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Exhibit 4.11
Effective Date: December 16/th/, 2002
LION bioscience AG
and
BAYER AKTIENGESELLSCHAFT
----------------------------------------
4/th/ AMENDMENT
relating to a development agreement between
LION bioscience AG
and
▇▇▇▇▇ ▇▇
dated 13/th/ October, 2000
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CONTENTS
Article Page
Recitals .............................................................. 3
1. Interpretation ........................................................ 4
2. Continuation of the Development, Acceptance and Termination ........... 5
3. Project Structure ..................................................... 7
4. Ownership, Rights and Commercialization ............................... 8
5. Good Faith ............................................................ 9
6. Termination ........................................................... 10
7. Miscellaneous ......................................................... 10
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THIS AGREEMENT is made as of December 16/th/, 2002
BETWEEN:
LION bioscience AG ("LION"), ▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
registered with the commercial register of the local court in Heidelberg under
HR B 5706
and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
WHEREAS:
(A) On 13/th/ October, 2000, LION and Bayer entered into a novel and innovative
collaboration (the "Development Agreement") to implement existing IT tools at
Bayer but also to develop novel IT tools, such as pharmacophore informatics
tools, to significantly enhance lead identification and optimization
capabilities for pharmaceutical and agrochemical discovery and development.
(B) LION and Bayer agreed on key modifications to the Development Agreement to
be implemented in the first calendar quarter of 2002, which relate in particular
to the future milestones and payment schedule, in a 1st Amendment to the
Development Agreement dated 1/st/ December, 2001 and signed by LION on 11/th/
December, 2001.
(C) LION and Bayer agreed on modifications of the Development Agreement to be
implemented in the second calendar quarter of 2002, which relate in particular
to the future milestones and payment schedule, in a 2nd Amendment to the
Development Agreement dated March 29/th/, 2002.
(D) On June 14/th/, 2002, the parties agreed that the DELIVERABLES of the new
MILESTONE 2 A as defined in Annex B/II of the 2/nd/ Amendment to the Development
Agreement did not meet the criteria of the ACCEPTANCE TEST according to Annex
E/II of that Amendment.
(E) The parties agreed that the key DELIVERABLES identified by the parties would
not meet the criteria of the ACCEPTANCE TEST in accordance with (S) 3 (3) of the
2/nd/ Amendment to the Development Agreement, which would have allowed Bayer to
terminate the Agreement pursuant to (S) 15 of the Development Agreement.
However, the parties have agreed in the 3/rd/ Amendment to the Development
Agreement dated June 25, 2002 to an procedure trying to meet the criteria of
MILESTONE 2 A.
Testing and inspection of the first two corrections releases which were agreed
upon in the 3/rd/ Amendment identified issues in the correction process that
would allow Bayer to terminate the Agreement pursuant to (S) 2 (1) of the 3/rd/
Amendment.
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However, the parties agreed on September 4, 2002, to refine the process for
LION to meet the criteria of the ACCEPTANCE TEST for MILESTONE 2A and to
restructure the project for all the work being due beyond MILESTONE 2A.
On October 7, 2002, Bayer received a final correction release of the due
DELIVERABLES according to MILESTONE 2A - aiming at fulfilling the criteria
according to the modification of Annex B / II of 2nd Amendment which Bayer has
been subjected to a formal, determinative ACCEPTANCE TEST (modification of Annex
E / II of the 2nd Amendment, i.e., excluding Crop Science databases).
LION and Bayer hereby wish to amend and modify the Development Agreement as
follows.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
1.1 In this Agreement, including the recitals therein, all terms shall have
the same meaning as in the Development Agreement unless otherwise
defined in this Agreement or unless the context requires otherwise.
1.2 This Agreement representing the 4/th/ Amendment to the Development
Agreement as referred above will supersede the 1/st/ through 3/rd/
Amendment and all provisions given there, except as provided otherwise
in this Agreement.
1.3 "MILESTONE" has the meaning given to it in clause 1(8) of the
Development Agreement.
