Exhibit 10.1

 

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission.  Asterisks denote omissions.

 

 

CONSUMER GENOMICS AND HAP™ TECHNOLOGY LICENSE
AGREEMENT

BETWEEN

SCIONA LIMITED

AND

GENAISSANCE PHARMACEUTICALS, INC.

 

 

17 November 2003

 

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EXECUTION COPY

 

CONSUMER GENOMICS AND HAP™ TECHNOLOGY LICENSE AGREEMENT

THIS AGREEMENT, effective as of November 17, 2003 (the “Effective Date”),
between SCIONA LIMITED, a corporation duly organized and existing under the laws
of United Kingdom, and having its principal place of business at 25 Broadmarsh
Business and Innovation Centre, Harts Farm Way, Havant Hampshire, PO9 1HS,
United Kingdom; and GENAISSANCE PHARMACEUTICALS, INC., a corporation duly
organized and existing under the laws of the State of Delaware, and having its
principal place of business at Five Science Park, New Haven, Connecticut 06511.

 

WITNESSETH:

 

WHEREAS, Sciona has developed a fully integrated solution for providing
personalized well-being advice and formulations based on established
genotype-phenotype links; and

 

WHEREAS, Genaissance has developed a fully integrated solution for connecting
genomic variation to phenotypes, which is known as HAP™ Technology, and which
combines Genaissance’s proprietary HAP™ Database of proprietary gene
polymorphisms, including specific single nucleotide polymorphism (SNPs) and
haplotype markers, known as HAP™ Markers, the DecoGen® Informatics System,
Genaissance’s dedicated clinical genotyping facilities, and Genaissance’s
genetic association expertise (as such capitalized terms and other capitalized
terms are hereinafter defined); and

 

WHEREAS, Genaissance is interested in the exploitation of the HAP Technology for
consumer genomics and research projects to identify new genetic links in the
consumer genomics area; and

 

WHEREAS, Sciona and its Affiliates are interested in obtaining access to the HAP
Technology and related genetic association expertise for use in developing
genetic tests containing HAP Markers for use by consumers in selecting Consumer
Products and in making lifestyle choices; and

 

WHEREAS, Sciona is interested in using Genaissance as its exclusive provider of
genotyping services to support sales of genetic tests containing HAP Markers,
and as its preferred provider of genotyping services to support sales of certain
other genetic tests, in each case in North America and other territories in
which Genaissance has an appropriately qualified laboratory; and

 

WHEREAS, Genaissance is willing to grant Sciona access to its HAP Technology,
and to provide such genotyping services, as well as certain support services,
all upon the terms and conditions set forth below; and

 

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WHEREAS, Genaissance and Sciona also wish to collaborate to discover HAP Marker
associations and to sell HAP Marker association delivery services;

 

NOW THEREFORE, in consideration of the premises and of the covenants herein
contained, the Parties hereto mutually agree as follows:

 

1.                                      DEFINITIONS.

 

1.1                               “Affiliate” shall mean any corporation or
other entity that directly or indirectly controls, is controlled by or is under
common control with a Party.  A corporation or other entity shall be regarded as
in control of another corporation or entity if it owns or directly or indirectly
controls more than fifty percent (50%) of the outstanding voting stock or other
ownership interest of the other corporation or entity, or if it possesses,
directly or indirectly, the power to manage, direct or cause the direction of
the management and policies of the corporation or other entity or the power to
elect or appoint more than fifty percent (50%) of the members of the governing
body of the corporation or other entity.  Any such other relationship as in fact
results in actual control over the management, business and affairs of a
corporation or other entity shall also be deemed to constitute control.  Each of
Prelude Trust plc and Abbey National Treasury Services Overseas Holding are
expressly excluded from the definition of Sciona’s “Affiliates”.

 

1.2                               “Agreement” means this document, together with
all Exhibits and Schedules hereto.

 

1.3                               “Confidential Information” means (a) all
proprietary materials, data, know-how (including Know-How) or other information
received by a Party or its Affiliates from the other Party or its Affiliates in
connection with the performance of this Agreement (and which, in the case of
Sciona and its Affiliates as recipient, shall include the HAP Database and all
information contained therein related to HAP Markers and their associations and
the DecoGen Informatics System), and (b) all other materials, data, know-how or
other information disclosed or supplied by or on behalf of either Party or its
Affiliates and identified as “Confidential” or “Proprietary.”

 

1.4                               “Consumer Product” shall mean any product or
service, other than a Prescription Product or a Medical Diagnosis Product, that
is directly or indirectly marketed, sold or provided to consumers in a manner
that indicates such product or service is intended for use in a Consumer
Products Market.

 

1.5                               “Consumer Products Market” shall mean
personal, family or household purposes, including over-the-counter medicines,
cosmetics, fragrances, vitamins and supplements, foods, and beverages.

 

1.6                               “Control” or “Controlled” means with respect
to any Know-How, Patent Right or other intellectual property right, the
possession (whether by license, other than pursuant to this Agreement, or
ownership) by a Party or its Affiliates of the ability to grant to the other
Party or its Affiliates access and/or a license as provided herein without
violating the terms of any

 

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agreement or other arrangement with any Third Party pursuant to which the
relevant Party or its Affiliates derive their right, title or interest in such
intellectual property, and provided that the terms of such Third Party agreement
or arrangement are not entered into for the primary purpose of avoiding or
restricting any liability or obligation arising under this Agreement.

 

1.7                               “DecoGenâ Informatics System” or “DecoGen
Informatics System” shall mean the system that permits access to the HAP
Database and includes the DecoGenâ Data Manager Software and DecoGenâ Browser
Software and any associated user manuals, whether existing on the Effective Date
(as described in Exhibit 1.7) or developed by Genaissance during the Access
Period and Controlled by Genaissance.  For the avoidance of doubt, the DecoGen
Informatics System does not include (a) any source code, or (b) Third Party
software that Sciona or its Affiliates have independently of Genaissance
licensed from a Third Party.

 

1.8                               “Dual-Purpose Product” shall mean any Consumer
Product that includes a HAP Marker Genetic Test that may be used by a Licensed
Healthcare Practitioner to make a medical diagnosis for human subjects.

 

1.9                               “Field of Use” shall mean the (a) discovery of
HAP Marker Associations and (b) the development, manufacturing, marketing and
selling of HAP Marker Genetic Tests, in each case, solely for use by Sciona,
Affiliates of Sciona, and other Permitted Sciona Partners in the development,
manufacturing, marketing and selling of (i) Consumer Products and (ii)
Dual-Purpose Products to the extent that such products are (or, in the case of
products in development or manufacture, are intended to be) marketed and sold by
Sciona and Permitted Sciona Partners solely as Consumer Products, provided
however, that Genaissance retains the right to enter into Permitted Third Party
Agreements.  The Field of Use explicitly excludes the use of HAP Marker Genetic
Tests in the discovery, development, manufacture, marketing, selling or
prescribing of Medical Diagnosis Products, Prescription Products, or, to the
extent intended for uses other than as a Consumer Product, Dual Purpose
Products, and is subject to rights granted by Genaissance to Third Parties under
agreements that exist as of the Effective Date and are listed in Exhibit 1.9.

 

1.10                        “First Commercial Sale” shall mean the first sale
for use or consumption by the general public of a Genetic Test in a country.

 

1.11                        “Genaissance” shall mean Genaissance
Pharmaceuticals, Inc.

 

1.12                        “Genaissance Know-How” shall mean any Know-How
Controlled by Genaissance as of the Effective Date or during the Access Period,
including, without limitation, any data on the sequence, frequency and
distribution of HAP Markers and other information contained in the HAP Database.

 

1.13                        “Genaissance Patent Rights” shall mean, individually
and collectively, the HAP Marker Patent Rights and the HAP Marker Association
Patent Rights.

 

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1.14                        “Genaissance Territory” shall mean any country or
geographic region for which Genaissance operates a laboratory that meets all
material technical requirements reasonably requested by Sciona (or its
Affiliates) for performing the Genetic Tests.

 

1.15                        “Gene” means a nucleic acid sequence (including
allelic variations thereof) that (a) contains the sequence information for the
transcription, translation or amino acid sequence of a designated protein, and
(b) satisfies the criteria set forth in Exhibit 1.17 hereto.

 

1.16                        “Genetic Tests” shall mean individually and
collectively the HAP Marker Genetic Tests and the Sciona Genetic Tests.

 

1.17                        “HAPÔ Database” or “HAP Database” shall mean
Genaissance’s proprietary database containing annotated data on the sequence,
frequency and distribution of polymorphisms and HAP Markers discovered from
analysis of genetic material contained in the Index Repository, as more fully
described in Exhibit 1.17 hereto.

 

1.18                        “HAPÔ Marker” or “HAP Marker” shall mean any human
polymorphism or human haplotype that is present in the HAP Database at any time
during the Access Period.  The term HAP Marker shall not include any
polymorphism or haplotype that is obtained independently by Sciona without
access to the HAP Database or use of its contents, as evidenced by contemporary
written documents.

 

1.19                        “HAP Marker Association” shall mean an association
between a Phenotype and a specific HAP Marker or combination of HAP Markers,
including associations arising out of the activities described in Article 3. 
The term HAP Marker Association shall not include any association between a
Phenotype and a specific HAP Marker or combination of HAP Markers that is
obtained independently by Sciona without access to the HAP Database or use of
its contents, as evidenced by contemporary written documents.

 

1.20                        “HAP Marker Association Patent Rights” shall mean
Patent Rights claiming any HAP Marker Association or use thereof.

 

1.21                        “HAP Marker Genetic Test” shall mean a genetic test
that is designed for and intended for use in detecting the presence or absence
of one or more HAP Markers in a human individual, which test may be designed and
intended for additional uses.

 

1.22                        “HAP Marker Patent Rights” shall mean Patent Rights
claiming any HAP Markers, combination of HAP Markers or in each case, use
thereof.

 

1.23                        “Healthcare Practitioner” shall mean any provider of
health related advice or services to humans, including medical doctors,
dentists, optometrists, psychologists, physician assistants, nurses, nurse
practitioners, dieticians, genetic counselors, physical therapists and personal
fitness trainers.

 

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1.24                        “Index Repository” means Genaissance’s proprietary
collection of immortalized cell lines established from unrelated and related
individuals from various geographical origins and from members of extended
families.

 

1.25                        “Know-How” shall mean proprietary data, information,
inventions, practices, methods, knowledge, know-how, trade secrets, processes,
formulas, assays, skills, experience, techniques, results of experimentation and
testing, including clinical test data, analytical and quality control data,
regulatory submissions, copyrights, and other intellectual property of any kind,
not covered by claims of any Patent Rights, in each case owned or Controlled by
either Party or its Affiliates.

 

1.26                        “Licensed Healthcare Practitioner” shall mean any
Healthcare Practitioner who is licensed or authorized under the laws and
regulations of a country (or other applicable jurisdiction) to order
Prescription Products or Medical Diagnosis Products for humans.

 

1.27                        “Medical Diagnosis Product” shall mean any
diagnostic product or procedure that is intended for use in making a specific
medical diagnosis for human subjects, which use is lawful under applicable laws
or regulations or eligible for reimbursement by a governmental body or health
care payor in each case only if such use is prescribed by a Licensed Healthcare
Practitioner (in his/her capacity as such).

