AMENDED AND RESTATED TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

EXHIBIT 10.27

 

AMENDED AND RESTATED TECHNOLOGY TRANSFER AND LICENSE

AGREEMENT

 

by and between

 

CURAGEN CORPORATION

 

and

 

454 CORPORATION

 

June 24, 2003

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

TABLE OF CONTENTS

 

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

i

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

ii

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

iii

AMENDED AND RESTATED

TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

 

THIS AMENDED AND RESTATED TECHNOLOGY TRANSFER AND LICENSE AGREEMENT (this “ Agreement ”) is dated as of June 24, 2003 (the “ Restated Effective Date ”) and is made by and between CuraGen Corporation, a Delaware corporation (“ CuraGen ”), and 454 Corporation, a Delaware corporation (“ 454 ”).

 

RECITALS

 

WHEREAS, 454 was formed to develop and exploit certain technology, methods and software developed at CuraGen for DNA-based analysis; and

 

WHEREAS, pursuant to the terms of the Technology Transfer and License Agreement dated as of June 6, 2000 by and between CuraGen and 454 (the “ Original Agreement ”), CuraGen exclusively licensed to 454 certain technology related to DNA-based analysis and certain improvements to such technology made and/or obtained by CuraGen for 454 to design, produce and sell equipment, instrumentation and reagents for DNA-based analysis in the 454 Field (as defined below) and 454 granted to CuraGen certain preferential access to such instrumentation, reagents and technology and certain improvements to such technology made by 454 for CuraGen to use in the CuraGen Field (as defined below); and

 

WHEREAS, the parties hereto wish to amend the Original Agreement to, inter alia , expand the permissible activities contemplated by the 454 Field, and to provide for the payment of a royalty by 454 to CuraGen in connection with 454’s providing of certain Sequencing Services (as defined below) and;

 

WHEREAS, the parties wish to set forth in a single document the terms and conditions of the Original Agreement, as so amended.

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CuraGen and 454 agree as follows:

 

ARTICLE 1. DEFINITIONS

 

All capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth below.

 

1.1 “ Affiliate ” means any corporation, firm, limited liability company, partnership or other entity which directly or indirectly controls or is controlled by or is under common control with a party. For purposes of this Section 1.1 of this Agreement, “ control ” means ownership, directly or through one or more Affiliates, of more than fifty percent (50%) of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or more than fifty percent (50%) of the equity interests in the case of any other type of legal entity, status as a

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

general partner in any partnership, or any other arrangement whereby a party controls or has the right to control the Board of Directors or equivalent governing body of a corporation or other entity.

 

1.2 “ Beta Site Agreement ” has the meaning set forth in Section 2.2.2.

 

1.3 “ Confidential Information ” means the Core Technology and the prosecution files pertaining to the Core Patent Rights (both of which shall be deemed to be Confidential Information of 454), all proprietary information of 454, including 454’s business plans, mission, vision, specific technology, employees, advisors and consultants, all information concerning the terms of this Agreement and any other information which is disclosed by one party (the “disclosing party”) to the other party (the “receiving party”) pursuant to this Agreement. Notwithstanding the foregoing, Confidential Information shall not include information which: (a) is available to the public at the time of disclosure or becomes publicly known through no breach by the receiving party of the undertakings hereunder; (b) is disclosed, without restriction on further disclosure or use to the receiving party by a Third Party having a lawful right to make such disclosure; (c) the receiving party can establish by reasonable proof was in its possession at the time of disclosure or was subsequently and independently developed by employees of the receiving party who had no knowledge of the information disclosed; (d) is reasonably necessary to file or prosecute patent applications, to apply for regulatory approval to test or market products or services, or to prosecute or defend litigation so long as the receiving party uses reasonable efforts to secure confidential treatment when available; or (e) is approved for release by written authorization of the disclosing party. Notwithstanding the foregoing, the exception set forth in clause (c) above shall not apply to the Core Technology or the prosecution files pertaining to the Core Patent Rights.

 

1.4 “ Control ” or “ Controlled ” means with respect to any Technology, the possession by a party of the ability to grant a license or sublicense of such Technology as provided herein without violating the terms of any agreement or arrangement between such party and any Third Party.

 

1.5 “ Core Know-How ” means Technology Controlled by CuraGen as of the Effective Date relating to the use of any invention claimed in the Core Patent Rights.

