Committee as set forth in this Agreement, help to determine
scientific priorities for assay development and screening,
technology development, genomics and bioinformatics initiatives,
suggest changes in strategy or new areas for research, and
identify to the Steering Committee projects that should be
discontinued. Each party will appoint *** voting members to the
Collaboration Committee within *** days of the Effective Date.
Recommendations by the Collaboration Committee will be made by a
simple majority of all voting members.
The Collaboration Committee will request and require Aurora to
provide a written summary of the research performed on an annual
basis and such summary will be reviewed in good faith by the
Collaboration Committee. The Collaboration Committee may
recommend
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approval of the Work Plan for each year of the Collaboration.
The Collaboration Committee will meet in person, by telephone or
videoconference at least *** times per year or more often as
mutually agreed. Each party will pay its own expenses incurred
in connection with participation at Collaboration Committee
meetings. Each party will appoint one (1) of its Collaboration
Committee representatives to be responsible for coordinating
communications between the parties. Subgroups or subcommittees
of the Collaboration Committee may be established and meet,
either in person or by telephone or videoconference, more
frequently on an "as needed" basis. As appropriate, the
Collaboration Committee will make recommendations to the
Steering Committee.
2.2 Steering Committee. The Steering Committee will have overall
management of finances and scientific oversight responsibility
for the Collaboration using recommendations of the Collaboration
Committee. The Steering Committee shall review and approve the
Work Plan as it may be updated and amended from time to time and
other recommendations of the Collaboration Committee, ensure
that reasonable objectives of the Collaboration are pursued and
monitored, that the science performed is of high quality, and
that resources are appropriately acquired or used. With respect
to financial management and scientific issues, the Steering
Committee will attempt to mutually resolve issues that arise in
the course of the Collaboration in a good faith manner. The
Steering Committee will meet in person, by telephone or
videoconference at least *** times per year or more often as
mutually agreed. Each party will pay its own expenses incurred
in connection with participation at Steering Committee meetings.
Each party will appoint one (1) of its Steering Committee
representatives to be responsible for coordinating
communications between the parties. Each party will appoint ***
voting members to the Steering Committee within *** days of the
Effective Date. Decisions of the Steering Committee will be made
by a simple majority of all members, ***.
2.3 The Collaboration. The Collaboration will specifically focus on
the discovery and preclinical development of novel therapeutics
for CF. Subject to the parties' obligations herein, Aurora will
use reasonable efforts during the Collaborative Period to
perform the following in accordance with the Work Plan:
2.3.1. Develop at least *** high throughput or ultra-high
throughput CF Assays or CF-Related Assays for selected
CF Targets.
2.3.2. Conduct at least *** primary screens with CF Assays and
CF-Related Assays of at least *** to *** compounds per
screen using assays developed pursuant to Section 2.3.1,
the number of compounds used depending on the assay type
in accordance with the Work Plan, for a total of up to
*** datapoints ***, including controls, re-tests and
potency determinations which will constitute
approximately *** of such datapoints; provided, however
that no more than *** datapoints (generally in no less
than *** compound blocks for primary screening) will
require Aurora's *** technology. The parties may agree
in writing to screen additional compounds to generate
datapoints in excess of *** using Aurora's ***
technology at a price of *** dollars ($***) per ***
datapoints, and to generate datapoints in excess of ***
datapoints using Aurora's high or ultra high throughput
(UHTSS) technology at a price of *** dollars *** per ***
datapoints.
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2.3.3. Develop focused compound libraries of chemicals ***
pursuant to the Work Plan.
2.3.4. Provide follow-up chemical design and synthesis for Lead
expansion and optimization for an estimated *** Leads
selected from Validated Hits from primary screens using
assays developed pursuant to Section 2.3.1 and the Work
Plan and the parties agree to negotiate in good faith to
expand the Collaboration to pursue additional Leads if
the funding under Section 3.2.1 is insufficient for
further Lead development.
2.3.5. Develop ***assemble a *** assays relevant to each CF
Assay or CF-Related Assay as mutually agreed upon in
writing by the parties and pursuant to the Work Plan.
2.3.6. Profile Hits having desirable secondary functional assay
properties using in vitro assays available to Aurora
that are appropriate for one or more of the following:
metabolism, safety, toxicology and pharmacokinetics as
early in the Collaborative Period as reasonable. Profile
Validated Hits in in vivo tests for pharmacokinetics as
set forth in the Work Plan
2.3.7. Coordinate Lead prioritization, in conjunction with the
Collaboration Committee ***. Lead prioritization will be
based on ***.
2.3.8. Produce *** Development Candidates for CF Assays and
CF-Related Assays *** Development Candidates in total)
with profiles suitable for further in vivo testing and
entry into the drug development pipeline.
2.4 The CF targets not currently specified in the Work Plan that may
be subsequently proposed in writing by CFF after the Effective
Date shall be CF Targets that CFF reasonably believes to be
amenable for development for a high throughput screen using
Aurora Technology. Aurora may reasonably request further
information regarding the proposed CF Targets. Within *** days
of first receiving such information, Aurora shall notify CFF in
writing in the event that Aurora reasonably believes that the
development of a CF Assay or CF-Related Assay based on the
proposed CF Target is not consistent with Aurora's Third Party
obligations or if Aurora believes that the development of a CF
Assay or CF-Related Assay for a proposed CF Target would not
reasonably be legally (e.g., patent infringement) feasible based
on available information and that information provided by CFF.
If Aurora declines to work on a CF Target proposed by CFF,
Aurora will provide CFF with reasons for declining to work on
the proposed CF Target based on the written opinion of outside
counsel, to the extent that Aurora does not have to reveal
Confidential Information of a Third Party, waive attorney client
privilege or contravene an obligation to a Third Party.
2.5 Staffing. In accordance with its best business practices for
staffing to provide discovery services to large pharmaceutical
companies, Aurora will provide *** to the Collaboration to
endeavor to accomplish the reasonable objectives of the Work
Plan. Aurora will propose a Collaboration Manager to the
Steering Committee and subject to the approval of CFF, such
approval not to be unreasonably withheld. ***. Aurora will use
***,
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and if Aurora *** involved in the Collaboration *** in the
Collaboration, Aurora will expeditiously use *** to *** with
***.
3 COMPENSATION TO AURORA
3.1 Technology Access Fee. CFF will pay to Aurora a non-refundable
and non-creditable technology access fee of *** dollars ($***),
due on the Effective Date, and additional payments of ***
dollars ($***) on the subsequent anniversaries of the Effective
Date during the Collaborative Period.
3.2 Research and Contract Services Payments.
3.2.1 FTE Funding. Payments for FTE research support for assay
development, screening, technology development,
chemistry and project management (non-creditable,
non-refundable) for the Collaboration will be made by
CFF to Aurora, initially on the Effective Date (for year
1) and then on the first day of each quarter thereafter
in equal installments for each year during the
Collaborative Period in accordance with following table,
and as adjusted on an annual basis by the Biotech Index:
<TABLE>
<CAPTION>
Year of Agreement No. of FTEs Research Funding Per Year
----------------- ----------- -------------------------
<S> <C> <C>
Year 1 *** ***
Year 2 *** ***
Year 3 *** ***
Year 4 *** ***
Year 5 *** ***
</TABLE>
Aurora will provide *** corresponding to the research performed
under the Collaboration to CFF and the Steering Committee to
facilitate monitoring of progress and expenditures. *** during
the Collaborative Period and applied by Aurora with the approval
of the Collaboration Committee and any *** at the end of the
Collaborative Period ***.