 

1.28                        “Net Revenues” shall mean collectively: (a) Net
Sales; (b) all revenues received by Sciona and its Affiliates from Third Parties
[**] in connection with [**]; and (c) all other revenue and consideration
received by Sciona and its Affiliates from Third Parties (including Permitted
Sciona Partners) in respect of [**], including [**].  For the avoidance of
doubt, revenues and other consideration received by Sciona and its Affiliates
hereunder shall include consideration in any form, including any license or
distribution signing fee, any license or distribution maintenance fee, minimum
royalty payments, lump sum payments and earned royalties, and shall also include
research and development funding and any consideration received for an equity
interest in, or other investment in Sciona (or an Affiliate) to the extent such
research and development funding or consideration is given as part of the same
transaction or related series of transactions with, and exceeds that which would
have been received in the absence of, the grant of the sublicense or other
rights hereunder.

 

1.29                        “Net Sales” shall mean the gross sales revenues
invoiced by Sciona and its Affiliates on the sale, transfer, disposition or
other provision of HAP Marker Genetic Tests, less the following customary
deductions: (i) normal and customary trade, cash and other discounts, allowances
and credits; (ii) credits or allowances actually granted for damaged goods,
returns or rejections; (iii) sales or similar taxes that are included in the
billing amount; (iv) freight, postage, shipping, customs duties and insurance
charges that are included in the billing amount and (v) actual bad debts.  The
transfer or sale of HAP Marker Genetic Tests by Sciona to an Affiliate of Sciona
shall not be considered a sale, but in such case, Net Revenues shall be
determined based

 

5

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on the invoiced sales price by the Affiliate to its Third Party customer, less
the deductions allowed under this Section 1.28.

 

1.30                        “Patent Rights” shall mean patents, patent
applications or supplementary protection certificates (SPCs) that are owned or
Controlled by a Party or its Affiliates.

 

1.31                        “Party” means Genaissance or Sciona, as the case may
be, and “Parties” means Genaissance and Sciona.

 

1.32                        “Permitted Sciona Partner” shall mean any (a)
Affiliate, (b) any Third Party that is granted a sublicense by Sciona as
permitted pursuant by Section 2.1(c) in its capacity as such sublicensee; and
(c) any other Third Party that is granted distribution rights (or other rights
to purchase for resale) with respect to HAP Marker Genetic Tests in its capacity
as such distributor; provided, that Sciona may not grant any Third Party
sublicense or distribution rights hereunder (other than with the prior written
consent of Genaissance) if Genaissance already has entered into an agreement
with such Third Party or its Affiliates, which agreement includes a license to
HAP Markers for use in the discovery, development, manufacturing, marketing or
selling of, or other activities relating to, Dual-Purpose Products, Prescription
Products or Medical Diagnosis Products.

 

1.33                        “Permitted Third Party Agreement” shall mean an
agreement that (a) is entered into after the Effective Date by Genaissance and a
Third Party who is engaged in the business of discovering, developing,
manufacturing, marketing or selling of Prescription Products or Medical
Diagnosis Products and (b) grants the Third Party a license to use the HAP
Database, the HAP Markers or the DecoGen Informatics System (the “Licensed
Technology”) in a field of use that includes the development, manufacturing,
marketing and selling of Consumer Products and one or more of Prescription
Products or Medical Diagnosis Products, provided, however, that (i) Genaissance
reasonably believes the Third Party intends to use the Licensed Technology to
discover, develop, manufacture, market or sell a Prescription Product or a
Medical Diagnosis Product, and (ii) if the Third Party seeks to partner with
Genaissance or an Affiliate of Genaissance to develop, manufacture, market or
sell a Consumer Product, then Genaissance will not agree to be such a partner
unless the Third Party agrees that Genaissance may use Sciona as Genaissance’s
exclusive partner for Consumer Products (and, for the avoidance of doubt, Sciona
shall have the right to require Genaissance to so partner with Sciona on an
exclusive basis).  For the avoidance of doubt, any such partnering arrangement
will be subject to Sciona’s and Genaissance’s rights and obligations under
Section 2.4, Section 2.5 and Article 3 of this Agreement.

 

1.34                        “Phenotype” shall mean (a) an individual’s response
to any substance or treatment, including Consumer Products and Prescription
Products, or (b) the presence of, or susceptibility for, any disease or
condition.

 

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1.35                        “Prescription Product” shall mean any therapeutic
product or therapeutic treatment that generally requires a prescription by a
Licensed Healthcare Practitioner under applicable laws or regulations or is
eligible for reimbursement by a governmental body or a health care provider only
if prescribed by a Licensed Healthcare Practitioner.

 

1.36                        “Sciona” or “Sciona Ltd.” shall mean Sciona Ltd.

 

1.37                        “Sciona Genetic Test” shall mean any genetic test
other than a HAP Marker Genetic Test that (a) is developed, marketed or sold
solely by Sciona or one of its Affiliates or jointly by Sciona or one of its
Affiliates and one or more other parties, which may include Genaissance, and (b)
is designed to detect the presence or absence of a polymorphism or haplotype in
a human individual.

 

1.38                        “Third Party” shall mean any corporation, person or
other entity other than Genaissance or Sciona or their respective Affiliates.

 

1.39                        “Transition Period” shall mean the period of time
commencing on the Effective Date and expiring on the first to occur of the
following: (a) [**] months thereafter, (b) on the date on which Sciona first
achieves positive net income determined in accordance with generally accepted
accounting principles in the United Kingdom consistently applied, or (c) on the
date on which Sciona and its Affiliates has first obtained or achieved
cumulative combined Third Party financing (equity or debt) and sales revenues of
at least $[**], as calculated on a monthly basis from the Effective Date.  For
the avoidance of doubt, the amount of financing or sales revenues obtained by
Sciona before the Effective Date shall not be applicable to subpart (c) of the
preceding sentence.

 

1.40                        “Valid Claim” means any claim of an issued and
unexpired patent comprising a Patent Right, which claim has not been held
unenforceable, unpatentable or invalid by a final decision of a court or
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue, re-examination or disclaimer and which is not
subject to an interference action.  “Valid Claim” also means any pending
application for a patent included within the Patent Rights to the extent the
invention(s) described in the claims of such application have not been abandoned
without being refiled in another application or finally rejected by an
administrative agency action from which no appeal can be taken.

 

1.41                        The following terms have the meanings set forth in
the corresponding Sections of this Agreement:

 

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Term

 

Section

“Access Period”

 

10.1(a)

“Genaissance Collaboration IP”

 

3.3

“HAP Marker Association Collaboration Agreement”

 

3.2

“Installation Site”

 

2.8(a)

“Investment Agreement”

 

5.1

“Joint Collaboration IP”

 

3.3

“Minimum Annual Payments”

 

5.4

“Royalties”

 

5.2

“Sciona Collaboration IP”

 

3.3

“Service Fees”

 

5.3

“Shares”

 

5.1

“Software Product”

 

2.8(c)

“Sublease”

 

4.1

 

1.42                        Interpretation.  Whenever any provision of this
Agreement uses the term “including” (or “includes”), such term shall be deemed
to mean “including without limitation” and “including but not limited to” (or
“includes without limitations” and “includes but is not limited to”) regardless
of whether the words “without limitation” or “but not limited to” actually
follow the term “including” (or “includes”); “herein,” “hereby,” “hereunder,”
“hereof” and other equivalent words shall refer to this Agreement as an entirety
and not solely to the particular portion of this Agreement in which any such
word is used; all definitions set forth herein shall be deemed applicable
whether the words defined are used herein in the singular or the plural;
wherever used herein, any pronoun or pronouns shall be deemed to include both
the singular and plural and to cover all genders; all references to days,
months, quarters or years are references to calendar days, calendar months,
calendar quarters or calendar years; and any reference to any federal, national,
state, local or foreign statute or law shall be deemed to also refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise.

 

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2.                                      GRANT OF RIGHTS

 

2.1                               HAP Technology License in the Field of Use.

 

(a)                                  During the Access Period.  Subject to the
terms and conditions of this Agreement, Genaissance hereby grants to Sciona the
exclusive, worldwide license (with the limited rights to sublicense as set forth
in Section 2.1(c)) under Genaissance Know-How and Genaissance Patent Rights to
use the HAP Database, the HAP Markers and the DecoGen Informatics System solely
in the Field of Use during the Access Period.  Without limiting the rights and
remedies contained in Section 10.4(b) or otherwise available, if at any time
Sciona breaches a provision of Section 5.4 and Sciona fails to cure such breach
within [**] days after receipt of written notice from Genaissance (which notice
shall be served by Genaissance within [**] days following Genaissance’s actual
knowledge of such breach), Genaissance may, at its sole option, convert the
exclusive license described in clause 2.1(a)(i) to a non-exclusive license upon
written notice to Sciona; unless Sciona’s breach is solely due to Genaissance’s
failure to perform, in all material respects, its obligations under this
Agreement or any agreement entered into by the Parties with respect to Genetic
Tests as described in Sections 2.4 and 2.5.

 

(b)                                 Following the Access Period.  Subject to the
terms and conditions of this Agreement, Genaissance hereby grants to Sciona the
exclusive, worldwide license (with the limited rights to sublicense as set forth
in Section 2.1(c)) under Genaissance Know-How and Genaissance Patent Rights to
use HAP Markers solely in the further development, manufacturing, marketing and
selling of HAP Marker Genetic Tests solely for use by Sciona, Affiliates of
Sciona, and other Permitted Sciona Partners in the development, manufacturing,
marketing and selling of (i) Consumer Products and (ii) Dual-Purpose Products to
the extent that such products are (or, in the case of products in development or
manufacture, are intended to be) marketed and sold by Sciona and Permitted
Sciona Partners solely as Consumer Products; provided, that, in each case, such
HAP Markers may only be used in HAP Marker Genetic Tests developed solely by
Sciona (or one of its Affiliates) or jointly by the Parties during the Access
Period pursuant to Article 3 herein.

 

(c)                                  Sublicense Rights.  Sciona shall have the
right to grant sublicenses of the rights granted pursuant to this Section 2.1
and Section 3.3 to its Affiliates.  In addition, to the extent required for the
development, manufacture, marketing, selling or performance of HAP Marker
Genetic Tests as permitted under the license rights granted to Sciona pursuant
to this Section 2.1 and Section 3.3, and consistent with the rights granted to
Genaissance pursuant to Section 2.4, Sciona shall have the right to grant Third
Parties the right to use the HAP Markers to be detected by such HAP Marker
Genetic Tests.  Except to the extent provided in the prior sentences, with
respect to use of certain HAP Markers, Sciona’s right to sublicense use of the
HAP Database shall be limited to only such portions of the HAP Database as may
be necessary to market and sell HAP Marker Genetic Tests, Consumer Products and
Dual Purpose Products as may be agreed to by the Parties from time to time,
which agreement by Genaissance may not be unreasonably delayed or withheld.

 

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2.2                               HAP Technology Rights Outside the Field of
Use.  Subject to any pre-existing Third Party rights, Genaissance hereby grants
to Sciona a non-exclusive option during the Access Period to obtain the
non-exclusive license under the Genaissance Patent Rights and Genaissance
Know-How to use the HAP Database, HAP Markers and the DecoGen Informatics System
outside of the Field of Use on such terms and conditions as the Parties may
negotiate in good faith.  For the avoidance of doubt, such option shall not be
applicable with respect to any pre-existing exclusive Third Party rights or any
exclusive rights granted by Genaissance to Third Parties at any time during the
Access Period.