 

1.6 “ Core Patent Rights ” means the provisional patent applications owned in whole or in part by CuraGen on the Effective Date that are listed on Schedule A attached hereto; any patent claims filed by CuraGen claiming inventions included in such provisional patent applications; patents issuing from such patent claims; and all divisionals, continuations, continuations-in-part (but solely to the extent directed to claims included in such provisional patent applications), divisions and renewals, all letters patent granted thereon, and all reissues, reexaminations and extensions thereof.

 

1.7 “ Core Technology ” means the Core Know-How and Core Patent Rights.

 

1.8 “ CuraGen Field ” means [****************************************************************************]

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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1.9 “ CuraGen Process Improvement ” means any Technology conceived or reduced to practice by CuraGen during the term of this Agreement which is covered by a claim of the Core Patent Rights.

 

1.10 “ CuraGen Proprietary Software ” has the meaning set forth in the Software License Agreement.

 

1.11 “ CuraGen Third Party Process Improvement ” means any Technology (a) that is conceived or developed by any Third Party, (b) for which rights become Controlled by CuraGen at any time during the term of this Agreement and (c) that would constitute a CuraGen Process Improvement if it had been conceived or reduced to practice by CuraGen during such time period.

 

1.12 “ Effective Date ” means June 6, 2000, the Effective Date of the Original Agreement.

 

1.13 “ First Commercial Sale ” means the date of the first commercial sale (other than for purposes of obtaining regulatory approval or for purposes of conducting preliminary testing) of any Royalty-Bearing Service by or on behalf of 454 to a Third Party in an arms-length transaction.

 

1.14 “ 454 Field ” means (a) [**************************************************************************

*******************************] and (b) [*************************].

 

1.15 “ 454 Process Improvement ” means any Technology conceived or reduced to practice by 454 during the term of this Agreement which is covered by a claim of the Core Patent Rights.

 

1.16 “ 454 Third Party Process Improvement ” means any Technology (a) that is conceived or developed by any Third Party, (b) for which rights become Controlled by 454 at any time during the term of this Agreement period and (c) that would be a 454 Process Improvement if it had been conceived or reduced to practice by 454 during such time period.

 

1.17 “ Instrument ” means any device, equipment or instrument covered by a claim under the Core Patent Rights which is used to conduct DNA sequencing and/or analyze the results of such DNA sequencing, including, without limitation, the correlation of gene sequence expression and variation with disease, drug response or prognosis.

 

1.18 “ Net Sales ” means as to each calendar quarter during the Term, the gross invoiced sales prices charged by or on behalf of 454 or its Affiliates or sublicensees on all sales of Royalty-Bearing Services to a Third Party, less the following amounts:

 

(a) trade, quantity and cash discounts actually allowed;

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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(b) discounts, refunds, rebates, chargebacks, retroactive price adjustments, billing errors and any other allowances (including, without limitation, government-mandated and managed health care-negotiated rebates) actually granted which effectively reduce the net selling price;

 

(c) product returns, refunds, credits and allowances actually granted;

 

(d) any sales and other taxes or duties imposed on the sale or delivery of the Royalty-Bearing Service (excluding any taxes based on income); and

 

(e) freight, postage, packing, shipping, customs duties, excises, tariffs, surcharges, other governmental charges (excluding federal, state or local taxes based on income or franchise taxes) and insurance charges actually allowed or paid for delivery of the Royalty-Bearing Service.

 

Such amounts shall be determined from the books and records of 454 and maintained in accordance with the generally accepted accounting principles, consistently applied. For purposes of clarity, any upfront fee or periodic subscription fees charged by 454 in exchange for Royalty-Bearing Services in exchange for the right to commercially exploit Royalty-Bearing Services are specifically included in Net Sales.

 

1.19 “ Non-Competition Period ” means a period of [********] years; provided , that , if CuraGen terminates this Agreement in accordance with Section 7.2.1 of this Agreement, the Non-Competition Period means a period of [********] years.

 

1.20 “ Other Fields ” means all fields other than the CuraGen Field and the 454 Field.

 

1.21 “ Reagents ” means any chemical compound or mixture of chemical compounds covered by a claim under the Core Patent Rights developed for use in an Instrument.

 

1.22 “ Royalty-Bearing Services ” means the provision by 454 to any Third Party of [***********************].

