Exhibit 10.64.3
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
DELTABASE(TM) COLLABORATION AGREEMENT
THIS DELTABASE(TM) COLLABORATION AGREEMENT (this "Agreement") is
entered into as of September 19, 2001 (the "Effective Date"), by and between
DELTAGEN, INC. ("Deltagen"), a Delaware corporation with a place of business at
000 Xxx Xxxx, Xxxxxxx Xxxx, XX 00000-0000, U.S.A., and LEXICON GENETICS
INCORPORATED (together with its Affiliates, "Lexicon"), a Delaware corporation
with a place of business at 4000 Research Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx
00000, X.X.X.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and conditions set forth in this Agreement, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by or is under common
control with such Person, where "control" is defined as the ownership of [*]
([*]%) of the equity or beneficial ownership interests of such Person; provided,
however, that where local laws require a minimum percentage of local ownership,
the ownership of the maximum percentage of the equity or beneficial ownership
interests of a Person that may, under such local laws, be owned or controlled by
foreign interests shall be deemed to constitute "control" of such Person.
1.2 "Confidential Information" shall mean, the content of this
Agreement, and with respect to a party, all data and/or information of any kind
whatsoever (including without limitation, data, databases, compilations,
formulae, schemata, models, patent disclosures, procedures, processes,
projections, protocols, results of experimentation and testing, specifications,
strategies and techniques), and all tangible and intangible embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records, laboratory and
research notebooks, memoranda and reports), which are disclosed by such party to
the other party and are marked or identified as confidential at the time of
disclosure to the other party. Notwithstanding the foregoing, the obligations of
the parties with respect to Confidential Information set forth in Article 6
below shall not apply to data and/or information which the other party can
establish by written documentation (a) to have been publicly known prior to
disclosure of such data and/or information by the disclosing party to the other
party, (b) to have become publicly known, without fault on the part of the other
party, subsequent to disclosure of such data and/or information by the
disclosing party to the other party, (c) to have been received by the other
party at any time from a source, other than the disclosing party, rightfully
having possession of and a right to disclose such data and/or information and
without obligations of confidentiality or other restrictions as to use, (d) to
have been otherwise known by the other party prior to disclosure of such data
and/or information by the disclosing party to the other party, or (e) to have
been independently developed by the employees or agents of the other party
without access
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
to or the use of any data, information and/or materials disclosed by the
disclosing party to the other party.
1.3 "Contract Party" shall mean a Third Party with whom Lexicon
enters into a written agreement to perform work or services under Lexicon's
rights or licenses under this Agreement, where (a) such work or services are
solely for Lexicon's benefit; and (b) all right, title and interest to any
intellectual property, materials, information or other work or service product
resulting from such agreement is solely owned, as between Lexicon and such Third
Party, by Lexicon.
1.4 "Corporate Partner" shall mean any Third Party that enters into
an agreement with Lexicon or its Affiliates involving the grant to such Third
Party of rights for the research, development or commercialization of a Product;
provided that a Third Party may be a Corporate Partner only if, under the terms
of such grant of rights, both Lexicon and such Third Party hold a significant
financial interest (e.g., in the form of rights to royalties on Product sales,
co-promotion, co-marketing or profit-sharing rights, or other arrangements of a
similar nature) in the benefits of commercialization of any such Product.
1.5 "Data Set" shall mean the collective group of Phenotype Sets
designated by Deltagen for inclusion in DeltaBase and delivered to Lexicon
hereunder in a given quarterly delivery of DeltaBase Information under Section
3.2.1 below.
1.6 "DeltaBase" shall mean Deltagen's functional genomics database
and software consisting of the DeltaBase Information and DeltaBase
Functionality.
1.7 "DeltaBase Access Plan" shall mean the plan mutually agreed to
by the parties hereto, substantially in the form of Exhibit A, which establishes
mechanisms for Lexicon to document access to the DeltaBase and ensure compliance
with the requirements of this Agreement and the parameters of such access.
1.8 "DeltaBase Functionality" shall mean the DeltaBase software and
documentation provided to Lexicon hereunder; provided, however, that the
DeltaBase Functionality shall exclude all Third Party hardware and software,
including the Third Party hardware and software listed on Exhibit B.