 

2.3                               Reservation of Rights.  Notwithstanding the
rights granted to Sciona under this Article 2, Genaissance at all times reserves
(a) its rights to the HAP Markers and other information contained in the HAP
Database, (b) its right to use the HAP Database and DecoGen Informatics System
to research, develop, have developed, use, manufacture, have manufactured, sell
and have sold products, including the right to grant exclusive and non-exclusive
licenses to Third Parties with respect to Genaissance Know-How or Patent Rights
related to such purposes outside the Field of Use, and (c) its right to perform
genotyping services for Third Parties engaged in the business of discovering,
developing, manufacturing, marketing or selling of Consumer Products even if the
polymorphisms to be genotyped pursuant to such services are in the HAP Database,
provided, however, that such polymorphisms are specified solely by the Third
Party without access to or use of the HAP Database.

 

2.4                               HAP Marker Genetic Tests.  Sciona hereby
grants to Genaissance the exclusive right during the Access Period (a) to
develop genotyping assays for the HAP Marker Genetic Tests, and (b) subject to
any pre-existing Sciona arrangement described on Schedule 2.4, to process or
perform HAP Marker Genetic Tests sold by Sciona and Permitted Sciona Partners to
customers in a Genaissance Territory and returned by the consumer (or relevant
Third Party) for analysis.  The specific assay quality and other performance
requirements for such services shall be agreed to by the Parties on a
project-by-project basis.  Sciona shall pay Genaissance fees for such assay
development services and for such performance of HAP Marker Genetic Tests, which
fees shall be determined in accordance with Section 5.3.  If Genaissance fails
to perform satisfactorily, in all material respects, the services described in
this Section 2.4 with respect to a specific HAP Marker Genetic Test, then Sciona
(or any applicable Permitted Sciona Partner) shall be able to enter into an
agreement with a Third Party for the provision of such services with respect to
such HAP Marker Genetic Test.

 

2.5                               Sciona Genetic Tests.

 

(a)                                  Rights of First Negotiation.  As provided
in Section 2.5(b) below, Sciona shall grant to Genaissance and its Affiliates
rights of first negotiation during the Access Period: (i) to develop genotyping
assays for any and all Sciona Genetic Tests, and (ii) subject to any
pre-existing Sciona arrangement described on Schedule 2.4 (as amended from time
to time), to perform any and all Sciona Genetic Tests sold in a Genaissance
Territory.  Sciona shall pay

 

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Genaissance fees for such assay development services and for such performance of
the Sciona Genetic Tests, which fees shall be determined in accordance with
Section 5.3.

 

(b)                                 Notice.  If, at any time during the Access
Period, Sciona wishes to develop a new Sciona Genetic Test or materially change
an existing Sciona Genetic Test, or Sciona wishes to sell Sciona Genetic Tests
in a Genaissance Territory, then save to the extent that the development, change
or sale of such Sciona Genetic Test is subject to any pre-existing Sciona
arrangement described on Schedule 2.4 (as amended from time to time), Sciona
shall promptly notify Genaissance and grant Genaissance the exclusive right to
negotiate, in accordance with Section 2.5(c), the right to develop genotyping
assays for such Genetic Test, or perform such Genetic Test in the Genaissance
Territory, as the case may be.

 

(c)                                  Negotiating Period. If Genaissance notifies
Sciona within [**] days after receipt of the notice described in Section 2.5(b)
that Genaissance desires to negotiate an arrangement regarding the relevant
Sciona Genetic Test, then for [**] days following Genaissance’s notice, Sciona
will negotiate [**] with Genaissance on a good faith basis to reach a definitive
agreement with Genaissance with respect to the Sciona Genetic Test.  If
Genaissance fails to provide written notice to Sciona as specified in this
Section 2.5(c) or the Parties fail to reach agreement on the principal terms of
such arrangement (including compensation) within [**] days after Genaissance
provides Sciona with written notice, Sciona will be permitted to enter into
negotiations and conclude an agreement with a Third Party, subject to
Genaissance having a [**] day right of refusal to substantially match any
agreement reached by Sciona and a Third Party.

 

2.6                               No Grant of Other Technology or Patent Rights
and Covenant Not to Sue.

 

(a)                                  Except as otherwise expressly provided in
this Agreement, under no circumstances shall a Party hereto or its Affiliates,
as a result of this Agreement, obtain any ownership interest in or other right
to any technology, know-how, patents, patent applications, data, products, or
biological materials of the other Party or its Affiliates, including items
owned, Controlled or developed by the other Party or its Affiliates, or
transferred by the other Party or its Affiliates to said Party, at any time
pursuant to this Agreement.

 

(b)                                 Genaissance covenants and agrees (on its
behalf and on behalf of its Affiliates) that, for so long as Sciona is compliant
with its royalty obligations pursuant to Section 5.2, it shall not assert
against Sciona or any Permitted Sciona Partner any patent or other intellectual
property right that would block Sciona or Permitted Sciona Partners from
exercising the license rights granted pursuant to Sections 2.1 and 3.3.

 

2.7                               Third Party Patents.  The Parties acknowledge
that, in order to discover, develop and/or commercialize one or more products,
they may require licenses under Third Party patent rights or other rights, and
it is hereby agreed that it shall be each Party’s responsibility to satisfy
itself as to the need for such licenses and, if necessary, to obtain such
licenses at its sole cost and expense.

 

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2.8                               Installation and Use of the HAP Technology.

 

(a)                                  Installation, Training, Support and
Updates.  Genaissance shall install, [**] the DecoGen Informatics System and the
HAP Database on a Sciona database server at Sciona’s [**] facility located at
[**] (the “Installation Site”) at a time mutually agreed upon by the Parties. 
Genaissance will provide, [**] of on-site training at the Installation Site,
installation documentation, and a user manual.  For the duration of the Access
Period, phone or email support will also be available to Sciona between the
hours of 8:30 A.M. and 5:30 P.M. (Eastern Standard Time) Mondays through
Fridays, except when Genaissance is officially closed (e.g., for holidays or
weather emergencies).  Genaissance shall provide any updates to the DecoGen
Informatics System and the HAP Database at the Installation Site on a [**]
basis.

 

(b)                                 Remote Access.  Sciona may access the
DecoGen Informatics System and the HAP Database at the Installation Site from
computers at other remote Sciona sites and Sciona shall have the right to
install copies of the DecoGen Informatics System and the HAP Database at
different Sciona sites (or have all copies transferred to another Sciona site). 
Should Sciona request the assistance of Genaissance in accessing or transferring
the DecoGen Informatics System and the HAP Database, Sciona shall reimburse
Genaissance for [**] in providing such assistance.

 

(c)                                  Restrictions on Use.  Sciona’s use of the
DecoGen Informatics System and the HAP Database (each, a “Software Product”)
shall be subject to the following conditions:

 

(i)                                     To the extent that a Software Product
incorporates or requires the use of any commercially available operating system
software that is licensed by Genaissance from a Third Party as described in
Exhibit 1.7, as may be supplemented from time to time, and Genaissance does not
have the right to freely sublicense such Third Party software, Sciona shall be
responsible for obtaining any necessary license and paying all fees and charges
associated with Sciona’s use of any such software;

 

(ii)                                  Sciona agrees to use the Software Products
in accordance with the terms and conditions of this Agreement and not to use the
Software Products for processing data for Third Parties other than Permitted
Sciona Partners, or to make the Software Product(s) available to Third Parties
except as permitted pursuant to Section 2.1(c);

 

(iii)                               Sciona agrees to make copies of the Software
Products (or any part of the contents thereof) only to the extent reasonably
necessary for the exercise of its rights hereunder, and that all such copies
will be treated as Confidential Information of Genaissance and further agrees to
establish reasonable security measures to prevent copies of the Software
Products from being made available to unauthorized Third Parties;

 

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(iv)                              Except with the express written permission of
Genaissance, Sciona agrees that it will not attempt to reverse engineer, reverse
compile or otherwise obtain access to the source code of the Software Products;
and

 

(v)                                 Sciona may not adapt or modify the Software
Products without the express written permission of Genaissance.

 

3.                                      HAP MARKER ASSOCIATION DISCOVERY
SERVICES.

 

3.1                               Collaboration.  During the Access Period, (a)
Sciona and its Affiliates shall collaborate with Genaissance and its Affiliates
on an exclusive basis to discover HAP Marker Associations in the Field of Use
(including Dual-Purpose Products) or to sell (or provide to Third Parties) HAP
Marker Association discovery services in the Field of Use; and (b) Genaissance
and its Affiliates shall collaborate with Sciona and its Affiliates on an
exclusive basis to discover HAP Marker Associations in the Field of Use or to
sell (or provide to Third Parties) HAP Marker Association discovery services in
the Field of Use; provided, that if Sciona’s exclusive license described in
clause 2.1(a)(i) is converted to a non-exclusive license pursuant to
Section 2.1(a), the obligation of Genaissance and its Affiliates to collaborate
on an exclusive basis shall be converted to a non-exclusive obligation.

 

3.2                               HAP Marker Association Collaboration
Agreement.  The further terms that the Parties may agree to from time to time in
relation to any collaboration to discover HAP Marker Associations will be the
subject of a separate agreement to be negotiated in good faith by the Parties (a
“HAP Marker Association Collaboration Agreement”).  The fee paid by Sciona for
any particular service performed pursuant to a HAP Marker Association
Collaboration Agreement shall [**].

 

3.3                               Intellectual Property Rights.  Save as
otherwise expressly agreed in the HAP Marker Association Collaboration
Agreement, (i) Genaissance shall own all HAP Marker Association Patent Rights
and related Know-How conceived or reduced to practice by either Party or its
Affiliates in the conduct of such collaboration and all other intellectual
property conceived or reduced to practice solely by employees, agents and
consultants of Genaissance or its Affiliates in the conduct of such
collaboration (collectively the “Genaissance Collaboration IP”), subject to the
exclusive right to Sciona to exploit the Genaissance Collaboration IP in the
Field of Use as provided in Section 2.1; (ii) Sciona shall own all other
intellectual property conceived or reduced to practice solely by employees,
agents or consultants of Sciona or its Affiliates in the conduct of such
collaboration (the “Sciona Collaboration IP”), subject to a non-exclusive right
to Genaissance and its Affiliates to exploit the Sciona Collaboration IP outside
of the Field of Use; and (iii) all other intellectual property conceived or
reduced to practice jointly by employees, agents or consultants of Sciona or its
Affiliates and employees, agents and consultants of Genaissance or its
Affiliates in the conduct of such collaboration (the “Joint Collaboration IP”)
shall be owned jointly by Genaissance and Sciona; provided, that Sciona shall
have the exclusive right to exploit all such Joint Collaboration IP in the Field
of Use as

 

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provided in Section 2.1 and both Parties shall have the non-exclusive right to
exploit all such Joint Collaboration IP outside of the Field of Use.  With
respect to the Joint Collaboration IP, subject to each Party’s license rights,
each of the Parties shall be free to use and exploit the Joint Collaboration IP
without any accounting or payment to, or consent of, the other Party; provided,
that either Party may only sell, license, sub-license or otherwise transfer its
rights in any such invention without the consent of the other Party in a manner
that is consistent with the licenses granted pursuant to this Agreement and is
otherwise consistent with this Agreement.