 

1.23 “ Sequencing Services ” means the use of Instruments to [***********************************].

 

1.24 “ Software ” means any computer programs and software covered by a claim under the Core Patent Rights developed for use on an Instrument, including any upgrades, modifications and enhancements made for such programs and software. For purposes of this Agreement the term “Software” shall not indicate CuraGen Proprietary Software.

 

1.25 “ Software License Agreement “ has the meaning set forth in Section 2.1.6.

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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1.26 “ Technology ” means and includes all inventions, discoveries, data, formulations, techniques and know-how, whether or not patentable or copyrightable, including any Instruments.

 

1.27 “ Third Party ” means any entity other than CuraGen and 454 and their respective Affiliates.

 

ARTICLE 2. TECHNOLOGY TRANSFER

 

2.1. Grant of Rights to 454 .

 

2.1.1. Scope of Technology License . Subject to the terms and conditions of this Agreement, CuraGen hereby grants to 454 and its Affiliates a perpetual, exclusive (even as to CuraGen, except as provided in Section 2.1.2 and 2.2.1 of this Agreement), worldwide license or sublicense (as the case may be), with the right to grant sublicenses, under CuraGen’s interest in the Core Technology, any CuraGen Process Improvements and any CuraGen Third Party Process Improvements (which, in the last case, 454 elects to license pursuant to Section 2.1.5 of this Agreement) (a) to make, have made, use, sell, have sold, import, and have imported Instruments, Reagents and Software and to provide Sequencing Services, in any case solely within the 454 Field and (b) to otherwise exploit the Core Technology, CuraGen Process Improvements and such CuraGen Third Party Process Improvements, in each case for all purposes solely within the 454 Field. The foregoing licenses to 454 under the Core Technology shall be terminable by CuraGen only in accordance with Section 7.2 of this Agreement.

 

2.1.2. Retained Rights of CuraGen . Notwithstanding anything to the contrary in Section 2.1.1 above, 454 hereby acknowledges and agrees that no license is granted to 454 and its Affiliates under this Agreement to exploit the Core Technology, CuraGen Process Improvements and the CuraGen Third Party Process Improvements for any purpose outside the 454 Field.

 

2.1.3. Royalties . The licenses from CuraGen to 454 set forth in Section 2.1.1 of this Agreement shall be royalty-free and without a duty of accounting on the part of 454 to CuraGen except (a) to the extent that fees, milestones, royalties or other payments are due to an entity other than CuraGen or 454 or a wholly-owned subsidiary of CuraGen or 454 (“ Third Party Royalties ”) on account of 454’s exploitation of such license and (b) as provided in Section 2.5 below with respect to Royalty-Bearing Services. All such Third Party Royalties known to CuraGen as of the Effective Date are described on Schedule B attached hereto. Unless otherwise required by the Third Party, 454 hereby agrees, with respect to all Core Technology and CuraGen Process Improvements and all CuraGen Third Party Process Improvements it licenses from CuraGen under this Agreement, to pay all such Third Party Royalties and provide all related reports directly to the appropriate Third Parties within the time periods specified by the pertinent agreements with such Third Parties. CuraGen shall have the right, upon reasonable notice, to inspect and audit 454’s books and records during normal business hours to ensure that appropriate reports are made and Third Party Royalties paid to such Third Parties as

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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contemplated by the foregoing sentence. To the extent that CuraGen and 454 are both engaged in the exercise of rights under a license from a Third Party to Technology included in the Core Technology, CuraGen Process Improvements or CuraGen Third Party Process Improvements, CuraGen and 454 shall mutually agree on a reasonable allocation of any Third Party Royalties due thereunder based on the relative value of the license in the CuraGen Field and the 454 Field.

 

2.1.4 CuraGen Process Improvements . CuraGen shall notify 454 in writing of any patentable CuraGen Process Improvement within thirty (30) days of the filing of any patent application (including any provisional patent application) covering such CuraGen Process Improvement, which notice shall contain a copy of such application. Immediately as of such filing date, CuraGen shall be deemed to have granted to 454 the license described in Section 2.1.1 above with respect to such CuraGen Process Improvement. Representatives of the parties shall meet on a semi-annual basis, or more frequently at the option of either party, to disclose and exchange information and know-how regarding all CuraGen Process Improvements, whether or not patentable.