1.9 "DeltaBase Information" shall mean the information included
within DeltaBase, including, without limitation the following: [*] and related
data and/or information, generated or developed by or on behalf of Deltagen from
or relating to Knockout [*] and entered into one or more databases and [*] or as
to which Deltagen has rights or licenses, to be provided under a subscription to
DeltaBase on a nonexclusive basis to DeltaBase subscribers generally (including
Lexicon).
1.10 "Deltagen Patent Rights" shall mean (a) patents and/or patent
applications owned by or licensed (with the right to grant (sub)licenses) to
Deltagen, as of the Effective Date or during the term of this Agreement, which
comprise (i) with respect to a Product, any claims covering making, having made,
using, selling, offering for sale, importing or otherwise commercializing any
Product, or (ii) with respect to a Target Gene, any claim covering (A) a
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
2
nucleic acid molecule, polynucleotide, oligonucleotide or nucleotide sequence
comprising the sequence of a Target Gene (or its human ortholog) or Mutated Gene
or any derivative thereof, (B) a protein, polypeptide or amino acid sequence
comprising an expression product of a Target Gene (or its human ortholog) or
Mutated Gene, or portion or fragment thereof, (C) a [*], (D) an [*] containing
such [*], or (E) uses of any of the foregoing; and (b) any divisions,
continuations, re-issues, re-examinations, extensions or other governmental
actions which extend any of the subject matter of the patent applications or
patents in subsection (a) above; provided that Deltagen Patent Rights shall
exclude the Excluded Patent Rights.
1.11 "Deltagen Proprietary Information" shall mean DeltaBase
Information that is confidential or proprietary to Deltagen; provided, however,
that Deltagen Proprietary Information shall exclude any data or information that
(a) was publicly known prior to disclosure of such data and/or information by
Deltagen to Lexicon, (b) was otherwise known by Lexicon prior to disclosure of
such data and/or information by Deltagen to Lexicon, or (c) is independently
generated or developed by employees or agents of Lexicon without access to or
use of DeltaBase Information, unless such independently developed data or
information or the generation, development or use thereof would, absent the
rights and licenses granted under this Agreement, infringe any of the Deltagen
Patent Rights.
1.12 "Derivative Work" shall mean any and all modifications,
improvements, enhancements, translations, abridgments and the like to DeltaBase,
and includes, without limitation, (a) for copyrightable or copyrighted material,
any modification, translation including translation into other computer
languages, port, abridgment, condensation, expansion, correction, addition,
extension, adaptation, extraction, or other form in which such material may be
recast, transformed, or adapted which if prepared without a license to do so
would result in copyright infringement; (b) for patentable or patented material,
any improvement thereon; and (c) for material which is protected by trade
secret, any new material derived from such existing trade secret material,
including new material which may be protected by copyright, patent and/or trade
secret laws.
1.13 "derived from" shall mean obtained, developed, created, tested,
identified, discovered, synthesized, designed, resulting from, based upon or
otherwise generated through (whether directly or indirectly, or in whole or in
part) material use of, and anything so derived from such material use shall be
referred to herein, in the singular, as a "derivative" or, collectively, as
"derivatives."
1.14 "Diagnostic Product" shall mean any product, other than a
database, developed or generated by, with or on behalf of Lexicon that (a) is
for use in (i) the diagnosis and monitoring (but in no event the methods of
prevention or treatment) of any disease, state or condition in humans (including
the diagnosis of disease susceptibility), (ii) the selection of a method of
prevention of treatment of any disease, state or condition in humans, and/or
(iii) the determination of genetic traits in humans, and (b) is derived from the
use by Lexicon of, or makes any use of, any (i) Knockout Mice Materials
delivered to Lexicon by Deltagen under this Agreement (or any tissues, cells,
materials, information, data or progeny derived therefrom), (ii) Deltagen
Proprietary Information, or (iii) Deltagen Patent Rights.
1.15 "Effective Date" shall mean the date first set forth above.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
3
1.16 "ES Cell Line" shall mean, with respect to a Target Gene, the
embryonic stem cell line used to produce a line of Knockout Mice containing
within their genome the corresponding Mutated Gene.
1.17 "Excluded Patent Rights" shall mean (a) the patents and/or
patent applications owned by, or licensed to Deltagen claiming (i) [*] or (ii)
any product, formulation or composition, [*] except to the extent such claims
are derived solely from the Target Gene or Mutated Gene and/or DeltaBase
Information with respect thereto; and (b) any divisions, continuations,
continuations-in-part, reissues, reexaminations, extensions or other
governmental actions which extend any of the subject matter of the patent
applications or patents in subsection (a) above.