3.2.2. Third Party Contract Services for In Vivo Testing and
Chemistry. In addition to the FTE funding payments as
described in Section 3.2.1 above, CFF will also make
non-creditable, non-refundable payments to Aurora for
the purchase by Aurora of contracted services for in
vivo testing, chemistry scale-up and synthesis to
support in vivo testing or additional chemistry
libraries (not including Sections 2.3.2 and 2.3.3) from
Third Parties necessary for the Collaboration and
approved by the Steering Committee, such payment to be
made by CFF to Aurora within *** days of receipt of
invoice (including back-up invoices and other supporting
detail) from Aurora that such expenses have been
incurred. It is estimated that the total cost of
contract services through the Collaborative Period will
be approximately *** dollars ($***) ***. This ***, for
the Collaboration, pursuant to Section 3.2.1.
3.2.3 Third Party Services and Collaboration. From time to
time, during the Collaborative Period, Aurora may
determine that it is in the best interests of the
Collaboration to (i)
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subcontract certain services within the scope of the
Collaboration including the services set forth in
Section 3.2.2; (ii) access or license biological
materials, reagents, compounds and know-how useful for
the Collaboration from Third Parties, either academic or
commercial; (iii) obtain unusual reagents, materials or
instrumentation (collectively, "Collaboration Assets");
(iv) license technology not otherwise available to
Aurora; or (v) propose that additional Aurora FTE's are
necessary to accomplish the goals of the Collaboration,
which will not include payments by CFF pursuant to
Section 2.3.2 ***. Aurora will review with the
Collaboration Committee and report promptly to the
Steering Committee upon making such determination and,
if possible, at least *** days prior to the beginning of
each year during the Collaboration Period in which the
action resulting from such determination is proposed to
occur:
3.2.3.1 the nature of the Third Party services, licenses
or Collaboration Assets Aurora has determined
are appropriate;
3.2.3.2 such supporting material as is necessary to
allow the Steering Committee to fully understand
the need for such subcontracting, licensing,
Collaboration Assets, additional FTE's, and the
costs involved; and
3.2.3.3 whether Aurora proposes
3.2.3.3.1 that the cost of any such services,
licenses or Collaboration Assets will
be paid by Aurora from the payments
made by CFF to Aurora hereunder; or
3.2.3.3.2 whether Aurora proposes that an
additional payment by CFF will be
necessary because Aurora's other
activities and expenditures on the
Collaboration will cause it to fully
utilize such payments.
3.2.3.4 If Section 3.2.3.3.2 above is applicable or if
additional FTE's are proposed, the Steering
Committee shall determine whether ***.
Additional Aurora FTEs utilized within this
Collaboration will be charged to CFF at a rate
of *** dollars ($***) per year, as adjusted by
the ***.
3.2.3.5 If the Steering Committee determines in
accordance with Section 3.2.3 that Collaboration
Assets are to be acquired, Aurora shall *** of
the Collaboration; provided, however, that ***
such Collaboration Assets *** approved by the
Steering Committee) at the termination of the
Collaboration.
3.2.3.6 If the decision of the Steering Committee in
Section 3.2.3.4 would *** of the Collaboration
*** Third Party (i) the Steering Committee shall
fully consider whether the proposed transfer is
justified in reaching the goals of the
Collaboration by balancing the anticipated
benefits of such transfer and the availability
and cost of alternative means to obtain such
rights or services; and (ii) if a transfer of a
portion of downstream revenues is determined to
be appropriate, such transfer shall be shared
proportionately by the parties to the Agreement
in accordance with the agreed upon percentages
specified for sharing such benefits under
Sections 4.5.1 and 4.5.2 of this Agreement.
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3.2.4 Screening of Third Party Compounds. During the
Collaborative Period CFF may, with the written consent
of Aurora ***, have Aurora screen chemicals provided by
CFF and obtained with written permission from Third
Parties ***. Such chemicals shall be provided to Aurora
in accordance with the provisions of Section 3.2.5. Such
chemicals supplied by CFF or Third Parties will be
provided to Aurora in appropriate amounts in *** at a
concentration of *** in a *** plate with *** wells of
test chemicals, or in a *** plate with *** wells of test
chemicals, or such other format as is mutually agreed by
the Collaboration Committee. Aurora agrees not to
transfer such chemicals to any other Third Party, or to
use them for any purpose other than screening assays
developed under the Collaboration. CFF will exercise
good faith efforts to obtain from each relevant Third
Party *** with such Third Party chemicals to Aurora by
CFF or such Third Party within *** of completion of such
screening *** to CFF by Aurora or a mutually agreed upon
time *** that can be used to determine ***. The parties
agree that *** obtain the right to *** Aurora from each
such Third Party and *** information to Aurora *** that
can be used to ***. Aurora will return or destroy unused
chemicals upon written notice from CFF.
3.2.5 Development and Commercialization of Third Party
Compounds. Aurora, CFF and Third Party compound or
chemistry service suppliers (if any) will agree in
writing at the time of entering into any Third Party
agreement pursuant to Section 3.2.4 *** of Validated
Hits or Leads resulting from CF Assays or CF Related
Assays solely in the CF Field and/or the Pulmonary Field
under this Agreement, and that *** of Validated Hits or
Leads resulting from CF-Related Assays outside the CF
Field or the Pulmonary Field and commercial rights
thereto in accordance with Section 4.3. *** Aurora and
CFF will receive milestone and royalty payments or other
forms of consideration for rights to Development
Candidates or Products resulting from such Validated
Hits or Leads.
3.3. Research Milestones. In addition to the other payments in
accordance with this Agreement and in consideration for
achieving certain Collaboration objectives set forth below, CFF
will pay to Aurora the following non-refundable, non-creditable
research milestone payments:
3.3.1 Payments for Assay Development. CFF will pay assay
development milestones to Aurora upon ***. The
characteristics of the assays and associated data
required for evaluation as a CF Assay or CF-Related
Assay will be made available to CFF and the Chemistry
Advisory Group. Such assay(s) will *** validation and
payment of such milestone. The milestone amount for the
*** is *** dollars ($***) to be paid by CFF within ***
days of notice by Aurora that such assay ***. The
parties anticipate, subject to a greater understanding
of the biology and chemistry of CF Targets by the
parties, that during the Collaborative Period *** CF
Assays or CF-Related Assays ***. New CF Targets under
consideration, and a schedule for CF Target development
and implementation in screening, are and will be
described in the Work Plan. Validation of CF Assays and
CF-Related Assays is subject to the approval of the
Steering Committee after recommendation of the
Collaboration Committee using guidelines described in
the Agreement and such approval will take no longer than
*** days. The first such assay is likely to be ***
September 9, 1999 between the parties.
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3.3.2 Payments for Validated Hit Identification. CFF will pay
Validated Hit identification milestones to Aurora upon
the identification of each Validated Hit for a CF
Target, representing ***. The structures of Hits and
associated data will be made available solely to CFF and
the Chemistry Advisory Group *** as a Validated Hit.
Each such Validated Hit will *** identification and
payment of such milestone. The milestone amount for the
confirmation of each Validated Hit is:
*** dollars ($***) for *** Validated Hit for each of the
CF Targets;
*** dollars ($***) for *** Validated Hit for each of the
CF Targets; and
*** dollars ($***) for *** Validated Hit for each of the
CF Targets;
provided, however if CFF determines *** the screening
and compound characterization with *** CF Targets, upon
termination of the Collaboration, in addition to any
other payment due to Aurora in accordance with the terms
of this Agreement, CFF shall pay to Aurora the
difference, if any, between (1) the number of Validated
Hits multiplied by *** dollars ($***), but not to exceed
*** dollars ($***); and (2) the amount payable to Aurora
pursuant to this Section 3.3.2 without regard to this
provisio.
Such payments are to be paid to Aurora by CFF within ***
days of notice by Aurora of the confirmation of a
Validated Hit in accordance with this Agreement. The
parties anticipate, subject to a greater understanding
of the biology and chemistry of the CF Target by the
parties, that during the Collaborative Period a
sufficient number of Validated Hits will be generated to
produce *** Leads pursuant to Section 3.3.3.
Identification of each Validated Hit is subject to the
approval of the Steering Committee after recommendation
of the Collaboration Committee using guidelines
described in the Work Plan and such confirmation will
take no longer than *** days, or such longer period ***.