 

2.1.5 CuraGen Third Party Process Improvements . CuraGen shall notify 454 in writing of any CuraGen Third Party Process Improvement which becomes Controlled by CuraGen during the term of this Agreement, which notice shall contain a description of such CuraGen Third Party Process Improvement and any royalties that would be payable by 454 with respect to a sublicense thereof, in complete enough form to allow for proper evaluation thereof by 454. 454 shall provide CuraGen with written notice within five (5) business days of the date of its receipt of such notice if it finds the disclosure insufficient for such evaluation. 454 shall have [********] days from the date of such notice to provide a written response to CuraGen as to whether or not it wishes to sublicense such CuraGen Third Party Process Improvement. If the response is not received within such [********] period, as such period may be extended by written agreement of both parties, or if 454 indicates in its response that it does not wish to obtain a sublicense to such CuraGen Third Party Process Improvement, 454 shall thereafter have no right to sublicense such CuraGen Third Party Process Improvement and CuraGen shall have no further obligation to 454 with respect thereto. If 454 indicates in its response that it wishes to obtain a license to such CuraGen Third Party Process Improvement, CuraGen shall be deemed to have granted to 454 the sublicense described in Section 2.1.1 with respect to such CuraGen Third Party Process Improvement as of the date of such response.

 

2.1.6 Grant of Software License to 454. Subject to the terms and conditions of this Agreement, in furtherance of the grant of the license in Section 2.1.1 above, CuraGen hereby agrees to grant 454 a license to certain software of CuraGen useful for the organization and analyses of expression data on substantially the terms set forth in the form of Software License Agreement attached hereto as Exhibit A (the “ Software License Agreement ”).

 

2.1.7 Non-Competition in the CuraGen Field. Notwithstanding anything to the contrary contained herein, 454 hereby acknowledges and agrees that in partial consideration for the grant of the license in Section 2.1.1 above, during the term of this Agreement and, following the termination of this Agreement, for a period equal to the Non-Competition Period, (i) prior to the closing of a Qualified Public Offering, 454 shall not engage independently or with any Third

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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Party in any business, venture or activity outside the 454 Field, and (ii) after the closing of a Qualified Public Offering, 454 shall not engage independently or with any Third Party in any business, venture or activity within the CuraGen Field. For the purposes of this Agreement, a “Qualified Public Offering” means a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (or any successor statute for registration of shares in public offerings) covering the offer and sale of Common Stock of 454 for the account of 454 to the public (other than a registration statement with respect to employee stock option or purchase plans) resulting in the aggregate receipt by 454 of at least [***********] of gross proceeds (before applicable discounts, commissions and expenses) and the listing of the Common Stock of 454 on a nationally recognized stock market or exchange, including the Nasdaq Stock Market, the New York Stock Exchange and the American Stock Exchange.

 

2.1.8 Consideration for the Grant of Rights . In exchange and as consideration for CuraGen’s grant of rights to 454 under this Section 2.1 and certain other consideration and upon the terms and subject to the conditions set forth in this Agreement, 454 has, on the Effective Date, issued and delivered to CuraGen twelve million (12,000,000) shares of 454’s Series A Preferred Stock, $.01 par value per share (the “Shares”).

 

2.2. Grant of Rights to CuraGen .

 

2.2.1. Grant of Technology License .

 

(a) Scope of License . Subject to the terms and conditions of this Agreement, 454 hereby grants to CuraGen and its Affiliates a perpetual, co-exclusive (with 454) worldwide license or sublicense (as the case may be), with the right to grant sublicenses, to 454’s interest in any Core Technology, 454 Process Improvements or 454 Third Party Process Improvements (which, in the latter case, CuraGen elects to license pursuant to Section 2.2.1(d) of this Agreement) to exploit such Core Technology, 454 Process Improvements and 454 Third Party Process Improvements within the CuraGen Field.