1.18 "First Commercial Sale" shall mean the first sale for use or
consumption by the general public of a Product in a country after all required
marketing and pricing or pricing reimbursement approvals to be granted by the
governing health authority of such country have been obtained. For the avoidance
of doubt, First Commercial Sale shall not include the sale of any Product for
use in clinical trials or for compassionate use prior to the applicable Health
Registration Approval.
1.19 "FDA" shall mean the US Food & Drug Administration.
1.20 "Frozen Sperm" shall have the meaning set forth in Section
5.1.2.
1.21 "Health Registration Approval" shall mean, with respect to a
Product in any country, approval for marketing and sale of that Product by the
requisite governmental or regulatory authority in or for such country (e.g.,
approval of a New Drug Application with respect to a Product by the FDA).
1.22 "Initial Subscription Term" shall mean the period commencing on
the Effective Date and ending on the fourth (4th) anniversary thereof.
1.23 "Knockout Mice" or "Knockout Mouse" shall mean, with respect to
a [*], mice or a mouse containing within [*].
1.24 "Knockout Mice Materials" shall mean, Knockout Mice, ES Cell
Lines and Frozen Sperm, or any of the foregoing.
1.25 "Knockout Mice Material Access Term" shall mean, with respect to
Lexicon's right to obtain (and Deltagen's obligation to supply to Lexicon)
Knockout Mice Materials with respect to each Phenotype Set delivered to Lexicon
hereunder, the period commencing on the date on which Lexicon first receives
such Phenotype Set and ending on the later of (a) the expiration or earlier
termination of the Subscription Term or (b) the first [*] anniversary of the
date of Lexicon's receipt of such Phenotype Set.
1.26 "Major Market Country" shall mean any of the following
countries: [*].
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
4
1.27 "Mutated Gene" shall mean a [*] chosen or targeted by Deltagen
and used by Deltagen in the generation of any Knockout Mice Materials.
1.28 "Net Sales" shall mean, with respect to a Product, the gross
amount invoiced by Lexicon, its Affiliates or licensee(s) for sales of such
Product to Third Parties, less (but only if and to the extent normal and
customary and actually paid, taken, imposed or allowed and not reimbursed by any
Third Party):
(a) trade, quantity and cash discounts actually allowed;
(b) discounts, refunds, rebates, chargebacks, retroactive
price adjustments, billing errors and any other allowances (including,
without limitation, government-mandated and managed health
care-negotiated rebates) actually granted which effectively reduce the
net selling price;
(c) product returns credits and allowances actually granted;
(d) any tax imposed on the production, sale, delivery or use
of the product (excluding federal, state or local taxes based on
income);
(e) freight, postage, shipping, customs duties, excises,
tariffs, surcharges, other governmental charges (excluding federal,
state or local taxes based on income) and insurance charges actually
allowed or paid for delivery of Products;
(f) payments or rebates paid with respect to such Product in
connection with state or federal Medicare, Medicaid or similar programs
in the United States or in connection with similar programs in other
countries in which there are sales; and
(g) adjustments for bad debts.
Such amounts shall be determined from the books and records of Lexicon, its
Affiliates or licensee(s), as the case may be, maintained in accordance with the
generally accepted accounting principles, consistently applied.
In the event the Product is sold as part of a Combination Product (as
defined below), the Net Sales from the Combination Product, for the purposes of
determining royalty payments, will be determined by multiplying the Net Sales of
the Combination Product by the fraction, A/A+B where A is the average sale price
of the Product when sold separately in finished form and B is the average sale
price of the other active compounds or ingredients in the Combination Product
sold separately in finished form.
In the event that the average sale price of the Product can be
determined but the average sale price of the other active compounds or
ingredients cannot be determined, Net Sales for purposes of determining royalty
payments will be calculated by multiplying the Net Sales of the Combination
Product by the fraction C/C+D where C is the selling party's average sales price
of the Product and D is the difference between the average selling price of the
Combination Product and the average selling price of the Product. If the average
sale price of the other active
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
5
compounds or ingredients can be determined but the average price of the Product
cannot be determined, Net Sales for purposes of determining royalty payments
will be calculated by multiplying the Net Sales of the Combination Product by
the following formula: one minus C/C+D where C is the average selling price of
the other product(s) and D is the difference between the average selling price
of the Combination Product and the average selling price of the other active
compounds or ingredients.