 

4.                                      PRODUCT AND BUSINESS DEVELOPMENT

 

4.1                               United States Operations.  Unless otherwise
agreed to by the Parties, during the Access Period and subject to the consent of
Genaissance’s landlord, Genaissance shall grant Sciona and its Affiliates the
right to occupy and conduct their business from premises located at Five Science
Park, New Haven, Connecticut as provided in a sublease agreement, by and between
the Parties (the “Sublease”), substantially in the form as Exhibit 4.1 hereto. 
The Sublease shall provide, among other things, that (a) Genaissance [**] Sciona
[**] during the Transition Period, and (b) following the Transition Period, for
the remainder of the Access Period (or if shorter, such period as Sciona is in
actual occupation of such space pursuant to the Sublease), Sciona [**]
Genaissance [**]  Unless otherwise agreed by the Parties, the Sublease shall
[**].

 

4.2                               Business Development Support.  During the
Transition Period, Genaissance shall provide Sciona or its United States’
Affiliate with the following business development and technical support
services: (a) one full time project manager (the identity of which manager shall
be reasonably acceptable to Sciona and Genaissance and who shall be an employee
of Genaissance); (b) [**] percent ([**]%) of the costs of a senior business
development manager (which manager shall initially be Melisse Shaban and
thereafter, such person shall be reasonably acceptable to Sciona and Genaissance
and who shall be a consultant hired for such purpose or otherwise an employee of
Genaissance), (c) access to senior Genaissance scientists, including the [**] to
support Sciona’s business development activities as reasonably required by
Sciona but not to exceed [**] percent ([**]%) of a full-time equivalent unless
otherwise agreed to by Genaissance, (d) [**] percent ([**]%) of the Third Party
search fee to identify and recruit a Chief Executive Officer for Sciona, and (e)
use of other facilities and members of Genaissance’s [**] teams from
time-to-time as reasonably required by Sciona to carry out the operations
contemplated by this Agreement.  Such services shall be subject to such
reasonable limitations as the Parties shall negotiate in good faith upon the
reasonable request of Genaissance.

 

5.                                      FINANCIAL TERMS

 

5.1                               Shares of Sciona Stock.  As consideration for
the rights granted to Sciona pursuant to Article 2, Genaissance will acquire
152,290 shares of Sciona stock (the “Shares”) pursuant to the terms of an
Investment Agreement, dated as of the Effective Date, by and between the Parties
in substantially the form of Exhibit 5.1 hereto (the “Investment Agreement”).

 

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The number of Shares issued to Genaissance is, as of the Effective Date, equal
to thirty percent (30%) of the issued share capital of Sciona on a fully diluted
basis taking into account: (i) all unissued shares in the capital of Sciona
allocated to the employee option pool of Sciona (whether or not options have
been granted over such shares and in any event being not less than 50,408
Ordinary Shares, (ii) 44,444 A Ordinary Shares which may be issued in connection
with [**] (whether or not such deferred consideration shares are actually
issued), and (iii) the Shares acquired by Genaissance pursuant to the Investment
Agreement.

 

5.2                               Royalties.  Sciona will pay Genaissance, on a
quarterly basis, a royalty equal to [**] percent ([**]%) of Net Revenues, less
any Service Fees paid to Genaissance by Sciona for the performance of HAP Marker
Genetic Tests in the Genaissance Territory during such quarter (the “Royalty”). 
The Royalties shall be payable on a country-by-county and Test-by-Test basis for
the longer of (a) ten (10) years after the date of First Commercial Sale of such
Genetic Test, or (b) the last to expire of Genaissance’s Patent Rights covering
any applicable HAP Marker(s) or HAP Marker Association.  The Royalties shall be
due within [**] days following the end of each quarter.  The Parties acknowledge
that Royalties may be payable after the expiration of the life of all Valid
Claims covering the applicable HAP Marker(s) or HAP Marker Association; however,
the Parties have agreed that such Royalties are payable on the sale of products
that were developed only during the life of such Claims and that no Royalty is
payable on any products developed by the practice of such Claims after their
expiration.  Because of the nature of the Valid Claims, the Parties believe that
their economic value can be measured only by reference to the sales of products
developed by the practice of such Valid Claims and such method is fair and
equitable, even though the sales may occur following expiration of the Valid
Claims.

 

5.3                               Service Fees.  In consideration for the
development of genotyping assays for the Genetic Tests and the performance of
such Genetic Tests in a Genaissance Territory (as described in Sections 2.4 and
2.5 above), Sciona will pay Genaissance fees to be agreed to by the Parties on a
project-by-project basis, which fees shall [**], plus [**] percent ([**]%) (the
“Service Fees”).

 

5.4                               Minimum Payments.  Sciona shall pay
Genaissance the following aggregate minimum levels of Royalties and Service Fees
(the “Minimum Annual Payment”) each year during the Access Period:

 

Calendar Year

 

Minimum Annual Payment

 

 

 

2003

 

$

[**]

2004

 

$

[**]

2005

 

$

[**]

2006

 

$

[**]

2007

 

$

[**]

 

[**] shall be payable after the Access Period.  For 2003, the aggregate
Royalties and Service Fees paid by Sciona to Genaissance shall be calculated
within [**] days following [**]; thereafter, the

 

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aggregate Royalties and Service Fees paid by Sciona to Genaissance shall be
calculated every [**] (i.e., within [**] days following [**]).  In the event
that the aggregate Royalties and Services Fees are less than the Minimum Annual
Payment (or [**] percent ([**]%) of the Minimum Annual Payment for calculations
made [**]), Sciona will pay Genaissance the Minimum Annual Payment (or [**]
percent ([**]%) thereof as applicable) less the aggregate Royalties and Service
Fees paid by Sciona.  Such payment shall be made within [**] days following
[**], as applicable.

 

5.5                               Royalty Reports and Audits.

 

(a)                                  Royalty Reports.  Within [**] days
following each quarter, Sciona shall furnish to Genaissance a written quarterly
report showing: (i) the gross sales of HAP Marker Genetic Tests during the
reporting period and the calculation of Net Revenues from such gross sales
(including the deductions allowed under Section 1.28); (ii) all other
consideration received by Sciona and its Affiliates in connection with this
Agreement; (iii) the Service Fees paid to Genaissance during the reporting
period; (iv) the calculations of Net Sales, Net Revenues and Royalties for such
reporting period; (v) withholding taxes, if any, required by law to be deducted
in respect of such Royalties; (vi) the dates of the First Commercial Sales of
HAP Marker Genetic Tests in any country during the reporting period; and (vii)
the exchange rates used in determining the amount of United States dollars
payable hereunder.  If no Royalty is due for any royalty period hereunder,
Sciona shall so report.  Sciona and its Affiliates shall keep complete and
accurate records in sufficient detail to properly reflect Net Revenues and to
enable the Royalties payable hereunder to be determined.

 

(b)                                 Audits.  Upon the written request of
Genaissance, Sciona shall permit an independent certified public accountant
selected by Genaissance and acceptable to Sciona, which acceptance shall not be
unreasonably withheld, to have access during normal business hours to such
records of Sciona and its Affiliates as may be necessary to verify the accuracy
of the Royalties described herein.  Both Parties shall use commercially
reasonable efforts to schedule all such verifications within [**] days after
Genaissance makes its written request.  In the event Genaissance’s independent
certified public accountant concludes that additional Royalties were owed to
Genaissance during such period, the additional Royalty shall be paid by Sciona
within [**] days of the date Genaissance delivers to Sciona such independent
certified public accountant’s written report so concluding, with interest
thereon accruing under this Agreement.  In the event Genaissance’s independent
certified public accountant concludes that there was an overpayment of Royalties
to Genaissance during such period, the overpayment shall be repaid by
Genaissance within [**] days of the date Genaissance received such independent
certified public accountant’s written report so concluding.  The fees charged by
such independent certified public accountant shall be paid by Genaissance unless
the audit discloses an underpayment of the Royalties payable by Sciona for the
audited period of more than [**] percent ([**]%), in which case Sciona shall pay
the reasonable fees and expenses charged by such representative.

 

5.6                               Withholding Taxes.  Sciona shall deduct
withholding taxes from Royalties and pay them to the proper tax authorities only
to the extent required by applicable laws.  Sciona shall

 

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be responsible for all other taxes, duties and other governmental charges,
including value added taxes (VAT) and import duties, and shall not deduct any
other withholding or any other taxes, duties or governmental charges from the
payments under this Agreement, save to the extent required by applicable laws. 
Sciona shall maintain official receipts of payment of any withholding taxes and
forward these receipts to Genaissance within [**] days.  The Parties will
exercise diligent efforts to ensure that any withholding taxes imposed are
reduced as far as possible under the provision of any treaties applicable to any
payment made hereunder.

 

5.7                               Late Payments.  Any payments that have not
been paid thirty (30) days after the date such payments are due under this
Agreement shall entitle, but not obligate, Genaissance to charge interest on the
outstanding payment at a rate equal to the prime rate as published in The Wall
Street Journal, Eastern Edition, on the first day of each calendar quarter in
which such payments are overdue, plus two (2) percentage points, calculated on
the number of days such payment is delinquent.

 

5.8                               Currency Exchange; Blocked Currency.  All
payments shall be made in United States dollars in immediately available funds. 
With respect to Net Revenues invoiced or received (as the case may be) in a
currency other than United States dollars, the Royalties shall be expressed in
the foreign currency of the entity making and then converted to United States
dollars by using the selling exchange rate for conversion of the foreign
currency into United States Dollars, quoted for current transactions reported
under the heading “Currency Trading – Exchange Rates” in The Wall Street Journal
in the United States for the last business day of such reporting period to which
such payment pertains.  If The Wall Street Journal ceases to be published, then
the rate of exchange to be used shall be that reported in such other business
publication of national circulation in the United States as the Parties
reasonably agree.  If at any time legal restrictions in any country prevent the
prompt remittance of any payments with respect to sales or services in that
country, Sciona shall have the right and option to make such payments by
depositing the amount thereof in local currency to Genaissance’s account in a
bank or depository in such country.

 

6.                                      INTELLECTUAL PROPERTY

 

6.1                               Ownership of Intellectual Property.

 

(a)                                  Ownership of the HAP Marker Database and
DecoGen Informatics System.  Subject to the rights and licenses granted under
this Agreement, and subject to any pre-existing rights of Third Parties,
Genaissance shall have sole ownership of (i) the HAP Database and all
information contained therein, and (ii) the DecoGen Informatics System.

 

(b)                                 Ownership of HAP Markers.  Genaissance shall
have sole ownership of all right, title and interest in all HAP Markers, and,
subject to Section 6.2(c) all HAP Marker Patent Rights.  Sciona and its
Affiliates shall execute and deliver, without charge to Genaissance (other than
reimbursement of Sciona’s reasonable out of pocket costs and expenses),
assignment of all

 

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of its right, title and interest in and to HAP Markers to Genaissance subject to
Sciona’s right to use the HAP Markers pursuant to the terms of this Agreement.

