<PAGE> 1
EXHIBIT 10.37
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 506 of the Securities Act of 1933, as amended.
CUSTOM SYNTHESIS
DEVELOPMENT AND SUPPLY AGREEMENT
By and Between
MERCK & CO., INC.
and
ARRAY BIOPHARMA INC.
--------------------------------------------------------------------------------
This Agreement (the "Agreement") confirms the mutual understanding by and
between Merck & Co., Inc., a corporation organized and existing under the laws
of the State of New Jersey with its principal place of business at One Merck
Drive, Whitehouse Station, NJ 08889 ("MERCK"), and Array BioPharma Inc., a
corporation organized and existing under the laws of the State of Delaware with
a place of business at 1885 33rd Street, Boulder, Colorado 80301 ("ARRAY").
WHEREAS, ARRAY has the ability and expertise to prepare collections of drug-like
small molecule compounds which are amenable to high-speed synthesis ("Custom
Libraries"); and
WHEREAS, MERCK desires for ARRAY to annually synthesize a certain number of
Custom Libraries solely for MERCK on an exclusive basis.
NOW THEREFORE, MERCK AND ARRAY agree as follows:
1. Purpose: Following execution of this Agreement, MERCK shall identify Custom
Libraries it would like ARRAY to synthesize. ARRAY agrees to diligently
perform services for the purpose of synthetically preparing such Custom
Libraries for MERCK (the "Services").
2. Library Design Committee: Within thirty days of the Effective Date of this
Agreement, the parties shall form a Library Design Committee ("LDC")
comprised of two representatives from each party.
(a) MERCK shall submit all requests for the development of Custom
Libraries to the LDC. The LDC shall review all MERCK requests, advise
regarding the feasibility of such requests, and approve and/or modify
such requests where reasonable.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 506 of the Securities Act of 1933, as amended.
<PAGE> 2
(b) The LDC shall meet every other month, at ARRAY's offices in Boulder,
Colorado, to review the ongoing status and any scientific issues
raised by the Services performed hereunder.
(c) The parties agree that they will cooperate to reasonably resolve any
scientific disputes related to the development of Custom Libraries. In
the event that the parties cannot reasonable resolve any such
disputes, the LDC shall meet to try to reach a final resolution.
3. Materials: MERCK shall provide to ARRAY such non-commercially available
materials in MERCK's internal collection necessary for Array to perform the
Services. Additionally, Merck shall be responsible for providing or
reimbursing (if approved by MERCK prior to purchase) Array for all other
reagents which are necessary for the synthesis of any requested Custom
Libraries (the aforementioned "non-commercially available materials and the
reagents provided or paid for by MERCK shall hereinafter be "Materials").
These Materials are not to be used in humans. It is understood that such
materials are provided solely for the Services being performed hereunder
and shall not be used for any other purpose nor shall such samples or any
derivatives, analogs, modifications or components thereof be transferred,
delivered or disclosed to any third party without the advance written
consent of MERCK. Any unused Materials shall be returned to MERCK promptly
upon completion of such Services or otherwise disposed of in accordance
with instructions from MERCK.
4. Custom Library Supply:
(a) ARRAY shall develop and provide approximately [ * ] Custom Libraries
for MERCK each year. Each compound provided within a Custom Library
shall be provided in [ * ] mg amounts and in two sets of vials
provided by MERCK. The number of compounds per Custom Library will
vary; but ARRAY hereby agrees to synthesize approximately [ * ]
compounds per year with approximately [ * ] compounds per Custom
Library.
(b) The Custom Libraries generated hereunder and all compounds included
therein shall be the sole and exclusive property of MERCK. ARRAY shall
deliver to MERCK, each Custom Library [ * ] of the requested amount
for each compound within a Custom Library, accompanied by a writing,
in English, describing the step-wise synthetic procedure to prepare
each compound within the Custom Libraries ("Product Report"), HPLC
analysis (detection technique to be determined by the LDC on a Custom
Library by Custom Library basis) and mass spectral (MS) analyses to
prove chemical identity and confirm minimum purity of [ * ] and an
average purity of at least [ * ]. MERCK shall have no obligation to
accept or pay for any Custom Libraries for which any of this data is
not provided.