In the event that the average sales price of both the Product and the
other active compounds or ingredients in the Combination Product cannot be
determined, the Net Sales of the Product shall be negotiated in good faith by
the parties.
The Net Sales price for a Combination Product in a given country will
be calculated once each calendar year and such price will be used during all
applicable royalty reporting periods for the entire calendar year for such
country, absent extraordinary conditions or events. When determining the average
sale price of a Product or the other active compounds or ingredients in the
Combination Product, the average sale price will be calculated using data
arising from the twelve (12) months preceding the calculation of the Net Sales
price for the Combination Product. As used above, the term "Combination Product"
means any Product sold in conjunction with any other active component(s)
(whether packaged together or in the same therapeutic formulation).
Free samples, in reasonable and customary amounts, of Product and the
disposition of Product for, or the use of Product in, pre-clinical or clinical
(Phase 1 - 3) trials or other market-focused (Phase 4) trials in which Product
is provided to patients without any payment shall not result in any Net Sales.
1.29 "Person" shall mean an individual, corporation, partnership,
limited liability company, trust; business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.
1.30 "Phenotype Set" shall mean, with respect to a distinct [*] and
entered into one or more databases comprising DeltaBase. During the applicable
Knockout Mice Material Access Term, [*].
1.31 "Primary Site" shall mean the site that is Lexicon's principal
place of business, which as of the Effective Date is located at 0000 Xxxxxxxx
Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000, or such other site in the event that
Lexicon changes its current principal place of business.
1.32 "Product(s) " shall mean, collectively, [*]. Notwithstanding
anything to the contrary in this Agreement, [*] shall not be considered
Products.
1.33 "Royalty Term" shall mean, with respect to any Product in any
country, the period commencing with the First Commercial Sale of such Product in
such country, and ending on the later of (a) the last to expire Valid Claim that
would, absent the rights and licenses granted under this Agreement, be infringed
by making, having made, using, selling, offering for sale, importing or
otherwise commercializing such Product in such country or (b) [*] years
following the First Commercial Sale of such Product in such country.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
6
1.34 "Subscription Term" shall mean the Initial Subscription Term,
and any extensions under Section 3.5.2.
1.35 "Target Gene" shall mean a gene or sequence that is described,
referenced or otherwise included in the DeltaBase Information by Deltagen and
that is delivered to Lexicon hereunder.
1.36 "Therapeutic Product" shall mean any product developed or
generated by, with or on behalf of Lexicon which (a) is comprised of or includes
one or more active ingredient(s), (b) [*], and (c) is derived from the use by
Lexicon of, or which makes any use of, any (i) Knockout Mice Materials delivered
to Lexicon by Deltagen under this Agreement (or any tissues, cells, materials or
progeny derived therefrom); (ii) Deltagen Proprietary Information; or (iii)
Deltagen Patent Rights.
1.37 "Third Party" shall mean any Person other than Deltagen, Lexicon
and their respective Affiliates.
1.38 "Valid Claim" shall mean any claim of any particular patent that
(a) is part of the Deltagen Patent Rights; and (b) is issued or granted by the
United States Patent and Trademark Office (or, in the case of a patent that
would, absent the rights and licenses granted under this Agreement, be infringed
by making, having made, using, selling, offering for sale, importing or
otherwise commercializing a Product, by the patent granting authority for such
country); and (c) has not been finally declared unpatentable or invalid at the
completion of post-grant opposition proceedings including any appeal therefrom;
and (d) is unexpired and has not been held unenforceable, unpatentable or
invalid by a court or other governmental body having legal competency to hear
the matter and proper jurisdiction and venue in a decision that is unappealable,
or unappealed within the time allowed for appeal; and (e) has not been rendered
unenforceable through disclaimer or otherwise or been lost through an
interference proceeding.