1.4 "RELEASE" is a defined term and shall mean a body of executable code
that is packaged, tested and documented with release notes and deployed
on Bayer servers.
1.5 "KEY RELEASE" is a defined term and shall mean any RELEASE to which the
corresponding ACCEPTANCE TEST will be applied. The term KEY RELEASE
will substitute the term MILESTONE beyond MILESTONE 2A - namely
MILESTONE 2 B, MILESTONE 3, and MILESTONE 4 of the Development
Agreement and its Amendments. The content of the KEY RELEASES is
defined in ANNEX 1 and 2.
1.6. ACCEPTANCE TEST is a defined term as follows: for MILESTONE 2A, the
term has the meaning given in the 2/nd/ Amendment, ANNEX E/II to the
Development Agreement which was jointly defined and agreed upon between
the parties; for future DELIVERABLES, the term has the meaning
according to Art. 2.6 of this Amendment.
2. Continuation of the Development, Acceptance and Termination
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A. As to MILESTONE 2A:
Following the testing and inspection of the key DELIVERABLES of
MILESTONE 2A the parties realized the emergence of certain issues which
would have made the completion of the ACCEPTANCE TEST according to (S)
3 (3) of the 2/nd/ Amendment to the Development Agreement not possible.
Therefore, the parties agree to the following understanding in regard
to the MILESTONES 2A:
2.1 Lion shall repair the bugs and errors of the DELIVERABLES of MILESTONE
2 A defined in Annex 1 without negative impact on any of the
functionalities of DELIVERABLES classified as "passed" in the MS2a.4
ACCEPTANCE TEST report document PIX0036-5 MS2a.4 ATP results.xls. Bayer
will receive a final correction KEY RELEASE (i.e. R 3.1) for the
DELIVERABLES according to sentence 1 of this clause including the
corresponding documentation and the related source code (subject to the
prior written consent to the delivery of such source code of any third
party having an ownership interest or rights in such source code; for
LION's sub-contractor TRIPOS see ANNEX 4) by the date defined in ANNEX
2 for KEY RELEASE R 3.1.
2.2 In consideration for the DELIVERABLES of MILESTONE 2A, that have passed
the ACCEPTANCE TEST, for efforts until the Effective Date of this
Amendment beyond MS2a requirements such as provider simplification and
performance enhancements, for LION's efforts until the Effective Date
of this Amendment in RELEASE 2.5 and KEY RELEASE 3.1 to repair
DELIVERABLES and for the use of LION's L-charts and sub-contractors
compute engines Bayer will execute the payment of US$ 2,000,000 to Lion
without delay after the Effective Date of this Amendment - but not
later than December 20/th/ 2002 - thereby accepting LION's obligations
with respect to MILESTONE 2A as of the Effective Date (i.e. without any
right to repayment of this amount). This amount corresponds to
sub-payment 4 of the Development Agreement. For the avoidance of doubt
the parties confirm that sub-payment 4 (excluding management fee 4) as
defined in Annex D of the Development Agreement has been reduced to US$
2,000,000. Future maintenance and warranty of the Tripos' compute
engines is specified in a separate agreement between Bayer Crop Science
and Tripos.
B. As to the continuation of the Project beyond MILESTONE 2A:
2.3 The parties agree that the overall scope of the Project is defined in
the Cornerstone proposal attached hereto as as ANNEX 2 and further
detailed in the DELIVERABLES list attached hereto as ANNEX 5. The
parties agree to jointly define a project plan including the
DELIVERABLES for each KEY RELEASE on the basis of the Cornerstone
Proposal attached hereto as ANNEX 2 and to specify details of certain
DELIVERABLES of the WORK PACKAGES and the KEY RELEASES three month
prior to the delivery date according to ANNEX 2 of the respective KEY
RELEASE considering the provisions of Section 3 and 5 below. For the
avoidance of doubt, LION committs the timely achieving and delivering
of the DELIVERABLES of each KEY RELEASE according to ANNEX 2.