 

(b) No Accounting; Third Party Royalties . The license from 454 to CuraGen set forth in Section 2.2.1(a) of this Agreement shall be without a duty of accounting on the part of CuraGen to 454 and shall be royalty-free except to the extent that Third Party Royalties are due on account of CuraGen’s exploitation of such license. Unless otherwise required by the Third Party, CuraGen hereby agrees, with respect to all Core Technology, 454 Process Improvements and 454 Third Party Process Improvements it licenses from 454 under this Agreement, to pay all such Third Party Royalties and provide all related reports directly to the Third Party in the time periods specified by the pertinent agreements. 454 shall have the right, upon reasonable notice, to inspect and audit CuraGen’s books and records during normal business hours to ensure that appropriate reports are made and Third Party Royalties paid to such Third Parties as contemplated by the foregoing sentence. To the extent that CuraGen and 454 are both engaged in the exercise of rights under a license from a Third Party to Technology included in the Core Technology, 454 Process Improvements or 454 Third Party Process Improvements, CuraGen and 454 shall mutually agree on a reasonable allocation of any Third

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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Party Royalties due thereunder based on the relative value of the license in the CuraGen Field and the 454 Field.

 

(c) 454 Process Improvements . During the Term of the Agreement, 454 shall notify CuraGen in writing of any patentable 454 Process Improvement within thirty (30) days of the filing of any patent application (including any provisional patent application) covering such 454 Process Improvement, which notice shall contain a copy of such application. Immediately as of such filing date, 454 shall be deemed to have granted to CuraGen the license described in Section 2.2.1 above with respect to such 454 Process Improvement. Representatives of the parties either shall meet on a semi-annual basis, or more frequently at the option of either Party, to disclose and exchange information and know-how regarding all 454 Process Improvements, whether or not patentable.

 

(d) 454 Third Party Process Improvements . 454 shall notify CuraGen in writing of any 454 Third Party Process Improvement which becomes Controlled by 454 during the Term of the Agreement, which notice shall contain a description of such 454 Third Party Process Improvement and any royalties that would be payable by CuraGen with respect to a sublicense thereof, in complete enough form to allow for proper evaluation thereof by CuraGen. CuraGen shall provide 454 with written notice within five (5) business days of the date of its receipt of such notice if it finds the disclosure insufficient for such evaluation. CuraGen shall have [*********] days from the date of such notice to provide a written response to 454 as to whether or not it wishes to sublicense such 454 Third Party Process Improvement. If the response is not received within such [*********] period, as such period may be extended by written agreement of both parties, or if CuraGen indicates in its response that it does not wish to obtain a sublicense to such 454 Third Party Process Improvement, CuraGen shall thereafter have no right to sublicense such 454 Third Party Process Improvement and 454 shall have no further obligation to CuraGen with respect thereto. If CuraGen indicates in its response that it wishes to obtain a license to such 454 Third Party Process Improvement, 454 shall be deemed to have granted to CuraGen the sublicense described in Section 2.2.1 with respect to such 454 Third Party Process Improvement as of the date of such response.

 

2.2.2. Grant of Beta Test Site License . 454 and CuraGen hereby agree that, during the term of this Agreement, CuraGen shall have the option to serve as the exclusive beta test site for all Instruments, Reagents and Software developed by 454 for use in the CuraGen Field on substantially the terms contained in the form of Beta and Production Product Supply Agreement attached hereto as Exhibit B (the “Beta Site Agreement”).

 

2.2.3. Supply of Instruments, Reagents and Software . During the term of this Agreement and on a non-exclusive basis, 454 will sell to CuraGen for use as provided herein, and CuraGen will purchase from 454, Instruments, Reagents and Software in accordance with the terms set forth on Schedule C attached hereto. In the event there is a conflict between this Agreement and the Beta Site Agreement with respect to the supply of Instruments, Reagents and Software, the terms of the Beta Site Agreement shall control.

 

Certain confidential information contained in this Exhibit, marked by brackets and asterisks, were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

 

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2.3 Rights in Other Fields .

 

2.3.1. Rights in Other Fields . Unless prohibited by confidentiality obligations to Third Parties and subject to any restrictions provided herein or in the Certificate of Incorporation of CuraGen, if either party becomes aware of the potential use in Other Fields of Core Technology, it shall promptly advise the other party of said use and provide a summary of the information in its possession relating to such potential use. In the event that either party wishes to develop or commercialize any such Core Technology for any use in such Other Field, it shall first provide written notice to the other party and shall offer the other party the right of first negotiation described in Section 2.3.2 hereof.

 

2.3.2. Right of First Negotiation . In the event that either party has a right of first negotiation as provided in Section 2.3.1, the other party (the “Offer