(c) [ * ]
[ * ] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE> 3
5. Term: The Term of this Agreement shall be [ * ] years with the Services
commencing on [ * ] (the "Effective Date") and ending on [ * ], unless
sooner terminated pursuant to Article 15 herein.
6. Amount: Each time MERCK requests the development of a Custom Library, MERCK
shall pay a non-refundable except as provided under Article 15(b)(2),
process development fee, of [ * ] per compound, for such Custom Library.
ARRAY shall have no obligation to develop or provide Custom Libraries which
are not approved by the LDC pursuant to Article 2(a). MERCK shall have no
obligation to make any payment hereunder until its Custom Library Request
is approved by the LDC pursuant to Article 2(a). Within thirty days after
receipt of any Custom Library compound(s), MERCK shall pay ARRAY an
additional and final amount of [ * ] per compound meeting the
specifications set forth herein. If MERCK fails to notify ARRAY within
thirty days of its receipt of compound(s) that such compounds do not meet
the applicable specifications, then such compound(s) shall be deemed
accepted. Within thirty days after receiving the remaining compound(s) for
each Custom Library and the Product Report, MERCK shall pay ARRAY an
additional and final amount of [ * ] per compound meeting the
specifications set forth herein in such final Custom Library delivery. If
MERCK fails to notify ARRAY within thirty days of its receipt of a final
Custom Library delivery and Product Report , that such Custom Library
compound(s) do not meet the applicable specifications or that the Product
Report is incomplete, then such Custom Library compounds and Product Report
shall be deemed accepted. MERCK shall have no obligation to make any
payments whatsoever or bear any costs or expenses for any Custom Libraries
other than those set forth hereunder. Additionally, MERCK shall pay ARRAY
for [ * ], quarterly in advance, starting on the Effective Date at an
annual rate per FTE of [ * ]. All fees and schedule payments to Array shall
be adjusted on an annual basis to reflect the aggregate increase in the
Producer Price Index for Pharmaceutical Manufacturers (Table 3 - Producer
Price Indexes for Selected Commodity Groupings Unadjusted Index Commodity
Code 06-3) during the preceding year.
7. Confidentiality: ARRAY agrees to keep confidential and not to use, except
for the purpose described in Article 1 above, all information supplied by
MERCK and all information, reports and Custom Libraries generated by ARRAY
as a result of the Services performed hereunder. These obligations of
confidentiality and non-use shall continue at all times beyond the term of
this Agreement. This Agreement shall not restrict ARRAY's use or disclosure
of information which (i) is in the public domain by use and/or publication
before its receipt from MERCK; (ii) was already in ARRAY's possession prior
to receipt from MERCK, except if such information was received or developed
under a prior agreement with MERCK; (iii) is properly obtained by ARRAY
from a third party which has a valid legal right to disclose such
information to ARRAY and is not under a confidentiality obligation to
MERCK; or (iv) is required to be disclosed by a Court of competent
jurisdiction provided ARRAY gives MERCK prompt notice of such disclosure
requirement.
[ * ] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE> 4
8. Reports/ Use of Information: ARRAY shall provide MERCK with written reports
on a monthly basis for each of the Custom Libraries, and the Product Report
upon delivery of each Custom Library as outlined in Articles 4 and 6 of
this Agreement.
[ * ]
9. [ * ]
10. Compliance with Law: ARRAY shall conduct the Services in accordance with
all applicable laws, rules and regulations, including without limitation,
all current governmental regulatory requirements concerning Good Laboratory
Practices. ARRAY hereby certifies that it will not or has not employed or
otherwise used, in performing the Services, any person debarred under
Section 306 (a) or (b) of the Federal Food, Drug and Cosmetic Act.
[ * ] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE> 5
11. Limitation of Liability: MERCK assumes no responsibility and shall have no
liability for the conduct of the Services, testing or other work performed
by ARRAY under this Agreement. Notwithstanding the foregoing, ARRAY assumes
no responsibility and shall have no liability for any use or other
disposition of the compound(s) by MERCK or its Affiliates.