3.3.3 Payments for Lead Identification. CFF will pay Lead
identification milestones to Aurora upon the
identification of each Lead for a CF Target,
representing a compound that is active on such CF
Target. The structures of Validated Hits and associated
data will be made available solely to CFF and the
Chemistry Advisory Group for evaluation as a Lead. Each
such Lead will not be made available by Aurora to CFF or
a Third Party in any physical form prior to such
identification and payment of such milestone. The
milestone amount for the identification of each Lead is
*** dollars ($***) to be paid to Aurora by CFF within
*** days of notice by Aurora of the confirmation of a
Lead. The parties anticipate, subject to a greater
understanding of the biology and chemistry of the CF
Target by the parties, that during the Collaborative
Period *** Leads will be identified. Identification of
each Lead is subject to the approval of the Steering
Committee after recommendation of the Collaboration
Committee using guidelines described in the Work Plan
and such confirmation will take no longer than *** days,
or such longer period ***.
3.3.4 Payments for Development Candidate Identification. CFF
will pay Development Candidate identification milestones
to Aurora upon the *** for a CF Target, representing a
*** as a potential drug. The structures of Leads and
Derivatives and associated data will be
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made available solely to CFF and the Chemistry Advisory
Group for evaluation as a Development Candidate. Such
Development Candidate(s) will *** confirmation and
payment of such milestone. The milestone amount for the
identification of each Development Candidate is ***
dollars ($***) to be paid by CFF within *** days of
notice by Aurora of the confirmation of a Development
Candidate. The parties anticipate, subject to a greater
understanding of biology and chemistry by the parties,
that during the Collaborative Period and after the ***
anniversary of the Effective Date, *** Development
Candidates will be identified. Identification of each
Development Candidate is subject to the approval of the
Steering Committee after recommendation of the
Collaboration Committee using guidelines described in
the Work Plan and such confirmation will take no longer
than *** days, or such longer period ***.
3.3.5 Milestone Arbitration. CFF and Aurora will use good
faith efforts to evaluate achievement of a milestone
event set forth in Section 3.3. *** milestones set forth
in Section 3.3 the parties will *** within *** after the
parties determine that an agreement between them cannot
be reached *** in this Agreement. CFF and Aurora will
use good faith efforts to *** within *** of such
disagreement. ***, the parties will arbitrate as set
forth in Section 10.14.
3.3.6 Milestone Notification. Milestone notification by Aurora
will not occur prior to the completion of the approval
process as set forth in Sections 3.3.1 through 3.3.5.
4 COMMERCIALIZATION
4.1 Development of Products for the CF Field. *** in the development
and commercialization of Development Candidate(s), and CF
Product(s), in the CF Field for the treatment of CF, ***, for
which the milestones described in Section 3.3 and Section 4.4
have been paid to Aurora; provided, however *** in writing and
within *** days any prospective written agreement *** for the
development and commercialization of Development Candidate(s),
and CF Product(s), in the CF Field for the treatment of CF. Such
*** will terminate with respect to a Development Candidate or CF
Product after *** an agreement with a Third Party *** for the
commercialization of such Development Candidate or CF Product
for all of the CF Field, or *** years after the payment for the
corresponding Development Candidate milestone pursuant to
Section 3.3.3. After such date *** will continue *** the
development and commercialization of Development Candidate(s),
and Product(s) in the CF Field and *** will be required to ***
to enter into a written agreement in the CF Field; provided,
however that *** such written agreement must provide *** with no
less than *** days or other period of time mutually agreed upon
in writing to enter into a development and commercialization
agreement ***. *** includes the notice of, *** as soon as
reasonably possible, and the ***. It is anticipated that such
development and commercialization will be conducted *** is not
required to incur additional expense in this regard, although it
may elect to do so. *** in accordance with this Agreement, to
advance Development Candidate(s) and CF Product(s) in the CF
Field as expeditiously as practicable into clinical development.
4.2 Development of Products for the Pulmonary Field. *** the
development and commercialization of Development Candidate(s),
and Product(s) in the Pulmonary Field,
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*** for which the milestones described in Section 3.3 and
Section 4.4 have been paid; provided, however *** in writing and
within *** days any prospective written agreement *** for the
development and commercialization of Development Candidate(s),
and CF Product(s) in the Pulmonary Field. Such *** will
terminate with respect to a Development Candidate or CF Product
after *** an agreement with a Third Party *** for the
commercialization of such Development Candidate or CF Product
for all of the CF Field (whether in conjunction with all or a
portion of the Pulmonary Field), or *** years after the payment
for the corresponding Development Candidate milestone pursuant
to Section 3.3.3. After such date *** will continue *** the
development and commercialization of Development Candidate(s),
and Product(s) in the Pulmonary Field and *** will be required
to *** to enter into a written agreement in the Pulmonary Field;
provided, however that *** such written agreement must provide
*** with no less than *** days or other period of time mutually
agreed upon in writing to enter into a development and
commercialization agreement ***. *** will have *** a written
agreement *** for a Development Candidate or Product where such
written agreement *** a *** and a ***. *** includes the notice
of, *** as soon as reasonably possible, and the ***. It is
anticipated that such development and commercialization in the
Pulmonary Field will be conducted *** is required to incur
additional expense in this regard, although it may elect to do
so. ***
will *** in accordance with this Agreement to advance
Development Candidate(s) and Product(s) as expeditiously as
practicable into development.
4.3 Development of Products Outside both the CF Field and Pulmonary
Field. *** the development and commercialization of Development
Candidate(s) and Product(s), outside the CF Field, *** for which
the milestones described in Sections 3.3 and 4.4 have been paid.
It is anticipated that such development and commercialization
will be conducted *** not required to incur additional expense
in this regard, although it may elect to do so. *** use *** in
accordance with this Agreement to advance Development
Candidate(s) and Product(s) as expeditiously as practicable into
development, and in any case within *** years after the payment
of the milestone corresponding to the Development Candidate. If
a commercialization partner or licensee has not been identified
for any Development Candidate or Product for use outside the CF
Field or Pulmonary Field within such *** years, all rights will
*** for each such Development Candidate or Product.
4.4 Milestones Paid to Aurora. In the event CFF and/or its
licensees, licensors or collaborators succeeds in developing or
commercializing Development Candidate(s) or Product(s) resulting
from activities performed pursuant to this Agreement, CFF will
pay non-refundable and non-creditable amounts to Aurora as set
forth below:
When a Development Candidate or Product for the CF Field reaches
the following milestone events, CFF will promptly notify Aurora
of same, and within *** days of such notification, CFF will pay
Aurora the amount corresponding to such milestone.
<TABLE>
<CAPTION>
Milestone Event Amount ($US)
--------------- ------------
<S> <C>
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Initiation of Phase I Clinical Testing ***
Initiation of Phase III Clinical Testing ***
Submission of an NDA ***
</TABLE>
4.5 Downstream Revenue Capture by the Parties. In the event ***
succeeds in developing or commercializing Development
Candidate(s) or Product(s) resulting from activities performed
pursuant to this Agreement and for which the milestones
described in Section 3.3 and Section 4.4 were paid, the parties
will pay amounts as set forth below:
4.5.1 CF Field and Pulmonary Fields. *** on a *** all
consideration received by *** from a Third Party for
development rights and commercialization rights to any
Development Candidate, CF Product for the CF Field
resulting from a Hit from a CF Assay or a CF-Related
Assay, or Product for the Pulmonary Field resulting from
a Hit from a CF Assay or a CF-Related Assay. Such
consideration will be paid on a quarterly basis
consistent with Section 6. Such consideration includes
***; provided, however *** deduct from each quarterly
payment an amount equal to no more than *** of each such
payment for *** pass through obligations appurtenant to
such Development Candidate, CF Product, or Product;
provided, however that *** will not exceed a total of
*** dollars ($***). ***.
4.5.2 Outside the CF Field and Pulmonary Field ***. ***
percent (***%) of all consideration received by Aurora
from a Third Party for development rights and
commercialization rights to any Development Candidate or
Product outside the CF Field and Pulmonary Field
resulting from a CF-Field and CF-Related Assay. Such
consideration will be paid on a quarterly basis
consistent with Section 6. Such consideration includes
***; provided, however *** deduct from each quarterly
payment an amount equal to no more than *** of each such
payment for *** pass through obligations appurtenant to
such Development Candidate or Product. ***.
