Research Services Agreement (2000)Full Document 

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                           RESEARCH SERVICES AGREEMENT









                              ELI LILLY AND COMPANY



                                       AND



                              ARRAY BIOPHARMA, INC.









                                 MARCH 22, 2000



[ * ] = 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.



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                               TABLE OF CONTENTS


                                                                                                              
ARTICLE I DEFINITIONS  ...........................................................................................1
     1.1   Array Alliance Manager  ...............................................................................1
     1.2   Array Confidential Information  .......................................................................1
     1.3   Array FTE  ............................................................................................2
     1.4   Array Process  ........................................................................................2
     1.5   Array Project Leader  .................................................................................2
     1.6   Array Technology  .....................................................................................2
     1.7   Associate Chemist  ....................................................................................2
     1.8   Calendar Quarter  .....................................................................................2
     1.9   Calendar Year  ........................................................................................2
     1.10  cGCP  .................................................................................................2
     1.11  cGLP  .................................................................................................3
     1.12  cGMP  .................................................................. ..............................3
     1.13  Chemistry Invention  ..................................................................................3
     1.14  FTE Rate  .............................................................................................3
     1.15  Lilly Chemistry Research Services Director  ...........................................................3
     1.16  Lilly Confidential Information  .......................................................................3
     1.17  Lilly Project Leader  .................................................................................4
     1.18  Project  ..............................................................................................4
     1.19  Project Rights  .......................................................................................4
     1.20  Project Services  .....................................................................................4
     1.21  Project Team  .........................................................................................4
     1.22  Senior Chemist  .......................................................................................4
     1.23  Target Family  ........................................................................................4
     1.24  Third Party  ..........................................................................................4
     1.25  Work Plan  ............................................................................................4

ARTICLE 2  PROJECT SERVICES  .....................................................................................5
     2.1   Project Services and Other Services  ..................................................................5
     2.2   Conflicts of Interest  ................................................................................5
     2.3   Project Management; Meetings  .........................................................................5
     2.4   Commitment to Project Staffing  .......................................................................6
     2.5   Array Employees Assigned to Each Project  .............................................................6
     2.6   Reduction of Array FTEs Assigned to Projects...........................................................7
     2.7   Communication and Access to Array Employees  ..........................................................8
     2.8   Reports, Records and Project Rights Transfer  .........................................................8
     2.9   Project Diligence  ....................................................................................9
     2.10  Governing Authority of Projects  ......................................................................9
     2.11  Array's Alliance Management  ..........................................................................9

ARTICLE 3 CONSULTING SERVICES  ...................................................................................9

ARTICLE 4 PROJECT RESOURCES AND COSTS  ..........................................................................10
     4.1   Project Resources and Costs  .........................................................................10
     4.2   Subcontracting Project Services or Other Services  ...................................................11
     4.3   Training  ............................................................................................12




[ * ] = 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.

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ARTICLE 5 PROJECT OWNERSHIP, PROCEDURAL SAFEGUARDS AND
                SECURITY  .......................................................................................12
     5.1   Ownership of Project Rights...........................................................................12
     5.2   Safeguards to Protect Confidentiality and Project Rights Ownership  ..................................13
     5.3   Security  ............................................................................................13

ARTICLE 6 RECORD-KEEPING AND AUDIT  .............................................................................14
     6.1   Records Retention; Maintenance of Project Records  ...................................................14
     6.2   Financial Audit  .....................................................................................14
     6.3   Scientific and Legal Audit  ..........................................................................15
     6.4   Quality Assurance and Security Audits; On-Site Lilly Personnel  ......................................15

ARTICLE 7 CONFIDENTIALITY AND NON-USE  ..........................................................................15
     7.1   Disclosure of Agreement  .............................................................................15
     7.2   Array's Confidentiality Obligations  .................................................................16
     7.3   Lilly's Confidentiality Obligations  .................................................................16