12. Indemnification
(a) ARRAY hereby agrees to indemnify, defend and hold harmless, MERCK, its
subsidiaries and Affiliates and their respective officers, employees
and directors against any and all claims for liability, loss, damages,
costs or expenses (including attorneys' fees and expenses and costs of
investigation) brought by a third party, which any of them may incur,
suffer or be required to pay as the result of any damage suffered or
alleged to be suffered, including, without limitation, death or
personal injury and any direct, consequential, special and/or punitive
damages, which result from the gross negligence or willful misconduct
of ARRAY in the course of performing the Services performed by ARRAY,
hereunder, provided, however, that such loss, liability or damage is
not attributable to the fraud, gross negligence, or willful misconduct
of MERCK.
(b) MERCK hereby agrees to indemnify, defend and hold harmless, ARRAY, its
subsidiaries and Affiliates and their respective officers, employees
and directors against any and all liability, loss, damages, costs or
expenses (including attorneys' fees and expenses and costs of
investigation) which any of them may incur, suffer or be required to
pay as the result of any damage suffered or alleged to be suffered,
including, without limitation, death or personal injury and any
direct, consequential, special and/or punitive damages, for claims
that result from the commercialization (including Product Liability)
by MERCK of any compound(s) delivered by ARRAY, hereunder, provided,
however, that such loss, liability or damage is not attributable to
the fraud, gross negligence, or willful misconduct of ARRAY.
13. Use of Name: Neither party shall use the name, trade name, trademark or
logo of the other party in any publicity, news releases or advertising
related to this Agreement or the subject matter hereof without the prior
written consent of the other party. Subject to the foregoing, ARRAY may
issue a one-time press-release, (a copy of which is attached hereto as
Exhibit A) regarding this Agreement and the Services provided to MERCK,
hereunder. Such press-release shall be subject to MERCK's prior review and
approval. Thereafter, ARRAY may discuss the specific content of the
original press-release with third parties without advance written consent
from MERCK, but ARRAY may not issue any other press-release(s) or issue any
publicity or advertising using Merck's name, trade name, trademarks or
logo, except as expressly stated herein, without the prior written consent
of MERCK.
[ * ] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE> 6
14. Governing Law: This Agreement shall be governed by the laws of the State of
New Jersey and the United States as applicable herein.
15. Termination:
(a) Following the [ * ] anniversary of this Agreement, MERCK may terminate
this Agreement at any time, upon [ * ] written notice. [ * ] following
the date that the termination notice is sent shall be considered the
"Termination Date." MERCK will have no further financial obligations
to ARRAY following the Termination Date.
(b) Either party may terminate this Agreement, at any time, for cause,
upon [ * ] written notice if such non-conforming performance is not
cured within such [ * ] period. In such event:
(1) [ * ]; and
(2) [ * ]
(c) [ * ]
16. Assignment: [ * ]
17. Force Majeure: Neither party shall be held liable or responsible to the
other party nor be deemed to have defaulted under or breached the Agreement
for failure or delay in fulfilling or performing any term of the Agreement
when such failure or delay is caused beyond the reasonable control of the
affected party such as fire, floods, embargoes, war, acts of war,
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in
[ * ] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE> 7
acting by any governmental authority or the other party. The affected party
shall notify the other party of such force majeure circumstances as soon as
reasonably practical.
18. Contacts: All notices which are required or permitted hereunder shall be in
writing and sufficient if sent by e-mail, telecopier or
nationally-recognized overnight courier or sent by registered or
certified-mail, postage prepaid, and addressed as follows:
If to MERCK: Merck & Co., Inc.
Attn: Office of the Secretary
One Merck Drive
Whitehouse Station, NJ 08889
With a copy to: [ * ]
If to ARRAY: Array BioPharma, Inc.
Attn: Chief Operating Officer
1885 33rd Street
Boulder, CO 80301
19. Entire Agreement: This Agreement constitutes the entire agreement between
the parties with regard to the Custom Library Services provided by ARRAY
hereunder. All express or implied agreements and understandings, either
oral or written, heretofore made are expressly merged in and made a part of
the Agreement. The Agreement may be amended, or any term hereof modified,
only by a written instrument duly executed by both parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives, effective as of the later date set forth
below.
MERCK & CO., INC. ARRAY BIOPHARMA, INC.
By: /s/ Edward M. Scolnick, M.D. /s/ David Snitman
---------------------------- ----------------------------
Title: President Chief Operating Officer
---------------------------- ----------------------------
Date: 9/6/00 8/22/00
---------------------------- ----------------------------
[ * ] Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE> 8
Exhibit A
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 506 of the Securities Act of 1933, as amended.
