EXHIBIT 10.28
MPSS TECHNOLOGY SERVICES AGREEMENT
THIS MPSS TECHNOLOGY SERVICES AGREEMENT (the "Agreement") is made and
entered into as of October 23, 1996 (the "Effective Date") by LYNX THERAPEUTICS,
INC., a Delaware corporation ("Lynx"), and BASF AKTIENGESELLSCHAFT, a
corporation organized under the laws of Germany ("BASF").
RECITALS
WHEREAS, Lynx owns certain inventions, methods and intellectual
property relating to a novel technique for determining cDNA sequence information
from a sample; and
WHEREAS, Lynx is commercializing such techniques for use in the
analysis of cDNA libraries for research and commercial purposes; and
WHEREAS, BASF desires to secure access to Lynx's library analysis
capabilities and services on the terms set forth herein and is willing to
provide financial support for Lynx's development work;
NOW THEREFORE, in consideration of the foregoing premises and the
covenants and promises contained in this Agreement, the parties hereto agree as
follows:
1. DEFINITIONS
Capitalized terms use in this Agreement shall have the meanings
ascribed to them in the following sections of this Article 1, unless otherwise
defined in this Agreement.
1.1 "Affiliate" means a corporation, partnership, entity, person, firm,
company, or joint venture that controls, is controlled by or is under the common
control with the referenced Party. For the purposes of this definition the word
"control" (including, with correlative meaning, the terms "controlled by" or "is
under the common control with") means the power to direct or cause the direction
of the management and policies of such entity, or the ownership of a least fifty
percent (50%) of the voting stock of such entity; provided, however, that, if
the applicable law of the jurisdiction of organization of such entity prohibits
ownership by a Party of fifty percent (50%) or more, then "control" shall mean
the ownership of the maximum percentage of the voting stock of such entity
allowed by such applicable law.
1.2 "Massively Parallel Signature Sequencing" or "MPSS" means the
parallel acquisition of at least [REDACT] contiguous bases (a "Signature
Sequence") from each of at least [REDACT] templates sampled from a given cell
culture or tissue cDNA library.
CONFIDENTIAL TREATMENT REQUESTED
1.3 "Milestone" means the achievement by Lynx of the technical
parameters with respect to MPSS performance that are set forth in Exhibit A
hereto.
1.4 "MPSS Library Analysis" means a report containing each [REDACT]
base sequence and its abundance within the [REDACT] or more cDNA templates
extracted from a given sample.
2. LYNX MPSS SERVICES
2.1 Access Fee. In consideration of Lynx's commitment to provide BASF
with the services hereinafter described, BASF agrees to pay to Lynx five and
one-half million U.S. dollars ($5,500,000) within thirty (30) days of the
Effective Date (the "Initial Payment"). BASF shall pay Lynx an additional five
and one-half million U.S. dollars ($5,500,000) within thirty (30) days after
Lynx notifies BASF that the Milestone has been achieved and provides BASF with
the data demonstrating achievement of such milestone (the "Milestone Payment").
The obligations of BASF to make such additional payment and any subsequent
payments under this Agreement shall only come into effect if the patent due
diligence of BASF does not reveal by January 15, 1997 that Lynx could be blocked
from performing MPSS Library Analyses in the United States. If such payment
obligations do not come into effect due to the foregoing, then this Agreement
shall terminate on January 15, 1997.