 

(c)                                  Ownership of HAP Marker Associations. 
Genaissance shall have sole ownership of all right, title and interest in all
HAP Marker Associations and, subject to Section 6.2(c), all HAP Marker
Association Patent Rights, including without limitation Genaissance
Collaboration IP.  Sciona and its Affiliates shall disclose to Genaissance any
HAP Marker Associations discovered solely by employees of Sciona or its
Affiliates or others acting on their behalf.  All information relating to such
HAP Marker Associations shall be deemed the Confidential Information of
Genaissance subject to the terms of Article 7, and Genaissance shall take all
reasonable steps to maintain such information in confidence consistent with
those steps taken to protect other information that Genaissance regards as
proprietary or confidential and that is of similar value or importance.  Sciona
shall execute and deliver, without charge to Genaissance (other than
reimbursement of Sciona’s reasonable out of pocket costs and expenses),
assignment of all of its right, title and interest in and to HAP Marker
Associations to Genaissance subject to Sciona’s right to use the HAP Marker
Associations pursuant to the terms of this Agreement.

 

(d)                                 Cooperation of Employees.  Each Party
represents and agrees that all employees or others acting on its behalf or on
behalf of its Affiliates pursuant to this Agreement shall be obligated under a
binding written agreement to assign to such Party all inventions made or
conceived by such employee or other person.

 

6.2                               Filing, Prosecution and Maintenance of Patent
Rights.

 

(a)                                  Filing, Prosecution and Maintenance. 
Subject to Section 6.2(c) below, Genaissance shall have sole responsibility for
and control over the filing, prosecution and maintenance of the Genaissance
Patent Rights, [**].

 

(b)                                 Cooperation.  Genaissance shall keep Sciona
informed regarding the status and prosecution of the HAP Marker Patent Rights
and the HAP Marker Association Patent Rights licensed to Sciona.  Sciona shall
be provided [**] with copies of all correspondence with the U.S. Patent &
Trademark Office (or the applicable foreign patent office) and with the
opportunity to review and comment upon any papers, responses or other filings
prepared by Genaissance for submission to the said offices [**] of their filing
and Genaissance shall use reasonable efforts to incorporate any comments
requested by Sciona.

 

(c)                                  Assignment.  In the event that (i)
Genaissance determines that it will not seek Patent Rights with respect to any
potentially patentable HAP Marker or HAP Marker Association licensed to Sciona
pursuant to Section 2.1(a), or (ii) Genaissance files patents claiming HAP
Markers or HAP Marker Associations in one or more countries but subsequently
determines, on a country-by-country basis, that it will not file, prosecute or
maintain any Genaissance Patent Right for which Sciona has license rights, then
Genaissance shall promptly notify Sciona and any other licensee of such
Genaissance Patent Rights of its decision.  Sciona and any other licensee of
such

 

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Genaissance Patent Rights shall, without charge to Sciona (other than
reimbursement of Genaissance’s reasonable out of pocket costs and expenses) have
the option to require Genaissance to assign absolutely all right, title and
interest in such Genaissance Patent Rights to Sciona and any such other
licensee.

 

6.3                               Enforcement of the Patent Rights.

 

(a)                                  Right to Enforce by Genaissance.  Each
Party agrees to provide written notice to the other Party promptly after
becoming aware of any infringement of any of the Genaissance Patent Rights
licensed to Sciona.  The Parties shall discuss a strategy to prosecute any such
infringement.  If the Parties do not agree on whether or how to proceed with
enforcement activity (i) within [**] days following the notice of alleged
infringement, or (ii) within [**] days before the time limit, if any, set forth
in the appropriate laws and regulations for filing of such actions, whichever
comes first, then Genaissance shall have the right, but not the obligation, to
take any action that it reasonably deems necessary to obtain a discontinuance of
such infringement or to bring suit against the Third Party infringer.  Sciona
and its Affiliates will reasonably cooperate with Genaissance in any such suit
or action and Genaissance shall reimburse Sciona and its Affiliates for their
reasonable out of pocket expenses as provided in Section 6.3(c) below. 
Genaissance shall keep Sciona reasonably informed of all material developments
in connection with any such claim, suit or proceeding.

 

(b)                                 Right to Enforce by Sciona.  In the event
Genaissance does not take any action to obtain a discontinuance of such
infringement or bring suit against the Third Party infringer within [**], then
Sciona shall have the right, but not the obligation, at its own expense to bring
suit against the Third Party infringer.  If required by law, Genaissance shall
permit any action under this Section 6.3 to be brought in its name, including
being joined as party-plaintiffs.  Sciona acknowledges that other Third Parties
may be licensees of the Genaissance Patent Rights and shall have rights
identical to Sciona to prosecute infringers.  In any suit or action by Sciona in
which Genaissance, as necessary, is named a party-plaintiff as owner of the
Genaissance Patent Rights, Genaissance shall notify such other licensees, if
any, of the existence of such legal action and allow the other licensees to join
as a plaintiff upon such licensees’ request.  In addition, in the event another
licensee instigates an infringement suit or action, Sciona and its Affiliates
hereby consent to being joined as plaintiffs in such suit solely for the purpose
of procuring standing to bring the action and at the sole expense of the
instigating licensee.  To the extent Sciona desires to participate in any
strategic decisions affecting the prosecution of the action brought by another
licensee, Sciona acknowledges that it and the other licensee(s) will necessarily
have to reach a mutual agreement concerning strategy, litigation expenses and
subject to Section 6.3(c) below, sharing of any recovery or damages.  In no
event shall Sciona or any other licensee enter into any settlement which admits
or concedes that any aspect of the Genaissance Patent Rights is invalid or
unenforceable without the prior written consent of Genaissance, which consent
shall not be unreasonably withheld or delayed.  Genaissance will reasonably
cooperate with Sciona and any other licensee in any suit or action and Sciona
shall reimburse Genaissance and its Affiliates for their reasonable out of
pocket expenses as provided in Section 6.3(c) below.  In no event shall

 

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Genaissance incur any liability or expense in connection with any action of
Sciona or its Affiliates or any joint action of Sciona or its Affiliates and any
other licensee.

 

(c)                                  Procedures; Expenses and Recoveries. 
Subject to any Third Party licensee’s rights as described in Section 6.3(b), the
Party initiating any infringement suit or action under this Section 6.3 shall
have the sole and exclusive right to select counsel for any such suit or action
and shall pay all expenses of the suit, including attorneys’ fees and court
costs.  If such Party obtains any damages, license fees, royalties or other
compensation (including any amount received in settlement of such litigation) in
connection with such suit or action, such amounts shall be allocated between the
Parties as follows:

 

(i)                                     First, the Party (and its Affiliates)
initiating such suit or action shall be reimbursed for all expenses of the suit
or action, including attorneys’ fees and disbursements, court costs and other
litigation expenses not otherwise recovered;

 

(ii)                                  Second, the other Party (and its
Affiliates) shall be reimbursed for all expenses of the suit or action,
including attorneys’ fees and disbursements, court costs and other litigation
expenses not otherwise recovered; and

 

(iii)                               Third, the balance shall be allocated
between the Parties as follows: [**] percent ([**]%) to the Party initiating the
suit or action and [**] percent ([**]%) to the other Party.

 

6.4                               Patent Marking.  Sciona agrees to comply (and
to cause its Affiliates and other Permitted Sciona Partners to comply) with any
applicable patent marking statutes in any country in which HAP Marker Genetic
Tests are sold hereunder.

 

7.                                      CONFIDENTIALITY

 

7.1                               Confidential Information.       All
Confidential Information disclosed by a Party or its Affiliates (the “Disclosing
Party”) to the other Party or its Affiliates (the “Receiving Party”) during the
term of this Agreement shall not be used by the Receiving Party except in
connection with the activities contemplated by this Agreement or in order to
further the purposes of this Agreement, shall be maintained in confidence by the
Receiving Party and shall not otherwise be disclosed by the Receiving Party to
any Third Party who is not a consultant of, or an advisor to, or a Permitted
Sciona Partner of, the Receiving Party, without the prior written consent of the
Disclosing Party, except to the extent that the Confidential Information:  (a)
was known or used by the Receiving Party prior to its date of disclosure to the
Receiving Party, as demonstrated by legally admissible evidence available to the
Receiving Party; (b) either before or after the date of the disclosure to the
Receiving Party is lawfully disclosed to the Receiving Party by sources other
than the Disclosing Party rightfully in possession of the Confidential
Information and not bound by confidentiality obligations to the Disclosing
Party; (c) either before or after the date of the disclosure to the Receiving
Party becomes published or generally known to the public through no

 

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fault or omission on the part of the Receiving Party; or (d) is independently
developed by or for the Receiving Party without reference to or reliance upon
the Confidential Information, as demonstrated by competent written records.  In
addition, the provisions of this Section 7.1 shall not preclude the Receiving
Party from disclosing Confidential Information to the extent such Confidential
Information is required to be disclosed by the Receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations; provided that the Receiving Party provides prior
written notice of such disclosure to the Disclosing Party, provides the
Disclosing Party, to the extent possible, with sufficient time and opportunity
to obtain a protective order for such Confidential Information and takes
reasonable and lawful actions to avoid and/or minimize the degree of such
disclosure.  Specific information shall not be deemed to be within any of the
foregoing exclusions merely because it is embraced by more general information
falling within these exclusions.

 

7.2                               Employee and Advisor Obligations.  Genaissance
and Sciona each agree that they shall provide Confidential Information received
from the other Party or its Affiliates only to their respective employees,
consultants, advisors, Permitted Sciona Partners who have a need to know such
Confidential Information to assist such Party or its Affiliates in fulfilling
its obligations under this Agreement, provided that such Affiliates, employees,
consultants, advisors, and Permitted Sciona Partners agree to treat such
information and materials as confidential and to use such information and
materials in accordance with the terms of this Agreement.

 

7.3                               Injunctive Relief.  The Parties hereto
understand and agree that remedies at law may be inadequate to protect against
any breach of any of the provisions of this Article 7 by either Party or their
Affiliates, employees, agents, officers or directors or any other person acting
in concert with it or on its behalf.  Accordingly, each Party and its Affiliates
may be entitled to the granting of injunctive relief by a court of competent
jurisdiction against any action that constitutes any such breach of this
Article 7.

 

7.4                               Publication.  Either Party may publish or
present data and/or results generated utilizing the HAP Markers, provided, that
in the event that a Party or one of its Affiliates desire to publish or present
any Confidential Information of the other Party or its Affiliates, then the
proposed disclosure shall be subject to the prior review by the other Party
solely to determine (i) whether the proposed disclosure contains the
Confidential Information of the other Party or its Affiliates or (ii) whether
the information contained in the proposed disclosure should be the subject of a
patent application prior to such disclosure.  Each Party shall provide the other
Party with the opportunity to review any proposed abstract, manuscript or
presentation which discloses Confidential Information of the other Party or its
Affiliates by delivering a copy thereof to the other Party no less than [**]
days before its intended submission for publication or presentation.  The other
Party shall have [**] days from its receipt of any such abstract, manuscript or
presentation in which to notify the Party in writing of any specific objections
to the disclosure, based on either the need to seek patent protection or concern
regarding the specific disclosure of the Confidential Information.  In the event
a Party objects to the disclosure, the other Party agrees

 

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not to submit the publication or make the presentation containing the
objected-to information until the Party is given a reasonable additional period
of time (not to exceed an additional [**] days) to seek patent protection for
any material in the disclosure which it believes is patentable or, in the case
of Confidential Information, to allow the Party to delete any Confidential
Information of the other Party or its Affiliates from the proposed disclosure. 
Each Party agrees to delete from the proposed disclosure any Confidential
Information of the other Party or its Affiliates upon request.