4.5.3 Expense Reports. The parties will provide each other
sufficient information to *** received as set forth in
Section 4.5.1 and 4.5.2.
5 LICENSING, INTELLECTUAL PROPERTY RIGHTS AND PROPERTY
5.1 *** License to CFF to Develop and Commercialize Products in the
CF Field. Aurora grants to CFF a ***, worldwide, sublicensable,
milestone and royalty bearing license under the Aurora Chemistry
Patents and Aurora Chemistry Technology to make, use, import,
export and sell Development Candidates and CF Products, for
which all payments described in Sections 3 and 4, including the
milestones described in Sections 3.3 and 4.4, have been paid,
for the CF Field. *** commercialize Development Candidates or
Products within *** years after the payment of the corresponding
milestone payment for a Development Candidate, CFF's *** will
terminate and no longer have any force or effect. Such license
is subject to the following: 1) on a Development
Candidate-by-Development Candidate basis such license will
become effective when milestones are paid by CF according to
Sections 3.3 and 4.4 and 2) ***.
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5.2 *** license to CFF to Develop and Commercialize Products in the
Pulmonary Field. Aurora grants to CFF a ***, worldwide,
sublicensable, milestone and royalty bearing license under the
Aurora Chemistry Patents and Aurora Chemistry Technology to
make, use, import, export and sell Development Candidates and
Products, for which all payments described in Sections 3 and 4,
including the milestones described in Section 3.3 and 4.4, have
been paid, in the Pulmonary Field. *** commercialize Development
Candidates or Products within *** years after the payment of the
corresponding milestone payment from a Development Candidate,
CFF's *** will terminate and no longer have any force or effect.
Such license is subject to the following: 1) on a Development
Candidate-by-Development Candidate basis such license will
become effective when milestones are paid by CF according to
Sections 3.3 and 4.4 and 2) ***.
5.3 CFF License to Aurora in the CF Field. In the event that CFF
Controls or owns rights to Compounds, Development Candidates and
Products required for Aurora to fulfill its obligations under
this Agreement, CFF grants to Aurora the right to make, use,
import, export and sell such Compounds and Products in the CF
Field and Pulmonary Field in accordance with this Agreement.
5.4 Control of Prosecution. CFF will be solely responsible for
deciding to file separate patent applications on Validated Hits
or Leads ***, and Development Candidates and Products in the CF
Field and all methods for treating CF developed hereunder for
the CF Field (and corresponding expenses). Patent applications
for Validated Hits and Leads that CFF determines to file ***
will be filed by Aurora for CFF which patent applications and
patents secured may be controlled by CFF pursuant to this
Section 5.4 if they become Development Candidates; provided,
however if CFF does not pay for milestones for such Development
Candidates, sole control of such patents and patent applications
will revert to Aurora and Aurora will then be responsible for
expenses incurred after such reversion date. CFF will have sole
responsibility and sole control, at CFF's expense, for the
filing, prosecution (including an opposition or interference)
and maintenance of such CF Field patents and patent applications
upon payment of Development Candidate milestones of Sections
3.3.4 and 4.4 for patent applications pursuing patent protection
of such Development Candidates and Products and the
pharmaceutical uses thereof for the CF Field; provided, however
that CFF and any licensee or successor in interest to such
applications covenants ***. Aurora will have sole responsibility
and sole control, at Aurora's expense, for the filing,
prosecution (including an opposition or interference) and
maintenance of patents and patent applications claiming Hits,
Leads, Development Candidates and Products and the
pharmaceutical uses thereof and any Inventions developed
hereunder for the Pulmonary Field *** (subject to CFF rights of
prosecution in this Section 5.4); provided, however CFF will
have the reasonable right to review and comment on patent
prosecution matters in the Pulmonary Field. The Parties will
provide each other with information developed under the
Collaboration that is necessary for the prosecution of patent
applications in the CF Field and Pulmonary Field pursuant to
this Section 5.4, for enforcement rights under Section 5.5 and
to satisfy any obligations under 37 C.F.R. ss.1.56 relating to
the duty of disclosure.
5.5 Control of Enforcement. CFF shall have the sole right, but not
the obligation, to bring proceedings against any Third Party for
the inappropriate use, including patent
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infringement, of Technology, or Patent Rights owned or
Controlled by it, or for which it has sole control of
prosecution according to Section 5.6, and at its own risk and
expense. Aurora, subject to CFF's right in the preceding
sentence, shall have the sole right, but not the obligation, to
bring proceedings against any Third Party for the inappropriate
use, including patent infringement, of Technology, or Patent
Rights owned or Controlled by it, or related to a Development
Candidate or Product developed under this Agreement, and at its
own risk and expense.
5.6 Zip-lock Licenses for DNA Constructs and Assays to Certain
Parties. Aurora will grant CFF and academic, institutional Third
Parties designated by CFF, during the Collaborative Period if
CFF terminates in accordance with Section 9.3 or for *** years
from the Effective Date, with Zip-lock Licenses solely in the CF
Field under the Aurora Patents and Aurora Technology, subject to
CFF's obligations herein (including the payments described in
Section 3) and the execution of appropriate *** with such Third
Parties. Such licenses are limited to one or more of the
following biological entities: *** developed by the parties
under this Agreement and paid for by CFF in the CF Field;
provided, however *** (including Development Candidates) are not
considered ***. For clarity, CFF and such academic,
institutional Third Parties will not be required to pay a
license fee for such Zip-lock Licenses and Aurora will provide
the *** to such Third Parties at Aurora's ***. Alternatively,
Aurora may be able provide these biological entities through a
Third Party, subject to certain license limitations similar to
the Zip-Lock License ***.
5.7 Option for Licenses for Aurora Chemicals to Certain Parties.
Aurora will provide academic, institutional Third Parties
designated by CFF with the following license:
"Aurora grants to such Third Party a non-exclusive
license under the Aurora Chemistry Patents and Aurora
Chemistry Technology, subject to CFF's obligations
pursuant to Aurora and CFF Agreement of May 2000, the
right to use Development Candidates ***."
Such grant to such Third Party is subject to an express, written
license agreement between Aurora and such Third Party that
includes customary limitations to secure and protect
intellectual property rights (including Patent Rights), a term
of up to *** and renewable if necessary and obligations of
confidentiality and assignment of all Inventions to Aurora. For
clarity, CFF and such academic, institutional Third Parties will
not be required to pay a license fee for such licenses, Aurora
will provide the Development Candidates at the expense of CFF
and such licenses are not sublicensable, or transferable.
5.8 Use and Ownership of Data and Technology. Subject to CFF's ***
licenses described in Sections ***, all results, data,
Inventions, Materials, assays, Technology, Compounds,
Development Candidates and Products generated for CFF arising
out of this Agreement will be owned exclusively by Aurora and
will be treated as Aurora Confidential Information, Aurora
Technology, Aurora Chemistry Technology, Aurora Patents or
Aurora Chemistry Patents, as the case may be and regardless of
inventorship. Subject to CFF's *** licenses described in this
Section ***, all such rights will be assigned to Aurora by CFF
and its agents, and CFF or its agents will promptly perfect the
same to Aurora and CFF will contractually obligate its agents to
assign such rights to Aurora.