2.4 Bayer will itself develop and establish the data integration part of
the project and terminate those parts directed to Bayer Crop Science.
Bayer and Lion will continue the
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WORK PACKAGES Analysis/Visualization, Pharmacophore Identification and
Project Tracking according to the modified DELIVERABLES list attached
hereto as ANNEX 5. Bayer and Lion will jointly develop an interface
between Bayer's warehouse/query engine and the Project Spreadsheet. In
this context, LION will license to Bayer the software 'LION Discovery
Center' including updates thereof during the course of the Project
pursuant to a cost-free, non-exclusive, non-transferable, perpetual
worldwide license for internal use by Bayer within the scope of this
Project and to be used with the DELIVERABLES of the Project on a
perpetual basis for internal purposes only pursuant to license terms
and conditions to be agreed upon between the parties.
2.5 In accordance with the time frame according to ANNEX 2 Bayer shall
receive the DELIVERABLES of each newly developed KEY RELEASE and all
RELEASES developed in realizing the elements of ANNEX 5 fulfilling the
there defined criteria including - in case of full acceptance of the
respective WORK PACKAGE, respectively KEY RELEASE - the corresponding
documentation and the source code (subject to the prior written consent
to the delivery of such source code of any third party having an
ownership interest or rights in such source code; for LION's
sub-contractor TRIPOS see ANNEX 4). For the avoidance of doubt, LION is
not obliged to provide the source code of its software LION Discovery
Center as this is not to be seen as a KEY RELEASE or RELEASE.
2.6 Bayer will subject the DELIVERABLES of each KEY RELEASE to a
corresponding specific ACCEPTANCE TEST that shall be agreed upon
jointly, in due time (timeframe has to be mutually defined) but not
later than 30 days prior to the ACCEPTANCE TEST. Bayer will inform LION
of the outcome of the corresponding ACCEPTANCE TEST and will request
the repair of any bugs or errors or will advise LION of its definite
acceptance of such KEY RELEASE, respectively. The parties agree that
LION will repair the bugs and errors in the KEY RELEASE following the
KEY RELEASE in question without additional compensation. The definite
acceptance of a KEY RELEASE is on a per WORK PACKAGE basis.
2.7 Bayer will compensate LION for the development and delivery of the
DELIVERABLES under the KEY RELEASES - after they have passed the
corresponding ACCEPTANCE TEST - by paying the sums corresponding to
each completed WORK PACKAGE of each KEY RELEASE as laid down in ANNEX
3.
2.8 For the avoidance of doubt, there will not be any further financial
obligations of Bayer under this Amendment and the Development Agreement
over and above the provisions of Art. 2.7 in connection with ANNEX 3.
2.9. In addition to the provisions of Art. 15 of the Development Agreement
Bayer may terminate the Agreement with immediate effect in the
following cases:
- if LION does not deliver a KEY RELEASE of each WORK PACKAGE at least
within 60 days after the due date according to ANNEX 2,
- if the ACCEPTANCE TEST for any WORK PACKAGE was not passed to a
degree giving reasonable confidence that the corresponding
DELIVERABLES
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may not be accepted after LION's repair.
- if LION does not complete the repair of a KEY RELEASE satisfactorily
as requested by Bayer within 90 days after having been informed of
the deficit, unless the parties agree to repair the pertinent bugs
and errors in the KEY RELEASE following the KEY RELEASE in question.
3. Project structure (superseding (S) 9 of the Development Agreement)
3.1 The executive steering committee shall, subject to good faith and
man-power limitations as stated in Section 5 approve the specified
details of the DELIVERABLES of the KEY RELEASES and the respective
portions and time periods to complete the WORK PACKAGES, and the
respective ACCEPTANCE TESTs and shall approve any changes in the
project plans during the period between the KEY RELEASES, provided
however that the executive steering committee may not approve any
definitions or other details of any DELIVERABLES of the KEY RELEASES,
any changes of the KEY RELEASES or any time periods for achieving the
defined DELIVERABLES or the project plans that would materially enlarge
or broaden the scope of the Project as originally anticipated in the
Development Agreement without the consent of LION's representatives in
the executive steering committee. This consent may not, subject to the
good faith and man-power limitations as stated in Section 5, be
unreasonably withheld.