1.39 "Valid Reach-Through Claim" shall mean:
(a) with respect to a [*], (i) a Valid Claim that would,
absent the rights and licenses granted under this Agreement, be
infringed by [*] or (ii), where the Product (A) interacts with the human
[*], (B) affects a [*] associated with such [*], and (C) was derived
from (I) [*] delivered to Lexicon by Deltagen under this Agreement (or
any [*] derived therefrom) and/or (II) Deltagen Proprietary Information,
a [*] are specifically disclosed; and
(b) with respect to a [*], (i) a Valid Claim that would,
absent the rights and licenses granted under this Agreement, be
infringed [*] or (ii), where the Product (A) interacts with the [*], (B)
measures a [*] associated with such [*], and (C) was derived from (I)
[*] delivered to Lexicon by Deltagen under this Agreement (or any [*]
and/or (II) Deltagen Proprietary Information, a [*] to such [*] are
specifically disclosed.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
7
ARTICLE 2
REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS
2.1 Mutual Representations and Warranties. Each party hereby
represents and warrants to the other party as follows:
2.1.1 Corporate Existence. Such party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated.
2.1.2 Authorization and Enforcement of Obligations. Such party
(a) has the requisite power and authority and the legal right to enter
into this Agreement and to perform its obligations hereunder, and (b)
has taken all necessary action on its part to authorize the execution
and delivery of this Agreement and the performance of its obligations
hereunder. This Agreement has been duly executed and delivered on behalf
of such party, and constitutes a legal, valid, binding obligation,
enforceable against such party in accordance with its terms.
2.1.3 Consents. All necessary consents, approvals and
authorizations of all governmental authorities and other Persons
required to be obtained by such party in connection with its execution
of this Agreement have been obtained.
2.1.4 No Conflict. The execution and delivery of this
Agreement and the performance of such party's obligations hereunder (a)
do not conflict with or violate any requirement of applicable laws or
regulations and (b) do not conflict with, or constitute a default under,
any contractual obligation of such party.
2.2 Deltagen Representation, Warranty, and Covenant. Deltagen hereby
represents and warrants to Lexicon that:
2.2.1 Ownership. As of the Effective Date, Deltagen is the
owner or licensee of the Deltagen Patent Rights and, to Deltagen's best
knowledge, has the right to grant the licenses thereunder contemplated
hereby.
2.2.2 Functionality. When operated with the recommended Third
Xxxxx hardware and software listed on Exhibit B, the DeltaBase
Functionality shall perform substantially in accordance with the product
documentation provided by Deltagen therewith and to its best knowledge
shall be free from material defects.
2.2.3 Year 2000. When operated with the recommended Third
Party hardware and software listed on Exhibit B, the DeltaBase
Functionality will not produce errors in processing date and/or time
data in connection with the year 2000 change, will successfully and
correctly transition and, with respect to the correct system date, will
remain operational and properly functioning into and beyond the year
2000, and will accurately and correctly process any and all date and/or
time data from, into and between the twentieth and twenty-first
centuries, when the DeltaBase Functionality is used with accurate date
and/or time data in accordance with its documentation, provided that all
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
8
other products used with the DeltaBase Functionality properly exchange
date and/or time data with the DeltaBase Functionality.
2.2.4 Conformity to DeltaBase Deliverables. The DeltaBase
Information and the Phenotype Sets shall conform to the DeltaBase
Deliverables set out in Exhibit D, and shall accurately represent the
results of the tests performed by Deltagen to generate and develop the
data and information contained therein.
2.2.5 "Viruses," et al. To Deltagen's best knowledge, at the
time of delivery, the DeltaBase Functionality shall not include any
so-called "computer virus," "worm," or "Trojan horse" or other similar
malicious computer code.
2.3 Breaches. In the event of the breach of any representation or
warranty by Deltagen under Section 2.2, Lexicon shall provide prompt written
notice thereof to Deltagen describing in reasonably specific detail the nature
of the alleged breach. With respect to each breach, unless the existence of a
breach is in dispute, Deltagen shall, within thirty (30) days after its receipt
of such notice, (a) in the case where such breach is the result of or relates to
Knockout Mice Materials, mutually agree with Lexicon upon a plan of remediation,
or (b) in all other cases, use reasonable commercial efforts to promptly remedy
any such breach.
2.4 Notice. Deltagen shall notify Lexicon of any notice of
infringement, claims, judgments or settlements against or owed by Deltagen, or
any pending claims or litigation, known to Deltagen, relating to the applicable
Deltagen Patent Rights which Deltagen believes will materially and adversely
affect the rights and licenses granted Lexicon hereunder, subject to any
obligations of confidentiality.