2.2 Initial Subscription Period. Within thirty (30) days after BASF
delivers to Lynx the Milestone Payment required under Section 2.1, BASF shall
make a payment to Lynx of four million U.S. dollars ($4,000,000) in respect of
MPSS analysis services to be provided during the first half of an initial
subscription period (the "First Subscription Payment"). On the first anniversary
of the commencement of the initial subscription period, BASF shall make an
additional payment to Lynx of four million U.S. dollars ($4,000,000) in respect
of the MPSS analysis services to be performed hereunder. The initial
subscription period shall commence on the date the First Subscription Payment is
due, and shall terminate on the date that is twenty-four (24) months after such
date. During such initial subscription period, BASF shall be entitled to receive
from Lynx, without further charge, MPSS Library Analyses for up to [REDACT]
separate cDNA library samples delivered to Lynx by BASF during such period. In
addition, during the same period, BASF shall be entitled to order from Lynx up
to [REDACT] additional MPSS Library Analyses, for which BASF shall pay Lynx
[REDACT] per additional MPSS Library Analysis. If at the end of the initial
subscription period, BASF submits for MPSS analysis less than [REDACT] cDNA
library samples, BASF may submit the balance, but in any case not more than
[REDACT], for analysis during the following 24 months [REDACT] (the "Carry Over
Period").
2.3 Renewal of Subscription. BASF may, at its option and upon 30 days
prior written notice, elect to extend its subscription on the terms set forth in
Section 2.2 above for additional subsequent one year periods, by making in
respect of each renewal period a payment to Lynx of [REDACT] prior to expiration
of the then current subscription period.
CONFIDENTIAL TREATMENT REQUESTED
2.
Each renewal shall be subject to increases annually to reflect increases in the
U.S. Producer Price Index--All Urban Producers during the prior subscription
period. This Agreement shall expire at the end of the last subscription period
paid for by BASF as provided for in Sections 2.2 and 2.3, if BASF fails to so
renew its subscription for MPSS services for the subsequent period as provided
in this Section 2.3.
2.4 Informatics. The parties acknowledge that Lynx intends to develop
software to facilitate the analysis of data secured from MPSS Library Analyses.
Lynx agrees that BASF may at its election obtain for its own use during the term
of this Agreement object copies of such software [REDACT].
2.5 Ownership of Technology. Subject to 2.7 below, BASF acknowledges
and agrees that any and all inventions (patentable or unpatentable),
information, know-how, techniques, methods, materials or other technology
developed, discovered or made by Lynx during the development work shall be owned
entirely by Lynx and shall be disclosed to BASF only to the extent Lynx elects
to do so. Lynx shall own and have the sole and exclusive right to prosecute and
maintain all patents and patent applications covering any such technology.
2.6 Access to Lynx Reference Data Base. Lynx will build and maintain a
reference data base containing MPSS information and data derived from MPSS
analyses of a variety of reference tissue and cell types. Lynx agrees that BASF
shall have access to this reference data base in order to enable BASF, by
comparing the results of MPSS Library Analyses with data generated from MPSS
Library Analyses of pertinent reference samples, to minimize the work that BASF
may need to do to validate data obtained from its samples. Lynx agrees to make
this reference data base available to BASF as it is built during the term of
this Agreement [REDACT] to BASF.
2.7 BASF Intellectual Property. BASF shall own the entire right, title
and interest in and to the cDNA libraries that it sends to Lynx for analysis and
the results of the MPSS Library Analyses of such libraries prepared for BASF
pursuant to this Agreement. Lynx agrees that it shall treat the identity and
nature of such cDNA libraries delivered to Lynx by BASF hereunder and the
results of the related MPSS Library Analyses as the "Confidential Information"
of BASF pursuant to Article 3 hereof. Nevertheless, BASF agrees to give
appropriate credit to Lynx in any scientific publication of its research that
relies on such results.
3. CONFIDENTIALITY
3.1 Confidentiality. All knowledge, know-how, practices, processes or
other information (hereinafter referred to as "Confidential Information")
disclosed by one party to the other (the "Receiving Party") and which is
designated in writing as Confidential Information or, if disclosed orally, is
reduced to writing within thirty (30) days of disclosure
CONFIDENTIAL TREATMENT REQUESTED
3.
and designated as Confidential Information, shall be received and maintained by
such party in strict confidence and shall not be disclosed to any third party.