 

8.                                      REPRESENTATIONS AND WARRANTIES

 

8.1                               Representations, Warranties and Covenants of
Genaissance.  Genaissance represents and warrants to and covenants with Sciona
that:

 

(a)                                  Genaissance is a corporation duly
organized, validly existing and in corporate good standing under the laws of the
State of Delaware;

 

(b)                                 Genaissance has the legal right, authority
and power to enter into this Agreement and to grant the rights and licenses
granted to Sciona in this Agreement, including the license of Genaissance Patent
Rights and Genaissance Know-How and the rights to use the HAP Markers and
DecoGen Informatics System, in each case in accordance with the terms of this
Agreement;

 

(c)                                  Genaissance has taken all necessary action
to authorize the execution, delivery and performance of this Agreement;

 

(d)                                 upon the execution and delivery of this
Agreement, this Agreement shall constitute a valid and binding obligation of
Genaissance enforceable in accordance with its terms, except as enforceability
may be limited in the future by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);

 

(e)                                  the performance of its obligations under
this Agreement will not conflict with its charter documents or result in a
breach of any agreements, contracts or other arrangements to which it is a
party;

 

(f)                                    all of its employees, officers,
consultants and advisors who are supporting the performance of its obligations
under this Agreement shall have executed or will have executed agreements or
have existing obligations under law requiring assignment to Genaissance of all
intellectual property made during the course of and as the result of their
association with Genaissance and obligating the individual to maintain as
confidential Genaissance’s Confidential Information as well as confidential
information of a Third Party that Genaissance may receive, to the extent
required to support Genaissance’s obligations hereunder;

 

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(g)                                 Except as otherwise disclosed in writing to
Sciona prior to the Effective Date, Genaissance is not engaged in, has not
received any written notice of, and is not aware of any written threat of,
litigation, arbitration or other judicial proceeding alleging that the
Genaissance Patent Rights, Genaissance Know-How and/or DecoGen Informatics
System (or any part of any of the foregoing) infringes a Third Party’s
intellectual property rights;

 

(h)                                 Genaissance is not aware of any existing,
pending or threatened infringement of the Genaissance Patent Rights, Genaissance
Know-How or DecoGen Informatics System by a Third Party;

 

(i)                                     to the best of Genaissance’s actual
knowledge, the existing rights of Genaissance in the Genaissance Patent Rights,
Genaissance Know-How and DecoGen Informatics System as licensed to Sciona, its
Affiliates and Permitted Sciona Partners pursuant to this Agreement do not
infringe any right, title or interest of any Third Party;

 

(j)                                     to the best of Genaissance’s actual
knowledge, the Genaissance Patent Rights, Genaissance Know-How and DecoGen
Informatics System are owned by Genaissance free from all encumbrances and other
Third Party interests (other than existing Third Party license agreements
entered into by Genaissance as set forth in Exhibit 1.9);

 

(k)                                  Genaissance and its Affiliates shall hold
in confidence the identity of the consumers of Consumer Products and
Dual-Purpose Products and shall comply with applicable laws, regulations and
guidelines regarding confidentiality of patient records and genetic
information.  To the extent applicable, Genaissance and its Affiliates shall
comply with all applicable requirements of the Health Insurance Portability and
Accountability Act of 1996 and its related regulations (“HIPAA”), including any
and all requirements regarding the privacy and security of health information. 
Genaissance and its Affiliates shall notify Sciona orally and in writing within
twenty-four (24) hours of its discovery of any personal data in its possession
that is improperly used, copied or removed by anyone except to an authorized
representative of Genaissance or Sciona or their respective Affiliates, as the
case may be.  Genaissance and its Affiliates shall cooperate with Sciona in
taking such steps as is deemed appropriate, to enjoin the misuse, regain
possession of the data, and otherwise protect each Parties’ rights and the
privacy of each consumer of Genetic Tests;

 

(l)                                     to the extent applicable to Genaissance
and its Affiliates, Genaissance and its Affiliates shall make commercially
reasonable efforts to identify and comply with applicable laws, regulations and
guidelines in the use and performance of the Genetic Tests hereunder, including
laws, regulations and guidelines concerning genetic testing and shipping of
biological samples; and

 

(m)                               during the Access Period, Genaissance will not
enter into any agreements, contracts or other arrangements that would be
inconsistent with its obligations under this Agreement.

 

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8.2                               Representations, Warranties and Covenants of
Sciona.  Sciona represents and warrants to and covenants with Genaissance that:

 

(a)                                  Sciona is a corporation duly organized,
validly existing and in corporate good standing under the laws of England;

 

(b)                                 Sciona has the legal right, authority and
power to enter into this Agreement, and to extend the rights and licenses
granted to Genaissance in this Agreement;

 

(c)                                  Sciona has taken all necessary action to
authorize the execution, delivery and performance of this Agreement;

 

(d)                                 upon the execution and delivery of this
Agreement, this Agreement shall constitute a valid and binding obligation of
Sciona enforceable in accordance with its terms, except as enforceability may be
limited in the future by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law);

 

(e)                                  the performance of its obligations under
this Agreement will not conflict with Sciona’s charter documents or result in a
breach of any agreements, contracts or other arrangements to which it is a
party;

 

(f)                                    all of its employees, officers,
consultants and advisors who are supporting the performance of its obligations
under this Agreement shall have executed or will have executed agreements or
have existing obligations under law requiring assignment to Sciona of all
intellectual property made during the course of and as the result of their
association with Sciona and obligating the individual to maintain as
confidential Sciona’s Confidential Information as well as confidential
information of a Third Party that Sciona may receive, to the extent required to
support Sciona’s obligations hereunder;

 

(g)                                 Sciona and its Affiliates shall hold in
confidence the identity of the consumers of Consumer Products and Dual-Purpose
Products and shall make commercially reasonable efforts to identify and comply
with (i) applicable laws, regulations and guidelines regarding confidentiality
of patient records and genetic information, and (ii) all applicable requirements
of HIPAA, including any and all requirements regarding the privacy and security
of health information.  Sciona and its Affiliates shall notify Genaissance
orally and in writing within twenty-four (24) hours of its discovery of any
personal data in its possession that is improperly used, copied or removed by
anyone except to an authorized representative of Genaissance or Sciona or their
respective Affiliates, as the case may be.  Sciona and its Affiliates shall
cooperate with Genaissance in taking such steps as is deemed appropriate, to
enjoin the misuse, regain possession of the data, and otherwise protect each
Parties’ rights and the privacy of each consumer of Genetic Tests;

 

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(h)                                 to the extent applicable to Sciona and its
Affiliates, Sciona and its Affiliates shall make commercially reasonable efforts
to identify and comply with all applicable laws, regulations and guidelines in
the manufacture, distribution, marketing, sale, use, and performance of any
Genetic Test, including laws, regulations and guidelines concerning the proper
acquisition of any diagnostic or laboratory samples, informed consent
requirements, genetic testing and shipping of biological samples; and

 

(i)                                     during the Access Period, Sciona will
not enter into any agreements, contracts or other arrangements that would be
inconsistent with its obligations under this Agreement.

 

8.3                               Limited Warranties relating to Performance of
the DecoGen Informatics System.  Genaissance warrants that the DecoGen
Informatics System delivered to Sciona represents the latest version of the
DecoGen Informatics System that is available to licensees of the HAP Database. 
Genaissance does not represent that the operations of the DecoGen Informatics
System will be trouble-free or that the DecoGen Informatics System contains no
errors.  Genaissance’s only obligation to Sciona with respect to the DecoGen
Informatics System will be to use reasonable efforts consistent with its normal
business practices to correct any errors.

 

8.4                               WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH
RESPECT TO THE HAP DATABASE, HAP MARKERS, DECOGEN INFORMATICS SYSTEM, GENETIC
TESTS, PATENT RIGHTS, GOODS, SERVICES OR OTHER SUBJECT MATTER OF THIS AGREEMENT
AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.  IN
ADDITION, SCIONA ACKNOWLEDGES THAT THE HAP DATABASE AND DECOGEN INFORMATICS
SYSTEM MAY CONTAIN INFORMATION THE ACQUISITION OR USE OF WHICH IS COVERED BY ONE
OR MORE VALID PATENTS OF THIRD PARTIES.  GENAISSANCE MAKES NO REPRESENTATION OR
WARRANTIES WITH RESPECT TO SCIONA’S USE OF THE INFORMATION TO BE PROVIDED TO IT
HEREUNDER.  GENAISSANCE MAKES NO WARRANTY THAT THE HAP DATABASE DOES NOT CONTAIN
ERRORS OR THAT THE HAP DATABASE CONTAINS ALL HAP MARKERS THAT ARE ACTUALLY
PRESENT BUT NOT DETECTED IN THE INDEX REPOSITORY.

 

8.5                               Interpretation

 

(a)                                  Awareness.  In this Section 8, the term “so
far as [a Party] is aware” or any similar or equivalent word shall be construed
to mean those matters within the actual knowledge of the senior management of
the relevant Party and those matters which would be apparent to such senior
managers upon carrying out commercially reasonable inquiries into such matters.

 

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(b)                                 Actual knowledge.  In this Section 8, the
term “actual knowledge” shall be construed to mean those matters that are within
the actual knowledge of the senior management of the relevant Party without the
performance of any inquiry.

 

9.                                      INDEMNITY

 

9.1                               Sciona Indemnity Obligations.  Sciona agrees
to defend, indemnify and hold Genaissance and its Affiliates and their
respective directors, officers, employees and agents harmless from all claims,
losses, damages, fees or expenses (including attorneys’ fees) relating to or
arising as a result of: (a) any actual or asserted violations of any applicable
law or regulation by Sciona or its Permitted Sciona Partners, including any
allegation or determination that any Genetic Tests (or any products or services
distributed in connection therewith) manufactured, marketed, distributed, sold
or performed hereunder are not in compliance with any applicable law or
regulation; (b) any unauthorized disclosure by Sciona or the Permitted Sciona
Partners of Third Party confidential information obtained by Sciona or the
Permitted Sciona Partners; (c) any claims for bodily injury, death or property
damage, or infringement of intellectual property rights attributable to the
manufacture, distribution, marketing, sale, use or performance of any Genetic
Tests (or any products or services distributed in connection therewith),
provided that indemnification for infringement of intellectual property rights
shall not include the products, materials (other than genes, polymorphisms or
other components of Genetic Tests that are specified by Sciona), tools,
methodologies and technologies (x) provided by, or (y) selected and used by,
Genaissance in performing any Collaboration Agreement or in providing services
pursuant to any agreement entered into pursuant to Sections 2.4 and 2.5; (d) any
product recall ordered by a governmental agency or required by a confirmed
failure of any product sold or performed in connection with this Agreement as
reasonably determined by the Parties hereto; (e) any claims by employees or
contractors of Sciona or its Affiliates for bodily injury, death or property
damage arising out of the performance by Sciona or its Permitted Sciona Partners
of any activities under this Agreement; (f) claims brought by Third Parties
against Genaissance and its Affiliates in respect of the negligence,
recklessness or intentional misconduct of Sciona or Permitted Sciona Partners in
connection with activities under this Agreement; or (g) a breach of any of the
representations, warranties or covenants made hereunder by Sciona.