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5.9 Limitations. Except as otherwise expressly provided in this
Section 5, 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,
copyrights, trademarks, trade secrets or Patent Rights owned or
Controlled by a party. All licenses granted herein do not
include the right to sublicense except as expressly stated in
Section 5. Except as expressly provided for in this Agreement,
nothing in this Agreement will be construed as a license or
sublicense by one party to the other of any rights in any
technology, copyrights, or patent rights owned or Controlled by
a party. All rights not expressly granted by Aurora in this
Section 5 are retained by Aurora. Licenses of Section 5 exclude
any rights under the Aurora Patents, Aurora Chemistry Patents,
Aurora Technology or Aurora Chemistry Technology outside of the
CF Field or Pulmonary Field.
6 PAYMENTS, ACCOUNTING FOR AND RECORDS FOR DOWNSTREAM REVENUES
6.1 Payment and Reporting. The milestones and other payments due
under Section 4 and as follows in this Section 6, will be paid
within *** days after the end of each calendar quarter period in
which such payments are earned during the Royalty Term for each
Product, as applicable. With each such quarterly payment CFF or
Aurora will furnish the other party a financial statement,
setting forth on a country-by-country basis: (i) list of Third
Parties that paid consideration to Aurora or CFF, as applicable,
in accordance with Section 4.5, (ii) total consideration
received from each such Third Party, and (iii) itemized
deductions for pass through obligations as described in Section
4.5.
6.2 Currency of Payment. All payments to be made under this
Agreement, including the milestones and downstream revenue
payments, paid by Aurora or CFF, as applicable, will be paid in
U.S. dollars by wire transfer or other mutually acceptable means
to a bank account designated in writing by the recipient.
Payments earned in Section 4.5 shall be determined in the
currency of the country in which they are paid and then
converted into dollars using the rate of exchange published by
Reuters Ltd. for the spot purchase of U.S. dollars at 7:15 a.m.,
Eastern Standard Time, on the third (3rd) banking day following
the receipt of such amount by the party obligated to pay under
this Section.
6.3 Records.
6.3.1 Downstream Revenues Calculations. During the Term and
for *** years from the date of each payment of under
Section 4.5, CFF and Aurora, as applicable, will keep
complete and accurate records of sales and all other
information necessary to calculate payment for each
Product sold by Aurora or CFF as the case may be in
sufficient detail to allow the accrued payments to be
determined accurately in accordance with GAAP. One
party, with reasonable written notice to the other
party, will have the right to cause an independent,
certified public accountant to audit such records not
more than once each year at the place or places of
business where such records are customarily kept in
order to verify the accuracy of the reports of
downstream revenue payments but only during normal
business hours. The auditing party will bear the full
cost of such audit unless such audit discloses an
underpayment of more than *** percent (***) from the
amount of the payments due under this Agreement, in
which event, the audited party
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will bear the reasonable cost of such audit. Such
accountant will disclose only whether the financial
reports are correct and the details of any
discrepancies. The auditing party will cause such
accountant to enter into a confidentiality agreement
with the audited party. Within *** (***) days of
notification by the auditing party of any underpayment
of downstream revenues, the audited party will notify
the auditing party whether it agrees with the conclusion
of such accountant. If the audited party agrees with the
conclusion of such account, such audited party will
remit to the auditing the amount of any such
underpayment. If such accountant concludes that the
audited party has made an overpayment of downstream
revenues under Section 4.6, the auditing party will so
notify the audited party. If the audited party agrees
with the conclusion of overpayment, the amount of such
overpayment will be credited toward any future payments
payable hereunder. If there is a disagreement, the
parties will resolve their dispute in accordance with
Section 10.14.
7 TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICITY
7.1 Confidentiality.
7.1.1 Subject to the terms and conditions of this Agreement,
CFF and Aurora each agree that, during the term of this
Agreement and for *** years thereafter, it will use best
efforts to keep confidential all Confidential
Information that is disclosed to it by the other party
in connection with the performance of this Agreement.
Neither CFF nor Aurora will use the other party's
Confidential Information except as expressly permitted
in this Agreement.
7.1.2 CFF and Aurora each agree that any disclosure of the
other's Confidential Information to any officer,
employee, contractor, consultant, sublicensee, or agent
of the other party will be made only if and to the
extent necessary to carry out its responsibilities under
this Agreement and to exercise the rights granted to it
hereunder, will be limited to the extent consistent with
such responsibilities and rights, and will be provided
only to such persons or entities who are bound to
maintain same in confidence in a like manner as the
party receiving same hereunder is so required. CFF's
Confidential Information will not be disclosed, without
CFF's written consent, in a patent application filed by
Aurora. Aurora's Confidential Information will not be
disclosed, without Aurora's written consent not to be
unreasonably withheld, in a patent application filed by
CFF. Each party, upon the other's request, will return
all the Confidential Information disclosed to it by the
other party pursuant to this Agreement, including all
copies and extracts of documents, within *** days of the
request of the other party following any termination of
this Agreement, except for one (1) copy which may be
kept for the purpose of ascertaining and complying with
continuing confidentiality obligations under this
Agreement.
7.1.3 Confidential Information will not include any
information which the receiving party can prove by
competent evidence:
i) is now, or hereafter becomes, through no
fault of the receiving party, generally known or
available;
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ii) is known by the receiving party at the time
of receiving such information, as evidenced by
its records;
iii) is hereafter furnished to the receiving
party without restriction as to disclosure or
use by a Third Party lawfully entitled to so
furnish same;
iv) is independently developed by the employees,
agents or contractors of the receiving party
without the aid, application or use of the
disclosing party's Confidential Information;
v) is the subject of a written permission to
disclose provided by the disclosing party; or
vi) is provided by the disclosing party to a
Third Party without restriction as to
confidentiality.
A party may also disclose Confidential Information of the other
where required to do so by law or legal process, provided that,
in such event, the party required to so disclose will give
maximum practical advance written notice of same to the other
party and will cooperate with the other party's efforts to seek,
at the request and expense of the other party, all confidential
treatment and protection for such disclosure as is permitted by
applicable law. The parties agree that the material financial
terms of this Agreement will be considered Confidential
Information of both parties. A party will have the further right
to disclose the material financial terms of this Agreement under
strictures of confidentiality to any potential acquirer, bona
fide potential strategic partner or collaborator, merger
partner, bank, venture capital firm, or other financial
institution to obtain financing with the consent of the other
party hereto. The parties agree that information applicable to
drug development for CF Targets in the CF Field and Pulmonary
Field and developed under the Collaboration will be considered
Confidential Information of both parties and will be subject to
the confidentiality requirements of this Section 7.1.
Notwithstanding the foregoing, Aurora may disclose and use
Confidential Information developed under the Collaboration for
use with CF Targets outside the CF Field and the Pulmonary Field
or inside the CF Field and the Pulmonary Field for non-CF
Targets in the course of its assay development and other service
activities under strictures of confidentiality to bona fide
customers or licensees.
7.2 Publication of Results. If either party desires to publish or
otherwise disclose the results and data obtained by the parties
in the course of the Collaboration, such party will provide a
copy of any such proposed public disclosure to the other party
at least *** calendar days prior to such disclosure. The other
party will have *** calendar days from the receipt of such
proposed public disclosure to object to the proposed disclosure
or any portion thereof (a) on the basis that it contains or
references unprotected patentable subject matter or (b) violates
any provision of this Agreement, including the confidentiality
provisions hereof or (c) is factually inaccurate.
Notwithstanding anything herein to the contrary, if such party
objects on the basis that the disclosure contains unprotected
patentable subject matter, the disclosing party will refrain
from making the disclosure for *** calendar days from the date
of the other party's objection in order to allow the other party
an opportunity to obtain proper legal protection for
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the subject matter contained in the proposed public disclosure.
In the event that the other party objects to any proposed public
disclosure on the basis that some or all of said disclosure
violates the confidentiality terms of this Agreement, ***. In
addition the parties agree to credit each other when a
publication is based in whole or in significant part of the
other party's Technology.