3.2 In the executive steering committee Bayer will be represented by Dr.
J.-A. Karlsson, ▇▇. ▇. ▇▇▇▇▇▇▇▇▇, Dr. H. Wild, Prof. ▇▇. ▇. ▇▇▇▇▇▇▇▇▇
and ▇▇. ▇. ▇▇▇▇▇▇▇▇▇▇ - as ▇▇▇▇▇'▇ responsible project managers while
LION will be represented by ▇▇. ▇. ▇▇▇ ▇▇▇▇▇▇ und ▇▇▇▇▇▇▇, ▇▇. ▇.
▇▇▇▇▇▇▇▇▇ and Th. ▇▇▇▇ - as LION's responsible project manager.
Following December 31/st/, 2002 ▇▇. ▇. ▇▇▇▇▇▇▇▇▇ and Prof. ▇▇.
▇▇▇▇▇▇▇▇▇ will leave the executive steering committee.
3.3 Since specific experience in pharmacophore informatics and project
management are important requirements for the successful execution of
the topics under the Development Agreement, any change of the project
manager of LION needs to be approved by Bayer in writing.
3.4 The operational committee as defined in (S) 9 (4) of the Development
Agreement shall remain unchanged.
3.5 At all stages of the Project, Bayer has the right to elect a new
partner that could take over the responsibility of LION's
sub-contractor in case Bayer has confidence that the DELIVERABLES may
not be achieved in time or accepted by Bayer. Bayer may especially
require LION to terminate the services of LION's current subcontractor,
Tripos Ltd., UK and to cooperate with the new partner elected by Bayer
to achieve the DELIVERABLES in question.
4. Ownership, Rights and Commercialization
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4.1 Subject to the terms and provisions set forth in this 4/th/ Amendment
and the Development Agreement, LION hereby grants, and Bayer hereby
accepts, a non-exclusive, non-transferable, royalty-free worldwide
perpetual right and license to use, modify or develop further, for its
and its affiliates' and successors' internal research, discovery and
development of pharmaceutical and agricultural products, at any of its
sites, each KEY RELEASE and RELEASE of a WORK PACKAGE accepted by
Bayer, in object and source code form, provided however that:
- for purposes of this Section 4.1, any KEY RELEASE or RELEASE shall
not include any version of the LION DiscoveryCenter software. The
license to the use of LION DiscoveryCenter shall be governed by a
separate license agreement to be entered into by the parties
pursuant to Section 2.4
- if any KEY RELEASE and/or RELEASE incorporates one or more software
program(s) or routine(s) of a third party, including without
limitation Tripos, Inc. or Tripos UK Ltd., LION must be authorized
to (sub)license or deliver the corresponding source code of such
third party software program(s) or routine(s) to Bayer; LION shall
use commercially reasonable efforts to obtain such (sub)license or
authorization;
- Bayer will not itself, or allow any parent, subsidiary, affiliate,
successor, agent, employee, consultant or other third party to: (a)
sell, lease, license, sublicense, copy, reproduce, market or
distribute the KEY RELEASES; (b) modify, port, translate, transform,
localize, or create derivative works of the KEY RELEASES, or any
portion thereof, for resale or external distribution; (c) provide
training or consulting to third parties in the use of the KEY
RELEASES, or enter into time-sharing arrangements for use of the KEY
RELEASES with third parties; (d) knowingly take any action that
would cause any KEY RELEASES to be placed in the public domain; (e)
remove any product identification, trademark, copyright or other
notices contained in or on KEY RELEASES;
- Bayer's use and disclosure of the KEY RELEASES is restricted solely
to its, its affiliates' and successors' employees; Bayer, its
affiliates and successors are responsible for the actions of their
employees; and
Bayer will not provide access to any portion of the KEY RELEASE,
including in particular in source code form, to any third party
other than affiliates and successors, that is not an authorized
partner of LION, except that upon termination of the Development
Agreement, Bayer shall be entitled to provide such access to a third
party contractor or collaborator of Bayer, provided that (A) such
third party has agreed to maintain the confidentiality of each such
KEY RELEASE or portion thereof consistent with the requirements
Bayer ordinarily imposes on third parties that are granted access to
Bayer's trade secrets or confidential information, (B) such third
party agrees in writing to use such KEY RELEASE, or any portion
thereof, only for the benefit of Bayer or the succeeding entity and
consistent with the scope of Bayer's license and rights, (C) such
third party shall have no use, distribution, commercialization or
development rights or license to any derivative works or further
developments of any such KEY
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RELEASE, and (D) Bayer notifies LION of the identity of each such
third party.