 

9.2                               Genaissance Indemnity Obligations. Genaissance
agrees to defend, indemnify and hold Sciona and its Affiliates and their
respective directors, officers, employees and agents harmless from all claims,
losses, damages, fees or expenses (including attorneys’ fees) relating to or
arising as a result of: (a) any unauthorized disclosure by Genaissance or its
Affiliates of Third Party confidential information obtained by Genaissance or
its Affiliates; (b) any claims by employees or contractors of Genaissance or its
Affiliates for bodily injury, death or property damage arising out of the
performance by Genaissance or its Affiliates of any activities under this
Agreement; (c) claims brought by Third Parties against Sciona, its Affiliates or
Permitted Sciona Partners in respect of the negligence, recklessness or
intentional misconduct of Genaissance in connection with its activities under
this Agreement, including the performance by Genaissance or its Affiliates of
Genetic Tests pursuant to Sections 2.4 and 2.5; (d) any claims brought by Third

 

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Parties against Sciona or its Affiliates for bodily injury, death, property
damage or infringement of intellectual property rights by the products,
materials (other than genes, polymorphisms and other components of Genetic Tests
that are specified by Sciona), tools, methodologies and technologies (x)
provided by, or (y) selected and used by, Genaissance in performing any
Collaboration Agreement or in providing services pursuant to any agreement
entered into pursuant to Sections 2.4 and 2.5; or (e) a breach of any of the
representations, warranties or covenants made hereunder by Genaissance.

 

9.3                               Limitation on Indemnity Obligations.  Neither
Party nor its respective Affiliates, employees or agents shall be entitled to
the indemnities set forth in Section 9.1 or Section 9.2 where the claim, loss,
damage or expense for which indemnification is sought was caused by a grossly
negligent or intentional act or omission by the other Party, its Affiliates,
directors, officers, employees or authorized agents.

 

9.4                               Procedure.  If the Party being indemnified
hereunder or its respective employees or agents (the “Indemnitee”) intends to
claim indemnification under this Article 9, the Indemnitee shall promptly notify
the other Party (the “Indemnitor”) of any loss, claim, damage, liability or
action in respect of which the Indemnitee intends to claim such indemnification,
and the Indemnitor shall assume the defense thereof with counsel mutually
satisfactory to the Parties; provided, however, that an Indemnitee shall have
the right to retain its own counsel, with the fees and expenses to be paid by
the Indemnitor, if representation of such Indemnitee by the counsel retained by
the Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other Party represented by such
counsel in such proceedings.  The indemnity agreement in this Article 9 shall
not apply to amounts paid in settlement of any loss, claim, damage, liability or
action if such settlement is effected without the consent of the Indemnitor,
which consent shall not be withheld or delayed unreasonably.  The failure to
deliver notice to the Indemnitor within a reasonable time after the commencement
of any such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this Article 9,
but the omission so to deliver notice to the Indemnitor will not relieve it of
any liability that it may have to any Indemnitee otherwise than under this
Article 9.  The Indemnitee under this Article 9, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or liability covered by this
indemnification.  The Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys’ fees incurred by the Indemnitee in
establishing its claim for indemnity if such claim is upheld by a court of
competent jurisdiction as successful or if such claim is settled or as otherwise
agreed by the Parties.

 

9.5                               Insurance.  Each Party shall maintain
insurance, including product liability insurance, with respect to its activities
under this Agreement.  Such insurance shall be in such amounts and subject to
such deductibles as the Parties may agree based upon standards prevailing in the
industry at the time; provided, that, as of the First Commercial Sale of a
Genetic Test, Sciona shall maintain a minimum of One Million Dollars
($1,000,000) in product liability insurance until the earlier of (a) closing of
the first financing round of Sciona after the Effective

 

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Date or (b) June 30, 2004, by which date Sciona shall have obtained and shall
thereafter maintain an amount of product liability insurance that is equal to
Sciona’s projected Net Sales for each twelve (12) month period covered by the
insurance policy, provided that Sciona shall not be required to maintain more
than Ten Million Dollars ($10,000,000) in product liability insurance.

 

10.                               TERM AND TERMINATION

 

10.1                        Access Period.

 

(a)                                  Unless this Agreement is sooner terminated
in accordance with the provisions of this Article 10, the “Access Period” shall
mean the period that commences on the Effective Date and expires five (5) years
from the Effective Date, subject to one (1) [**] extension on terms mutually
agreeable to Sciona and Genaissance, including [**], which [**] shall be [**]. 
The Parties shall use reasonable endeavors to agree on the full and final terms
of such extension.

 

(b)                                 Upon the expiration of the Access Period (or
if earlier, termination of this Agreement), Sciona shall return to Genaissance
or destroy all copies (including electronic copies) of the HAP Database and
DecoGen Informatics System, including the deletion of all such copies from all
computers on which such database or software has been installed or transmitted. 
Notwithstanding termination or expiration of the Access Period, any license
granted to Sciona pursuant to Section 2.1(b) shall survive the termination or
expiration of the Access Period.

 

10.2                        Term of Agreement.  This Agreement shall become
effective as of the Effective Date and except as otherwise provided in Sections
10.2 or 10.4, shall remain in effect until the later of:  (i) the expiration of
all obligations to make payments set forth in Articles 4 and 5, and (ii) the
expiration of all licenses and other rights granted in Article 2.

 

10.3                        Termination by Either Party.  This Agreement may be
terminated immediately upon written notice to the other Party upon the
occurrence of any of the following events:

 

(a)                                  the other Party commits a material breach
of this Agreement (other than: (i) in respect of a failure by Sciona to make a
payment pursuant to Section 5.2 or Section 5.3, in which event the right of
Genaissance to terminate this Agreement is as set forth in Section 10.4(a); and
(ii) in respect of a failure by Sciona to make any Minimum Annual Payment, in
which event the right of Genaissance to terminate this Agreement is as set forth
in Section 10.4(b)); and the breaching Party fails to remedy such breach within
[**] days after written notice thereof by the non-breaching Party; or

 

(b)                                 the other Party ceases to do business, or
otherwise terminates its business operations; or

 

(c)                                  the other Party enters into and/or itself
applies for, and/or calls meetings of members and/or creditors with a view to,
one or more of a moratorium, administration, liquidation (of any kind, including
provisional), or composition and/or arrangement (whether

 

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under deed or otherwise) with creditors, and/or have any of its property
subjected to one or more of appointment of a receiver (of any kind), enforcement
of security, distress, or execution of a judgment (in each case to include
similar events under the laws of the applicable country); or

 

(d)                                 the other Party commits fraud or any
unlawful act in connection with or affecting this Agreement.

 

10.4                        Termination by Genaissance.  In addition to
Genaissance’s rights under Section 10.2, Genaissance may terminate this
Agreement immediately upon written notice to Sciona upon the occurrence of any
of the following events:

 

(a)                                  after [**] days’ written notice from
Genaissance of termination pursuant to this section 10.4(a), Sciona fails to
make any undisputed payment due or owing pursuant to Section 5.2 or Section 5.3;
or

 

(b)                                 Sciona fails to pay Genaissance at least
[**] percent ([**]%) of the Minimum Annual Payments in each of [**] years and
Genaissance is in compliance, in all material respects, with the terms and
conditions of Section 2.1(a), provided, that if Genaissance exercises its rights
to terminate pursuant to this clause 10.4(b), Genaissance shall offer to sell
its Shares to the other shareholders of Sciona for £[**] in aggregate for all
such Shares pursuant to the terms of the articles of association of Sciona; or

 

(c)                                  after [**] days’ written notice from
Genaissance, Sciona fails to remedy any material breach of the Investment
Agreement (save where the breach concerned is a breach of the warranty
provisions set out in clause 7 and/or schedule 1, of the Investment Agreement,
in which event Genaissance shall have no right to terminate this Agreement); or

 

(d)                                 Sciona and its Affiliates fail to obtain or
achieve cumulative combined sales revenues and Third Party financing (equity or
debt) of at least [**] U.S. dollars ($[**]) within [**] months of the Effective
Date; provided, that if Genaissance exercises its rights to terminate pursuant
to this clause 10.4(d), Genaissance shall offer to sell its Shares to the other
shareholders of Sciona for £[**] in aggregate for all such Shares pursuant to
the terms of the articles of association of Sciona.  For the avoidance of doubt,
the amount of financing or sales revenues obtained by Sciona before the
Effective Date shall not be applicable to this Section 10.4(d).

 

10.5                        Effect of Termination; Survival.

 

(a)                                  Termination of this Agreement for any
reason or expiration of this Agreement shall be without prejudice to any rights
or obligations that shall have accrued to the benefit of either Party prior to
such termination or expiration, including Sciona’s obligation to pay Royalties,
Service Fees and Minimum Annual Payments.  Such termination or expiration shall
not relieve either Party from obligations which are expressly indicated to
survive termination or expiration of this Agreement.  The remedies set forth in
this Article 10 are not exclusive and are

 

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without prejudice to any other rights conferred on the non-breaching Party by
this Agreement and any other remedies available to it by law or in equity.

 

(b)                                 The following sections of this Agreement
shall survive any termination or expiration of this Agreement: Section 3.3, 5.5
(in respect of matters, facts and circumstances arising only during the term of
this Agreement), 5.7, 5.8, 6.1 and 10.5 and Articles 7, 9 (in respect of
matters, facts and circumstances arising only during the term of this Agreement)
and 11.

 

11.                               MISCELLANEOUS

 

11.1                        Force Majeure.  Neither Party shall be held liable
or responsible to the other Party nor be deemed to have defaulted under or
breached this Agreement for failure or delay in fulfilling or performing any
term of this Agreement when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected Party, including fire,
floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other Party; provided, however, that the Party so
affected shall use reasonable commercial efforts to avoid or remove such causes
of nonperformance, and shall continue performance hereunder with reasonable
dispatch whenever such causes are removed.  Either Party shall provide the other
Party with prompt written notice of any delay or failure to perform that occurs
by reason of force majeure.  The Parties shall mutually seek a resolution of the
delay or the failure to perform as noted above.

 

11.2                        Consequential Damages.  Neither Party shall be
liable under this Agreement for special, incidental or consequential damages or
for loss of profit or lost revenue, even if advised of the possibility of such
damages.  NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE
OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY
BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES, EXCEPT AS A
RESULT OF A MATERIAL BREACH OF THE CONFIDENTIALITY AND USE OBLIGATIONS IN
ARTICLE 7.  NOTHING IN THIS SECTION 11.2 IS INTENDED TO LIMIT OR RESTRICT THE
INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY.

 

11.3                        Assignment.  Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by either Party without the
prior written consent of the other Party, such consent not to be unreasonably
withheld.  Any purported assignment or transfer in violation of the preceding
sentence shall be void.  Any permitted assignee or transferee shall assume all
obligations of its assignor under this Agreement.  No assignment or transfer
shall relieve either Party of responsibility for the performance of any accrued
obligation that such Party then has hereunder.