7.3 Publicity. Neither party may make any public announcement or
otherwise disclose the terms or milestone events of this
Agreement without the prior written consent of the other party,
which consent will not be unreasonably withheld. Upon execution
of this Agreement, the parties will issue a press release in the
form mutually agreed upon or a reasonable variant thereof. Any
additional press releases or public announcements with respect
to this Agreement or the transactions and activities
contemplated herein will be at such time and in such manner as
the parties will mutually agree upon.
8 WARRANTIES, INDEMNIFICATION AND LIABILITY
8.1 Mutual Representations and Warranties. The parties make the
following representations and warranties to each other:
8.1.1 Corporate Power. Each party hereby represents and
warrants that such party is duly organized and validly
existing under the laws of the state of its
incorporation and has full corporate power and authority
to enter into this Agreement and to perform its
obligations under the Agreement.
8.1.2 Due Authorization. Each party hereby represents and
warrants that such party (a) has the requisite power and
authority and the legal right to enter into the
Agreement and to perform its obligations hereunder; and
(b) has taken all necessary action on its part to
authorize the execution and delivery of the Agreement
and to authorize the performance of its obligations
hereunder and the grant of rights extended by it
hereunder.
8.1.3 Performance. Each party will exercise a standard of
professional practice that is consistent with the
practices of other entities performing like services or
activities.
8.2 CFF Indemnification. CFF hereby agrees to indemnify, defend and
hold Aurora, and its officers, directors, employees, and agents
(collectively, the "Aurora Indemnitees") harmless from and
against all damages or other amounts payable to a Third Party,
including reasonable attorneys' fees and costs of litigation,
resulting from a suit or claim brought by a Third Party against
a Aurora Indemnitee for ***. If an Aurora Indemnitee desires
indemnification from CFF, such Aurora Indemnitee will promptly
and in writing notify CFF of the same pursuant to this Section
8.2 and the circumstances surrounding such requested
indemnification and CFF will be entitled to assume sole control
of the defense or settlement; provided, however, that the Aurora
Indemnitee will be entitled to participate in the defense of
such matter and to employ counsel of its choosing and at its own
expense to provide assistance to CFF.
8.3 Aurora Indemnification. Aurora hereby agrees to indemnify,
defend and hold CFF, and its officers, directors, employees, and
agents (collectively, the "CFF Indemnitees") harmless from and
against all damages or other amounts payable to a Third Party,
including
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reasonable attorneys' fees and costs of litigation, resulting
from a suit or claim brought by a Third Party against a CFF
Indemnitee for i) any development, manufacture, use or sale of a
Development Candidate or Product by or through Aurora or its
Licensees, and ii) personal injury or property damage that was
caused by Aurora or by or to an Aurora employee or agent due to
the willful misconduct of Aurora or such Aurora employee or
agent in performance of this Agreement at CFF or Aurora; except
to the extent such damages or other amounts payable are
attributable to: (a) a violation of law and regulation or court
order by any CFF Indemnitee, or (b) any willful misconduct of
any CFF Indemnitee. If a CFF Indemnitee desires indemnification
from Aurora, such CFF Indemnitee will promptly and in writing
notify Aurora of the same pursuant to this Section 8.3 and the
circumstances surrounding such requested indemnification and
Aurora will be entitled to assume sole control of the defense or
settlement; provided, however, that the CFF Indemnitee will be
entitled to participate in the defense of such matter and to
employ counsel of its choosing and at its own expense to provide
assistance to Aurora.
8.4 Limitation of Liability and Warranty. NEITHER PARTY WILL BE
LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTIAL,
OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY. Except as expressly set
forth in this Section 8, the parties MAKE NO REPRESENTATIONS AND
EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED.
THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE
LICENSED PRODUCTS OR SERVICES WILL NOT INFRINGE ANY PATENT,
COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER EXPRESS OR
IMPLIED WARRANTIES.
9 TERM AND TERMINATION
9.1 Term. The Collaborative Period is defined as five (5) years,
unless mutually extended by the parties or terminated earlier
pursuant to Section 9.3. The term of this Agreement will
commence on the Effective Date and, unless terminated earlier as
provided in this Section 9 or extended by mutual written
agreement of the parties, continue in full force and effect
until the expiration of the downstream payments under this
Agreement ("Term").
9.2 Termination for Cause. Without limitation to pursue legal rights
in accordance with Section 10.14, either party will have the
right to terminate this Agreement at any time for a material
breach of this Agreement by the other party, provided that the
non-breaching party will have given the breaching party *** days
(*** days in the case of non-payment) written notice of the
breach and intention to terminate this Agreement in the absence
of a reasonable cure by the breaching party to the reasonable
satisfaction of the non-breaching party within such *** day
period. Such notice will specify the alleged conditions of
breach and contain notice of termination under this Section 9.2.
Any disagreements between the parties regarding the existence of
a breach, the rights and obligations of the parties hereunder or
liability to pay damages will solely be resolved in accordance
with Section 10.14.
9.3 Termination without Cause of the Collaboration Period. CFF may
terminate the
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Collaboration Period defined in this Agreement for any reason as
follows:
9.3.1 *** Effective Date with advance written notice to Aurora
*** days before the *** the Effective Date; provided,
however that Aurora has *** develop at *** and complete
*** prior to *** of the Collaboration Period;
9.3.2 In the event that Aurora successfully *** and *** and as
specified in the Work Plan prior to the *** anniversary
of the Effective Date as the case may be, CFF may
terminate the Collaboration Period by payment to Aurora
as follows:
9.3.2.1 *** dollars ($***) for termination before the
*** anniversary of the Effective Date;
9.3.2.2 *** dollars ($***) for termination before the
*** anniversary of the Effective Date; and
9.3.2.3 *** dollars ($***) for termination before the
*** anniversary of the Effective Date.
9.3.3 The parties will not have any further obligations under
the Collaboration after such termination. If CFF
provides notice of intent to terminate according to
Section 9.3.1 prior to the *** anniversary of the
Effective Date, and if after the date of CFF's notice of
such termination Aurora completes such obligations
specified in Section 9.3.1 then CFF may withdraw its
intent to terminate, or terminate in accordance with
Section 9.3.2 within *** days of Aurora's notice to CFF
that such obligations have been fulfilled.
9.4 Effect of Expiration or Termination. Expiration or termination
of this Agreement will not relieve the parties of any obligation
accruing prior to such expiration or termination. The
obligations and rights of the parties under Sections 4, 6, 7, 9
and 10 will survive termination or expiration of this Agreement.
Except as otherwise expressly provided in this Agreement, the
rights and obligations of the parties under Section 5 hereof
will terminate and be of no further force or effect whatsoever
upon any termination of this Agreement. After any termination of
Zip-Lock Licenses all transferred Materials under Zip-Lock
Licenses will be destroyed or transferred back to Aurora within
*** days.
10 MISCELLANEOUS
10.1 Assignment. Notwithstanding any provision of this Agreement to
the contrary, neither party may assign any of its rights or
obligations under this Agreement in any country to any Third
Party without the written consent of the non-assigning party
except that CFF may assign this Agreement to an entity that is
controlled by or under common control with CFF; provided,
however, that any such assignment will not relieve the assigning
party of its responsibilities for performance of its obligations
under this Agreement. Either party may also assign its rights
and obligations under this Agreement in connection with the sale
of all or substantially all of its assets, or may otherwise
assign its
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rights or obligations under this Agreement with the prior
written consent of the other party. This Agreement will survive
any merger or consolidation of either party with or into another
party and no consent for any such merger, consolidation or
similar reorganization will be required hereunder.
10.2 Binding Effect. This Agreement will be binding upon and inure to
the benefit of the successors and permitted assigns of the
parties. Any assignment not in accordance with this Agreement
will be void.