ARTICLE 8 TERM AND TERMINATION  .................................................................................17
     8.1   Term   20
     8.2   Lilly Voluntary Termination  .........................................................................17
     8.3   Termination for Default  .............................................................................19
     8.4   Termination Due to Array Ownership Change  ...........................................................19
     8.5   Termination Due to Insolvency or Liquidation  ........................................................19
     8.6   Surviving Rights and Obligations  ....................................................................19

ARTICLE 9 REPRESENTATIONS AND WARRANTIES  .......................................................................20
     9.1   Lilly's Authority to Perform Agreement  ..............................................................20
     9.2   Array's Authority to Perform Agreement  ..............................................................20
     9.3   No Debarment  ........................................................................................20
     9.4   Year 2000  ...........................................................................................20

ARTICLE 10 MUTUAL INDEMNIFICATION  ..............................................................................21
     10.1  Array's Right to Indemnification  ....................................................................21
     10.2  Lilly's Right to Indemnification  ....................................................................21
     10.3  Indemnification Notice and Defense Procedures  .......................................................21

ARTICLE 11 MISCELLANEOUS  .......................................................................................22
     11.1  Further Assurances  ..................................................................................22
     11.2  No Agency; Independent Contractor  ...................................................................23
     11.3  Compliance with Laws  " ..............................................................................23
     11.4  Compliance with Work Plan and Lilly Protocols and Specifications   ...................................23
     11.5  Insurance  ...........................................................................................23
     11.6  Amendment  ...........................................................................................23
     11.7  Notices and Reports  .................................................................................23
     11.8  Governing Law  .......................................................................................24
     11.9  Assignment  ..........................................................................................24
     11.10 Headings  ............................................................................................24


[ * ] = 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.

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     11.11 Severance of Clauses  ................................................................................24
     11.12 No Waiver  ...........................................................................................24
     11.13 Entire Agreement  ....................................................................................24
     11.14 Force Majeure  .......................................................................................24
     11.15 Counterparts  ........................................................................................24
     11.16 No Licenses  .........................................................................................24
     11.17 Jointly Prepared  ....................................................................................24


Schedule 1.25 Work Plan(s)

Exhibit A: Initial Press Release


[ * ] = 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.

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                           RESEARCH SERVICES AGREEMENT


         THIS RESEARCH SERVICES AGREEMENT (the "Agreement") is made and entered
into effective as of March 22, 2000 (the "Effective Date"), by and between Eli
Lilly and Company, Lilly Corporate Center, Indianapolis, IN, 46285 ("Lilly"),
and Array BioPharma, Inc., 188533 d Street, Boulder, CO, 80301 ("Array")
(together Lilly and Array, the "Parties").


                                    RECITALS

         WHEREAS, Lilly is engaged in the discovery, development, manufacturing
and marketing of pharmaceutical products; and

         WHEREAS, Array provides research services in all aspects of chemistry,
high through-put screening, structural biology, and information management; and

         WHEREAS, Lilly proposes to retain Array for the specific purpose of
providing chemical research, analysis, manufacturing of specialty chemical
products or related services that Array may offer.

         NOW, THEREFORE, it is agreed as follows:


                                    ARTICLE I

                                   DEFINITIONS

         Terms defined in this Article I and parenthetically elsewhere shall
have the same meaning throughout this Agreement, including the recitals. Defined
terms may be used in the singular or plural.

         1.1 "ARRAY ALLIANCE MANAGER" shall have the meaning set forth in
Section 2.11.

         1.2 "ARRAY CONFIDENTIAL INFORMATION" means (1) any and all Array
Technology and (2) any and all information, items, material or know-how (whether
or not patentable), except Project Rights and Array Processes, that is disclosed
to and/or received by Lilly from Array (whether orally, in writing, through
observation, or otherwise) during the term of this Agreement or prior to the
Effective Date, including, without limitation, any and all suggestions,
descriptions, ideas, inventions (whether or not patentable) discoveries,
know-how, trade secrets, techniques, data, strategies, methods, syntheses,
processes, practices, documents, apparatus, devices, chemical formulations,
chemical synthesis, compounds, composition of matter, chemical samples, assays,
cell lines, vectors, screens, databases, database structures, and data analysis
methods.