4.2 LION shall have the unrestricted right to use, develop further,
distribute and otherwise commercialize the KEY RELEASES and any other
results developed in the course of the Project, including in
particular, PROPRIETARY RESULTS AND NEW SOFTWARE, at any time during
the term of this Agreement, including the extension period specified in
this 4/th/ Amendment and any time after termination of the Development
Agreement as amended. For the avoidance of doubt, the provisions under
Art. 8.5 of the Development Agreement remain in full force. In case the
related Software has been developed solely by Bayer, Bayer may grant a
license to LION regarding such Software. The terms and conditions for
such use of that Bayer-Software will be negotiated in due time. For the
avoidance of doubt, software which has been developed solely by Bayer
will remain the property of Bayer according to Art. 13.5 of the
Development Agreement.
5. Good Faith and Man-Power Limitations
It is understood between LION and Bayer that details of certain
DELIVERABLES as set forth in ANNEX 2 and ANNEX 5 have not yet been
specified and fully planned out by LION and its subcontractor. LION and
Bayer will, in accordance with Section 3 above, jointly specify those
details in subsequent steps in good faith, and it is understood that
the technical feasibility may limit the execution of certain
specifications and the scope of identified DELIVERABLES. The parties
agree that the generation of the remaining DELIVERABLES must be
achievable by man-power consisting of a total of 25 full time
equivalent employees (FTEs) - to be provided by LION and its
sub-contractor to complete all of the WORK PACKGES within the agreed
upon time periods during the 19 months following the date of execution
of this 4/th/ Amendment.
6. Termination (Consequences)
- in context to (S) 15 of the Development Agreement -
In the case that LION becomes insolvent (Insolvenzverfahren) or winds
up its business activities (Liquidation) in accordance with (S) 15 (1)
of the Development Agreement, LION shall take beforehand any necessary
steps to safeguard Bayer's rights and interest with respect to LION,
Tripos Inc. and Tripos UK Ltd. by allowing Bayer to assume LION's
rights and obligations under the corresponding Agreements between LION
and Tripos Inc. and LION and Tripos UK Ltd.
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7. Miscellaneous
7.1 The Development Agreement will continue in full force and effect as
legal, valid and binding obligations of each of the parties subject to
and as provided in this Agreement (4/th/ Amendment) and earlier
Amendments as cited in this Agreement - unless amended by this 4/th/
Amendment - or necessitated by the implementation of this Agreement.
7.2 (S) 18 of the Development Agreement shall apply to this Agreement
mutatis mutandis.
7.3 The provisions of this Agreement will supersede the corresponding
provisions of the Development Agreement.
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Executed by and on behalf of LION bioscience AG
Heidelberg, ___________________
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ und ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ und ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CEO CIO
Executed by and on behalf of ▇▇▇▇▇ ▇▇
Leverkusen, _________________
/s/ ▇.▇. ▇▇▇▇▇▇▇▇ /s/ W. van den Kerckhoff
------------------------------------ ------------------------------
Dr. J.-A. Karlsson Dr. W. van den Kerckhoff
Head of Pharma Research Patents and Licenses