The Receiving Party shall not use said Confidential Information for any purpose
other than those purposes specified in this Agreement. The Receiving Party may
disclose Confidential Information for the purposes of this Agreement to
Affiliates, employees or consultants who are obliged to comply with this
confidentiality provision. This Section 3.1 shall survive for a period of five
(5) years from expiration or termination of this Agreement. The nondisclosure
obligations of this Section 3.1 shall not apply to Confidential Information
which the Receiving Party can establish by competent evidence (i) is in the
public domain prior or subsequent to disclosure without breach by the Receiving
Party, (ii) was in the Receiving Party's possession at the time of disclosure,
(iii) is received by Receiving Party from a third party who has the lawful right
to disclose it or (iv) is disclosed as required by law or regulation or with the
written consent of the other party.
4. TERM AND TERMINATION
4.1 Term. This Agreement shall expire two years from the Effective Date
if the Milestone has not been achieved as of such date. If such milestone is
achieved before such date, this Agreement shall expire at the end of the initial
subscription period or the Carry Over Period both as provided for in Section 2.2
or, if the subscription period is renewed under Section 2.3, at the end of the
last subscription period to be paid for by BASF under Section 2.3.
4.2 Termination for Material Breach. Each party shall have the right to
terminate this Agreement, in addition to pursuing any remedies available under
law or in equity, upon sixty (60) days written notice to the other party if the
other party is in material breach of this Agreement. Such termination shall not
be effective if the other party cures such breach within sixty (60) days of
receiving written notice of breach; thirty (30) days where the alleged breach is
failure to pay money when due.
4.3 Effect of Termination; Survival. Upon any expiration or termination
of this Agreement, BASF will pay to Lynx all amounts that have been earned by
Lynx through the expiration or termination date. Lynx will return any remaining
samples provided by BASF, supply BASF with any MPSS Library Analyses of BASF
samples generated prior to the expiration or termination date, and, in the case
of termination, shall return to BASF any advance payment to the extent such
advance payment was intended to serve as payment for services subsequent to the
termination date. Section 3.1 shall survive for five (5) years following
expiration or termination with respect to Confidential Information disclosed
prior to expiration or termination.
4.
5. REPRESENTATIONS AND WARRANTIES
5.1 Lynx. Lynx hereby represents and warrants that it has full
corporate power and authority to enter into this Agreement, that this Agreement
has been duly and validly executed and delivered by it and constitutes a legal,
valid and binding obligation of Lynx, enforceable in accordance with its terms.
Lynx represents and warrants that the "Initial Payment" made to Lynx under
Section 2.1 above shall be used to further develop, refine, and improve the MPSS
and related technologies, capabilities, and methods.
5.2 BASF. BASF hereby represents and warrants that it has full
corporate power and authority to enter into this Agreement, that this Agreement
has been duly and validly executed and delivered by it and constitutes a legal,
valid and binding obligation of BASF, enforceable in accordance with its terms.
5.3 Disclaimer. All materials, technology and information exchanged
between the parties or used in performing this Agreement is provided "as is" and
the party providing or using such technology expressly disclaims any and all
warranties of any kind, express or implied, including without limitation the
WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
noninfringement of the intellectual property rights of third parties or arising
from a course of dealing, usage or trade practices, in all cases with respect
thereto.
6. MISCELLANEOUS
6.1 Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, which consent shall not be
unreasonably withheld, provided, however, that either party may assign this
Agreement without such consent to any Affiliate or to any successor by way of
merger, acquisition or sale or transfer of substantially all of its business
assets to which this Agreement relates, in a manner such that the assignee shall
assume and be responsible for the performance and observance of all of such
party's duties and obligations hereunder. This Agreement will be binding upon
and inure to the benefit of all permitted successors and assigns of the parties
hereunder, and the heirs and personal representatives of the individual parties
hereunder. The name of each party appearing herein will be deemed to include the
names of such party's successors and assigns to the extent necessary to carry
out the intent of this Agreement.
6.2 Amendment. No amendment, modification or supplement of any
provision of the Agreement will be valid or effective unless made in writing and
signed by a duly authorized representative of each party.