         Array Confidential Information shall not include any information that
Lilly can prove by competent evidence: (a) is now, or hereafter becomes, through
no act or failure to 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.

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on the part of Lilly, generally known or available; (b) is known by Lilly at the
time of receiving such information; (c) is hereafter disclosed to Lilly by a
Third Party, as a matter of right and without restriction on disclosure; (d) is
independently developed by Lilly without the aid, application, or use of Array
Confidential Information; (e) is the subject of a written permission to disclose
provided by Array; or (f) is required to be disclosed by law, government agency,
court order or valid discovery request in connection with a legal proceeding

         1.3 "ARRAY FTE" means a full time equivalent scientific person year
consisting of no less than a total of [ * ] of Project Services carried out by a
Lilly approved, Array employee who is either (except as the Parties may
otherwise agree in writing) (i) the Array Alliance Manager or (ii) an Array
Project Leader, Senior Chemist, or Associate Chemist exclusively assigned and
fully dedicated to Projects. Time spent by Array FTEs will qualify for
reimbursement under Subsection (a) of Section 4.1 only if it involves Project
Services on or directly related to a Project.

         1.4 "ARRAY PROCESS" means a chemical method or process that Array owns
or has a right to license and that Array used, by its choice, in at least one
Project, but the term expressly excludes all high-speed synthesis technology and
methods of Array.

         1.5 "ARRAY PROJECT LEADER" means an Array employee assigned to lead
other Array employees working on a particular Project who, unless otherwise
agreed to by the Parties in writing, has a Ph.D. in organic chemistry, at least
[ * ] of professional medicinal chemistry experience, and previous project
leadership experience. Each Array Project Leader shall be responsible for
managing the day-to-day activities of Array FTEs assigned to his/her particular
Project to achieve the Project's goals in accordance with the Work Plan. An
Array Project Leader is subordinate to a Project's Lilly Project Leader
regarding all aspects of such Project, and therefore, any disagreements between
them regarding the direction, priorities, goals or other aspects of the Project
shall be resolved ultimately by the Lilly Project Leader.

         1.6 "ARRAY TECHNOLOGY" means Array inventions (whether or not
patentable) and Array know-how. Array Technology expressly excludes all Project
Rights regardless of Array's contribution to such Rights and, for purposes of
this Agreement, also expressly excludes Array Processes.

         1.7 "ASSOCIATE CHEMIST" means an Array employee who has at least a
Masters Degree in organic chemistry or its equivalent (i.e., a Bachelor Degree
in organic chemistry with several years of chemistry experience), but who is
neither an Array Project Leader, nor a Senior Chemist, nor the Array Alliance
Manager.

         1.8 "CALENDAR QUARTER" means a three-month period ending on March 3 1,
June 30, September 30, or December 31.

         1.9 "CALENDAR YEAR" means the twelve-month period ending on December
31.

         1.10 "CGCP" means the then-current Good Clinical Practice Standards
promulgated or


[ * ] = 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.

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         endorsed by the FDA (or in the case of foreign jurisdictions,
comparable regulatory standards), including those regulations or guidelines
expressed or implied in the regulatory filings made with respect to a particular
compound or product at issue with the FDA or foreign regulatory agents.

         1.11 "CGLP" means the then-current Good Laboratory Practices
promulgated or endorsed by the FDA (or in the case of foreign jurisdictions,
comparable regulatory standards), including those procedures expressed or
implied in the regulatory filings made with respect to a particular compound or
product at issue with the FDA or foreign regulatory agents.

         1.12 "CGNIP" means current Good Manufacturing Practices as defined in
the U.S. regulations 21 CFR Section 210 et seq., and the EEC Guide to Good
Manufacturing Practices for Medicinal Products (Vol. IV Rules Governing
Medicinal Products in the European Community 1992).

         1.13 "CHEMISTRY INVENTION" means [ * ] that is conceived and invented
by Array (by itself or jointly with Lilly) as a direct or indirect result of
performing Project Services or Other Services.

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