 

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11.4                        Severability.  In the event that any provision of
this Agreement is held by a court of competent jurisdiction to be unenforceable
because it is invalid or in conflict with any law of the relevant jurisdiction,
the validity of the remaining provisions shall not be affected and the rights
and obligations of the Parties shall be construed and enforced as if the
Agreement did not contain the particular provisions held to be unenforceable,
provided that the Parties shall negotiate in good faith a modification of this
Agreement with a view to revising this Agreement in a manner which reflects, as
closely as is reasonably practicable, the commercial terms of this Agreement as
originally signed.

 

11.5                        Notices.  Any consent, notice or report required or
permitted to be given or made under this Agreement by one of the Parties hereto
to the other shall be in writing, delivered personally or by facsimile (and
promptly confirmed by telephone, personal delivery or courier) or courier,
postage prepaid (where applicable), addressed to such other Party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.

 

If to Genaissance:

 

Genaissance Pharmaceuticals, Inc.

 

 

Five Science Park

 

 

New Haven, Connecticut  06511

 

 

Attention: Chief Executive Officer

 

 

Telephone: (203) 773-1450

 

 

Facsimile: (203) 562-9377

 

 

 

If to Sciona:

 

Sciona Limited

 

 

25 Broadmarsh Business and Innovation Centre

 

 

Harts Farm Way

 

 

Havant Hampshire

 

 

P09 HIS

 

 

United Kingdom

 

 

Attention:

 

 

Telephone:

 

 

Facsimile:

 

11.6                        Applicable Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Connecticut, without
giving effect to the choice of laws provisions thereof.

 

11.7                        Dispute Resolution.

 

(a)                                  The Parties hereby agree that they will
attempt in good faith to resolve any controversy or claim arising out of or
relating to this Agreement promptly by negotiations.  If a controversy or claim
should arise hereunder, the matter shall be referred to an individual

 

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designated by the Chief Executive Officer (or the equivalent position) of
Genaissance and an individual designated by the Chief Executive Officer (or the
equivalent position) of Sciona (the “Representatives”).  If the matter has not
been resolved within [**] days of the first meeting of the Representatives of
the Parties (which period may be extended by mutual agreement) concerning such
matter, subject to rights to injunctive relief and specific performance, and
unless otherwise specifically provided for herein, any controversy or claim
arising out of or relating to this Agreement, or the breach thereof, will be
settled as set forth in Section 11.7(b).

 

(b)                                 All disputes arising in connection with this
Agreement shall be finally settled by binding arbitration conducted in New York,
New York under the Commercial Arbitration Rules of the American Arbitration
Association by a single arbitrator appointed in accordance with said Rules. 
Notwithstanding the above, either Party has the right to bring suit in a court
of competent jurisdiction against the other Party for (i) any breach of such
other Party’s duties of confidentiality pursuant to Article 7 of this Agreement
and (ii) any infringement of its own proprietary rights by the other Party. 
Judgment upon the arbitrator’s award may be entered in any court of competent
jurisdiction.  The award of the arbitrator may include compensatory damages
against either Party, but under no circumstances will the arbitrator be
authorized to, nor shall he, award punitive damages or multiple damages against
either Party.  The Parties agree not to institute any litigation or proceedings
against each other in connection with this Agreement except as provided in this
Section 11.7.

 

11.8                        Publicity.  Except as required by law, Genaissance
and Sciona each agree not to disclose the existence or any terms or conditions
of this Agreement to any Third Party without consulting the other Party prior to
such disclosure.  Notwithstanding the foregoing, Genaissance and Sciona agree
that a press release will be issued promptly after execution of this Agreement
in the form to be attached as Exhibit 11.8 and information contained in such
press release can be used as a routine reference in the usual course of business
to describe the terms of this transaction, and Genaissance and Sciona may
disclose such information without consulting the other Party.  The Parties may
thereafter from time to time mutually agree on revisions to material to be used
as a routine reference, which revisions shall be submitted by one Party for the
review and approval of the other Party at least [**] days prior to the
anticipated use or disclosure of the revised material, such approval not to be
unreasonably withheld.

 

11.9                        Headings.  The captions to the several Articles and
Sections hereof are not a part of this Agreement, but are merely guides or
labels to assist in locating and reading the several Articles and Sections
hereof.

 

11.10                 No Partnership.  It is expressly agreed that the
relationship between Genaissance and Sciona shall not constitute a partnership,
joint venture or agency.  Neither Genaissance nor Sciona nor their Affiliates
shall have the authority to make any statements, representations or commitments
of any kind, or to take any action, which shall be binding on the other, without
the prior consent of the other Party to do so.

 

32

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11.11                 Exports.  The Parties acknowledge that the export of
technical data, materials or products is subject to the exporting Party
receiving any necessary export licenses and that the Parties cannot be
responsible for any delays attributable to export controls which are beyond the
reasonable control of either Party.  Genaissance and Sciona agree not to export
or re-export, directly or indirectly, any information, technical data, the
direct product of such data, samples or equipment received or generated under
this Agreement in violation of any applicable export control laws or
governmental regulations.  Genaissance and Sciona agree to obtain similar
covenants from their Affiliates, licensees, sublicensees and contractors with
respect to the subject matter of this Section.

 

11.12                 Waiver.  The waiver by either Party of a breach or default
of any provision of this Agreement by the other Party shall not be construed as
a waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either Party to exercise or avail itself of
any right, power or privilege that it has or may have hereunder operate as a
waiver of any right, power or privilege by such Party.

 

11.13                 Entire Agreement.  This Agreement and the Investment
Agreement constitute the entire agreement between the Parties with respect to
its subject matter and supersedes all previous written or oral representations,
agreements and understandings between the Parties, including the confidentiality
agreement between the Parties dated February 1, 2002.  This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by both Parties hereto.

 

11.14                 Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

 [THE NEXT PAGE IS THE SIGNATURE PAGE]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date of
this Agreement.

 

 

GENAISSANCE PHARMACEUTICALS, INC.

SCIONA LIMITED

 

 

 

 

By

 /s/ Kevin Rakin

 

By

 /s/ Christopher J. Martin

 

 

 

 

 

 

 

Title

President & Chief Executive Officer

 

Title

Chief Executive Officer

 

 

34

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Exhibit 1.7

 

1.                                       Description of the DecoGen® Informatics
System

 

DECOGEN® BROWSER SOFTWARE

 

•                       Description:  The DecoGen Browser software allows a user
to browse genes, polymorphism data and clinical data; perform association
analysis; calculate linkage disequilibrium; view Haplotype phylogenies; create
and save projects based on clinical cohorts.  The browser only operates on genes
for which haplotypes have been built.  Statistical analyses are run using SAS. 
The gene structure, polymorphisms and haplotypes must be in the HAP Database for
each gene to be viewed.  DecoGen® DataManager software and gene structures are
required to load customer-created polymorphisms or haplotypes.  Additional gene
structures may be added to the HAP Database via purchase of additional software
or custom services from Genaissance.

 

•                       Sciona provides:  Hardware for database server, file
server and desktop clients; appropriate Oracle license, database administrator
support for (DBA) for installation and data updates; a server and license for
SAS.

 

DECOGEN® DATAMANAGER SOFTWARE

 

•                       Description:  The DecoGen DataManager software allows a
user to browse genes and polymorphism data, in more detail than provided by the
DecoGen Browser software, but does not include any clinical analysis tools. 
DecoGen DataManager software requires that the gene structure, polymorphisms and
genotypes be in the HAP Database for information on each gene to be viewed, but
does not require the presence of haplotypes.  DecoGen DataManager software
provides full access to the HAP Database Schema and has tools for importing a
variety of data including polymorphisms, genotypes and haplotypes for any gene
whose structure is in the HAP Database.  Polymorphism and other types of data in
the HAP Database may also be exported using DecoGen DataManager.  This software
does not include any clinical analysis tools.  Additional gene structures may be
added to the HAP Database via purchase of additional software or custom services
from Genaissance.

 

•                       Sciona provides: Hardware for database server, file
server and desktop clients; appropriate Oracle license, database administrator
support for (DBA) for installation and data updates.

 

2.               TECHNICAL SPECIFICATIONS FOR THE HAP DATABASE AND DECOGEN
INFORMATICS SYSTEM

 

2.1                               HAP DATABASE

 

Installation and Operating Requirements

 

The HAP™ Database is an Oracle database which requires the following minimum
configuration:

 

--------------------------------------------------------------------------------

 

2.1.1

 

Database Configuration

 

 

Software:

Oracle [**] Edition.

 

 

 

2.1.2

 

Hardware Requirements

 

 

Server:

[**]

 

 

Memory:

[**] GB, depending on number of users.

 

 

SWAP Space:

[**].

 

 

CD_ROM Device:

[**]

 

 

CPU:

[**]

 

 

Tape device:

[**]

 

 

 

2.1.3

 

Disk Space Requirements:

 

 

Oracle Software:

~ [**] GB ([**] Edition)

 

 

Database:

[**].

 

 

 

[**]

 

 

 

2.1.4

 

Operating System Software Requirements

 

 

Operating System:

[**].

 

 

 

[**].

 

 

 

[**].

 

2.2                               THE DECOGEN INFORMATICS SYSTEM

 

Cross-platform application, built on top of the HAP Database.  The client
application resides on a shared drive and is invoked by running a batch
initialization file from the client machine.

 

Installation and Operating Requirements

 

2.2.1                        DecoGen® Client

 

Minimum recommended client configuration:

 

•                                          CPU: [**];

•                                          Memory: [**];

•                                          Hard disk: [**];

•                                          Operating System: Window [**].

•                                          Java Runtime version: [**]

 

2.2.2                        SAS Server

 

•                  SAS Software 8.2 release on NT or Windows 2000 server
(Service Pack 2)

•                  [**] memory

•                  [**] Drives for OS and Data

 

2

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•                  [**]

•                  CD-Rom

•                  SAS Software 8.2 required components must include SAS/BASE,
SAS/STAT, SAS/CONNECT, SAS/IntrNet, and SAS/Graph.

 

3

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Exhibit 1.9

 

Third Party Licenses to HAP Technology

 

Strength License Agreement with AstraZeneca UK Limited, dated September 5, 2003

 

Technology and Database License Agreement with Millennium Pharmaceuticals, Inc.,
dated January 7, 2003

 

Research Collaboration and License Agreement with Bayer AG and Bayer Healthcare
LLC, dated January 15, 2003

 

License Agreement with Wayne State University, dated March 11, 2003

 

Agreement with Pharmacia & Upjohn Company, dated December 13, 2002

 

Mednostics™ Collaboration and License Agreement with Biogen, Inc., dated
January 31, 2002

 

HAP Focus Trial License Agreement with Biogen, Inc., dated December 21, 2001

 

HAP Focus Trial License Agreement with AstraZeneca, dated November 29, 2001

 

Agreement with Pfizer Inc., dated August 31, 2001, as amended May 16, 2002 and
February 6, 2003

 

HAP2000 Agreement with Janssen Research Foundation, dated November 22, 2000, as
amended November 22, 2002

 

Collaboration Agreement with Gene Logic, Inc., dated June 28, 2000

 

--------------------------------------------------------------------------------

 

Exhibit 1.17

 

[**]

 

--------------------------------------------------------------------------------

 

Schedule 2.4

 

Third Party Arrangements for Genetic Tests

 

 

[**]

 

2

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