6.3 Waiver. No provision of the Agreement (unless such provision
otherwise provides) will be waived by any act, omission or knowledge of a party
or its agents or
5.
employees except by an instrument in writing expressly waiving such provision
and signed by a duly authorized representative or representatives of the waiving
party.
6.4 Headings. The headings for each article and section in this
Agreement have been inserted for the convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.
6.5 Force Majeure. Any delays in performance by any party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to acts of God, embargoes, governmental
restrictions, strikes or other concerted acts of workers, failure of suppliers,
fire, flood, explosion, earthquake, riots, wars, civil disorder, rebellion or
sabotage. The party suffering such occurrence shall immediately notify the other
party and any time for performance hereunder shall be extended by the actual
time of delay caused by the occurrence.
6.6 Notices. Any notices given pursuant to this Agreement shall be in
writing and sent to the address below by one day delivery service or by express
mail or facsimile (receipt confirmed) and shall be deemed to have been properly
served to the addressee only upon receipt of such written communication. Notices
shall be delivered to the respective parties as indicated below, or at such
other locations as such parties specify by like notice:
If to Lynx:
Lynx Therapeutics, Inc.
0000 Xxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
If to BASF:
BASF Aktiengesellschaft
Central Xxxxxx Xxxxxxxxxx, Xxxxxxxx X0
00000 Xxxxxxxxxxxx, Xxxxxxx
Attn: Xx. Xxxxxxx Xxxxxxxxxx
6.7 Severability. Whenever possible, each provision of the Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
6.
6.8 Entire Agreement of the Parties. This Agreement constitutes and
contains the complete, final and exclusive understanding and agreement of the
parties with respect to the subject matter hereof and cancels and supersedes any
and all prior negotiations, correspondence, understandings and agreements,
whether oral or written, between the parties respecting the subject matter
hereof.
6.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and to be performed in California, without reference to conflicts
of laws. Each party hereby consents to the jurisdiction of the courts of the
State of California and the Federal District Court for the Northern District of
California for resolution of any disputes that arise hereunder.
6.10 Withholding. If required to do so by applicable law, BASF may
withhold and pay over to the relevant tax authority any withholding tax due in
respect of payments to Lynx hereunder. In the event any such withholding is
required, the parties will cooperate in preparing and delivering to such tax
authority any documentation that may be reasonably necessary to secure the
release of such withheld monies to Lynx or to enable Lynx to obtain the
appropriate refund or credit in respect thereof.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
LYNX THERAPEUTICS, INC. BASF AKTIENGESELLSCHAFT
By: /s/ Xxx Xxxxx By: /s/ X.X Xxxxxxxx-Xxxxxx
-------------------------------- -----------------------------
XXX XXXXX, PH.D.
Title: Title:
------------------------------ ------------------------------
CHAIRMAN OF THE BOARD
7.
EXHIBIT A
MILESTONE
The achievement of the Milestone will be demonstrated as follows:
1. The parties will jointly select a cell system or cell culture
suitable for this demonstration experiment.
2. One portion of the cell culture will be "induced" using an agreed
upon inducer, such as a [REDACT], for a specified period, such as [REDACT].
3. Lynx will take [REDACT] samples from the "uninduced" and [REDACT]
from the "induced" system or culture, following its internal protocols for
sampling.
4. Lynx will extract the cDNA contained in each of the [REDACT] such
samples, using its internal protocols for cDNA extraction.
5. The cDNA extracted from each of the [REDACT] samples will be divided
into [REDACT] parts, and a separate MPSS Library Analysis will be conducted on
all of the resulting cDNA samples.
6. If the data generated from all [REDACT] analyses of each of the
[REDACT] cultures are within the set (induced or uninduced) substantially
identical, but yet between the sets substantially different, then the Milestone
has been achieved.
CONFIDENTIAL TREATMENT REQUESTED
8.