10.3 Force Majeure. Neither party will lose any rights hereunder or
be liable to the other party for damages or losses on account of
failure of performance by the defaulting party if the failure is
occasioned by war, fire, explosion, flood (including but not
limited to, floods caused by El Nino), earthquake, strike,
lockout, embargo, act of God, or any other similar cause beyond
the control of the defaulting party, provided that the party
claiming force majeure has exerted all reasonable efforts to
avoid or remedy such force majeure and thereafter takes all
reasonable steps to mitigate any such delay in performance
hereunder and any damages that may be incurred by the other
party thereby.
10.4 Notices. Any notices or communications provided for in this
Agreement to be made by either of the parties to the other will
be in writing, in English, and will be made by prepaid air mail
with return receipt addressed to the other at its address set
forth below. Any such notice or communication may also be given
by hand, by courier or by facsimile to the appropriate
designation. Notices will be sent:
If to CFF, to: Cystic Fibrosis Foundation
6931 Arlington Road, 2nd Floor
Bethesda, Maryland 20814
Attention: Robert J. Beall, PH.D.
President
Copy: Kenneth Schaner
3000 K Street NW
Washington, D.C. 20007
and
Melissa Ashlock, M.D.
6931 Arlington Road, 2nd Floor
Bethesda, Maryland 20814
If to Aurora, to: Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, CA 92121
Attention: Michael J. Dunn
Vice President,
Business Development
Copy: John Mendlein
General Counsel,
Chief Knowledge Officer
Either party may by like notice specify or change an address to which
notices and communications will thereafter be sent. Notices sent by
mail, facsimile or courier will be effective upon receipt and notices
given by hand will be effective when delivered.
10.5 Governing Law and Jurisdiction. This Agreement will be governed
by the laws of the State of California, without regard to its
rules of conflict of laws as such laws are applied to contracts
entered into and to be performed within such state.
10.6 Waiver. Except as specifically provided for herein, the waiver
from time to time by either of the parties of any of their
rights or their failure to exercise any remedy will not operate
or be construed as a continuing waiver of same or any other of
such party's rights or remedies provided in this Agreement.
10.7 Severability. If any term, covenant or condition of this
Agreement or the application thereof to any party or
circumstance will, to any extent, be held to be invalid or
unenforceable, then the remainder of this Agreement, or the
application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or
unenforceable, will not be affected thereby and each term,
covenant or condition of this Agreement will be valid and be
enforced to the fullest extent permitted by law; and
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the parties hereto covenant and agree to renegotiate any such
term, covenant or application thereof in good faith in order to
provide a reasonably acceptable alternative to the term,
covenant or condition of this Agreement or the application
thereof that is invalid or unenforceable, it being the intent of
the parties that the basic purposes of this Agreement are to
effectuated.
10.8 Independent Contractors. It is expressly agreed that Aurora and
CFF will be independent contractors and that the relationship
between the two parties will not constitute a partnership or
agency of any kind. Neither Aurora nor CFF will have the
authority to make any statements, representations or commitments
of any kind, or to take any action, which will be binding on the
other, without the prior written authorization of the party to
do so.
10.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
10.10 Entire Agreement. This Agreement between the parties (including
all Exhibits) sets forth all of the covenants promises,
agreements, warranties, representations, conditions and
understandings between the parties hereto, and supersedes and
terminates all prior agreements and understanding between the
parties, with respect to the subject matter hereof. There are no
covenants, promises, agreements, warranties, representation
conditions or understandings; either oral or written, between
the parties other than as set forth herein and therein. No
subsequent alteration, amendment, change or addition to this
Agreement will be binding upon the parties hereto unless reduced
to writing and signed by the respective authorized officers of
the parties. This Agreement will not be strictly construed
against either party hereto. Any conflict between the terms set
forth in the text of this Agreement and the terms of any Exhibit
hereto will be resolved in favor of the text of this Agreement.
The written agreement between the parties of September 9, 1999
will be terminated as of the Effective Date of this Agreement
and such prior agreement will no longer have any force or
effect.
10.11 No Third Party Beneficiaries. No Third Party, including any
employee of any party to this Agreement when acting within the
scope of his or her employment, will have or acquire any rights
by reason of this Agreement. Nothing contained in this Agreement
will be deemed to constitute the parties partners with each
other or any third party.
10.12 Advice of Counsel. This Agreement has been negotiated by the
parties and their respective counsel and will be fairly
interpreted in accordance with its terms and without application
of any rules of construction relating to which party drafted the
Agreement being applied in favor or against either party.
10.13 Construction. The term "Section" can refer to any single
paragraph level found therein or any collection of multiple
paragraphs within such Section.
10.14 Dispute Resolution. The parties recognize that disputes as to
certain matters may from time to time arise during the term of
this Agreement which relate to either party's rights and/or
obligations hereunder. It is the objective of the parties to
establish procedures
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to facilitate the resolution of disputes arising under this
Agreement in an expedient manner by mutual cooperation and
without resorting to arbitration. The parties agree that prior
to any arbitration concerning this Agreement, a member of CFF's
senior management and Aurora's president will meet in person or
by video-conferencing in a good faith effort to resolve any
disputes concerning this Agreement. Within *** of a formal
request by either party to the other, any party may, by written
notice to the other, have such dispute referred to their
respective officers designated or their successors, for
attempted resolution by good faith negotiations, such good faith
negotiations to begin within *** after such notice is received.
Any dispute arising out of or relating to this Agreement which
is not resolved between the parties or the designated officers
of the parties pursuant to Section 10.14 will be resolved by
final and binding arbitration conducted in *** under the then
current Licensing Agreement Arbitration Rules of the American
Arbitration Association ("AAA"). The arbitration will be
conducted by three (3) arbitrators who are knowledgeable in the
subject matter which is at issue in the dispute. One arbitrator
will be selected by CFF and one arbitrator will be selected by
Aurora and the third arbitrator will be appointed by the AAA. In
conducting the arbitration, the arbitrator will determine what
discovery will be permitted, consistent with the goal of
limiting the cost and time which the parties must expend for
discovery (and provided that the arbitrators will permit such
discovery they deem necessary to permit an equitable resolution
of the dispute), and will be able to decree any and all relief
of an equitable nature, including but not limited to such relief
as a temporary restraining order, a preliminary injunction, a
permanent injunction, specific performance or replevin of
property. The arbitrators will also be able to award actual or
general damages, but will not award any other form of damage
(e.g., consequential, punitive or exemplary damages). During the
course of the arbitration neither party may terminate the
Agreement for the cause giving rise to such arbitration, halt
payments, curtail research or otherwise fail to perform its
obligations under this Agreement. The parties will share equally
the arbitrator's fees and expenses pending the resolution of the
arbitration unless the arbitrators require the non-prevailing
party to bear all or any portion of the costs of the prevailing
party. The decision of the arbitrators will be final and may be
sued on or enforced by the party in whose favor it runs in any
court of competent jurisdiction at the option of such party.
Notwithstanding anything to the contrary in this Section 10,
either party may seek immediate injunctive or other interim
relief from any court of competent jurisdiction with respect to
any breach of Sections 6, or 7 hereof, or otherwise to enforce
and protect the patent rights, copyrights, trademarks, or other
intellectual property rights owned or Controlled by such party.
In no event will a demand for arbitration be made after the date
when the institution of a legal or equitable proceeding based on
such claim, dispute or other matter in question would be barred
by the applicable statute of limitations.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
CYSTIC FIBROSIS FOUNDATION AURORA BIOSCIENCES CORPORATION
By: By:
Name: Robert J. Beall, Ph.D. Name: Stuart J.M. Collinson, Ph.D.
Title: President Title: President & Chief Executive Officer
Date: Date:
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EXHIBIT 1
DEFINITIONS
As used in this Agreement, the following terms will have the following meanings:
"Agreement" means this agreement, together with all appendices, exhibits
and schedules hereto, and as the same may be amended or supplemented
from time to time hereafter by a written agreement duly executed by
authorized representatives of each party hereto.
"Aurora Chemicals" means compounds owned or Controlled by Aurora *** for
by CFF as set forth in Section 3.3.4, which may be amended by mutual
written consent.
"Aurora Chemistry Patents" means 1) Patent Rights owned or Controlled by
Aurora as set forth in Exhibit 5.1 for Aurora Chemicals and 2) Patent
Rights for Aurora Chemicals owned or Controlled by Aurora and developed
solely under this Agreement; both of which are set forth in Exhibit 5.1
and may be amended by mutual written consent.
"Aurora Chemistry Technology" means 1) Technology owned or Controlled by
Aurora for Aurora Chemicals and 2) Technology for Aurora Chemicals owned
or Controlled by Aurora developed solely under this Agreement; both of
which are set forth in Exhibit 5.1 and may be amended by mutual written
consent.
"Aurora Patents" means Patent Rights owned or Controlled by Aurora as
set forth in Exhibit 5.6A, and Patent Rights owned or Controlled by
Aurora developed solely under this Agreement and may be amended by
mutual written consent.
"Aurora Technology" means Technology owned or Controlled by Aurora as of
the Effective Date as set forth in Exhibit 2.3.8, and Technology owned
or Controlled by Aurora developed solely under this Agreement and may be
amended by mutual written consent.
"***" means the percentage increase or decrease in the average of the
following and not to exceed *** on an annual basis: 1) CPI (Consumer
Price Index) for the year preceding such adjustment and 2) salaries for
research scientists *** for the year preceding such adjustment and using
the year 2000 as the base year.
"CF" means Cystic Fibrosis, a genetic disorder of the CFTR gene that
results in improperly regulated fluid secretion in the lungs and other
exocrine tissues and its sequellae in patients with such genetic
disorder.
"CF Assay" means ***.
"CF-Related Assay" means a ***.
"CF Field" means for the discovery, development and treatment of CF ***.
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"CF Product" means a Product licensed from Aurora to CFF under this
Agreement in the CF Field under Section 5.1.
"CF Target" means a ***.
"Chemistry Advisory Group" means an independent Third Party mutually
agreed upon in writing by CFF and Aurora to advise CFF regarding assay
development, milestone achievement, in vivo testing, Validated Hits,
Lead prioritization and optimization, and Development Candidate
selection and development; provided, however such Third Party is
obligated in writing to CFF and Aurora to a confidentiality and
proprietary inventions agreement and covenants to use any Aurora
Confidential information solely for the Collaboration.
"Collaboration" means the research alliance between the CFF and Aurora
directed to the discovery of novel therapeutics for CF during the
Collaborative Period.
"Collaboration Assets" is defined in Section 3.2.3.
"Collaboration Committee" means a committee comprised of up to ***
representatives appointed by CFF (any Third Party representatives are
required to be under a confidential disclosure and proprietary
inventions agreement with Aurora), and up to *** representatives
appointed by Aurora; *** of whom from each party will be voting members.
"Collaboration Manager" means the lead contact person to the Steering
Committee designated by Aurora and subject to the approval of the
Steering Committee.
"Collaborative Period" means the period of time that begins on the
Effective Date and continues until the day preceding the *** anniversary
of the Effective Date, unless extended by mutual written agreement of
the Parties, or terminated earlier in accordance with Section 9.
"Compound" means any molecule provided by Aurora or CFF in accordance
with this Agreement ***.
"Confidential Information" means all information, data, and Materials
received by either party from the other party pursuant to this Agreement
and all information, data, and Materials developed in the course of the
collaboration and/or activities of the parties under this Agreement,
including, without limitation, Technology of each party, subject to the
exceptions set forth in Section 7.1.3.
"Control" or "Controlled" means, with respect to tangible and
intellectual property, possession by a party 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 any
Third Party.
"Derivative" means a ***.
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"Development Candidate" means any Lead or Derivative that is *** by the
Steering Committee after recommendation by the Collaboration Committee
for clinical development under this Agreement and that demonstrates
substantially the following:
1. ***;
2. ***;
3. ***;
4. ***; and
5. ***.
In the event that a Lead or Derivative reaches an IND submission without
designation as a Development Candidate, such Lead or Derivative will be
deemed a Development Candidate for purposes of this Agreement.
"Effective Date" means May 19, 2000.
"FDA" will mean the United States Food and Drug Administration, or any
successor agency having regulatory jurisdiction over the manufacture,
distribution and sale of drugs in the United States or equivalent
governmental agency or authority in any other jurisdiction.
"FTE" or "Full Time Equivalent" will mean the full time equivalent of
one (1) Aurora or contracted researcher, based on a minimum effort of
*** hours per year, and charged at a rate of *** dollars ($***) per
year; as adjusted by the ***.
"Hit" means any Compound that demonstrates activity in a CF-Related
Assay or CF Assay developed under the Collaboration *** and demonstrates
substantially the following:
1. ***.
2. ***.
3. ***.
4. ***.
"IND" means an Investigational New Drug application filed with and
accepted by the FDA or any corresponding application filed in any
country other than the United States or the first administration of a
Development Candidate into a human subject.
"Invention" means any new and useful idea or discovery, including
without limitation a new and useful process, machine, manufacture, or
composition of matter, or improvement thereto, whether or not
patentable.
"Know-How" means information and data that is not generally known to the
public, including, but not limited to: Inventions, designs, concepts,
algorithms, formulae, software, techniques, practices, processes,
methods, knowledge, skill, experience, expertise and technical
information.
"Lead" means a ***:
***
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"Materials" means any ***.
"Milestone Arbitrator" means an independent Third Party mutually agreed
upon in writing by CFF and Aurora *** and such Third Party will have a
confidential and proprietary inventions agreement with Aurora.
"NDA" means a New Drug Application or the equivalent, and all
supplements pursuant to the requirements of the FDA, including all
documents, data and other information concerning Products which are
necessary for FDA approval to market a Product, or the equivalent
governmental approval in any other country.
"Patent Rights" means all U.S. or foreign (including regional
authorities such as the European Patent Office) regular or provisional
patent applications, including any continuation, continuation-in-part,
or division thereof or any substitute application therefor or equivalent
thereof, and any patent issuing thereon, including any reissue,
reexamination or extension thereof and any confirmation patent or
registration patent or patent of additions based on any such patent,
containing one or more claims to an Invention (and in the case of an
issued patent, containing one or more Valid Claims), and which a party
hereto owns or Controls, individually or jointly, any title thereto or
rights thereunder.
"Pulmonary Field" means discovery, development and treatment of disease
in human pulmonary tract or lungs ***.
"Product" means any pharmaceutical product that incorporates a
Development Candidate paid for by CFF as an ingredient.
"Steering Committee" means a committee comprised of *** members
appointed by CFF and *** members appointed by Aurora, (of which *** from
each group will also be members of the Collaboration Committee).
"Technology" means Materials and Know-How.
"Term" means the time period defined in Section 9.1.
"Third Party" means any entity other than Aurora and CFF.
"Valid Claim" means: ***.
"Validated Hit" means a Hit that substantially demonstrates:
1. ***;
2. ***;
3. ***; and
4. ***.
"Work Plan" means the mutually agreed upon written plan attached as
Exhibit 2, as amended in writing from time to time by the parties hereto
through the Collaboration Committee and
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approved by the Steering Committee, outlining drug discovery projects
and research within the Collaboration during the Collaborative Period;
provided, however that Work Plan may be amended through the
Collaboration Committee without execution of an Amendment by the parties
when such amendments are within the scope of the prior Work Plan.
"Zip-lock License" means the license in Exhibit 5.6B.
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EXHIBIT 2.1
***
EXHIBIT 2.3.8
AURORA TECHNOLOGY
***
EXHIBIT 3.2.2
***
EXHIBIT 5.1
***
EXHIBIT 5.6 A
***
EXHIBIT 5.6B
ZIP-LOCK LICENSE
***
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