2.5 Knowledge Qualifier. For purposes of this Agreement, the terms
"to Deltagen's best knowledge" and "known to Deltagen" (or phrases to similar
effect) shall mean, in each case, the knowledge of employees of Deltagen having
made such investigation with respect to such subject matter as any reasonably
diligent company would perform in the normal course of its own business
operations.
2.6 DISCLAIMER OF WARRANTIES.
2.6.1 DELTAGEN MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO THE PHENOTYPIC OUTCOME OR OTHER RESULTS OF
THE PRESENCE OR ABSENCE OF A MUTATED GENE.
2.6.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE
2, DELTAGEN MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MUTATED GENES, TARGET GENES, DELTABASE, KNOCK-OUT
MICE MATERIALS OR DELTAGEN PATENT RIGHTS OR WITH RESPECT TO ANY
DERIVATIVES OF ANY OF THE FOREGOING, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT OF THE PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY
RIGHTS OF ANY OTHER PERSON.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
9
2.6.3 WITHOUT LIMITING THE FOREGOING, DELTAGEN MAKES NO
REPRESENTATIONS OR WARRANTIES CONCERNING THE AVAILABILITY OF, OR ACCESS
TO, DELTABASE, OR IF ACCESS IS ESTABLISHED, THAT IT WILL BE
UNINTERRUPTED, TIMELY, SECURE, OR ERROR-FREE; NOR DOES DELTAGEN, EXCEPT
AS EXPRESSLY SET FORTH IN SECTION 2.2, MAKE ANY REPRESENTATION OR
WARRANTY CONCERNING THE ACCURACY OR RELIABILITY OF ANY DELTABASE
INFORMATION OR OTHER CONTENT CONTAINED IN OR OBTAINED THROUGH THE
WEBSITE ACCESS AND DELTAGEN HEREBY EXPRESSLY DISCLAIMS ANY LIABILITY
WITH RESPECT THERETO.
2.7 Third Party Licenses. Without limiting the generality of the
foregoing set forth in Section 2.6, Lexicon shall be required to obtain the
hardware and software set forth on Exhibit B in order to use the DeltaBase in
accordance with this Agreement.
2.8 Governmental Consents and Approvals. Each party shall be
responsible, at its own expense, for complying with all applicable laws and
obtaining all applicable governmental and regulatory approvals, consents,
permits and licenses to perform its duties and responsibilities under this
Agreement. In particular: (a) Deltagen shall perform its obligations in
conformance with (i) the DeltaBase Deliverables, (ii) generally accepted
industry standards for non-clinical research and laboratory animal care and
welfare as reasonably implemented by Deltagen in its facilities and operations,
and (iii) if and to the extent applicable, all other local, state and federal
laws, rules, regulations, and ordinances including, but not limited to, the
federal Food, Drug and Cosmetic Act (21 U.S.C. 301 et seq.); FDA regulations
including, but not limited to, Good Laboratory Practices (21 C.F.R. Part 58) and
Good Manufacturing Practices (21 C.F.R. Parts 210 and 211); and the federal
Animal Welfare Act (7 U.S.C. 2131 et seq.), and the regulations of the United
States Department of Agriculture; and (b) Lexicon shall be responsible for
complying with all such laws (including all other applicable local, state and
federal laws, rules, regulations, and ordinances) and for obtaining all such
governmental and regulatory approvals, consents, permits and licenses that may
be required in connection with Lexicon's access to, and the receipt, storage,
handling, disposal and/or use of any Knockout Mice Materials (and/or any
tissues, cells, materials or progeny derived from any of the foregoing) in
accordance with this Agreement. The parties will consult and cooperate each
other with respect to their respective compliance with this Section 2.8.
ARTICLE 3
DELTABASE ACCESS
3.1 Access to the DeltaBase.
3.1.1 Access. Subject to the terms and conditions of this
Agreement, during the Subscription Term (and thereafter with respect to
Phenotype Sets delivered to Lexicon during the Subscription Term),
Deltagen shall provide Lexicon with on-line access in accordance with
Exhibit A to the DeltaBase and the Phenotype Sets contained in DeltaBase
via a secure sockets layer ("SSL") internet website. In the event that,
on or after six months following the Effective Date, Lexicon requests an
alternative form of access (e.g., on-site installation of DeltaBase on
terms substantially equivalent to those
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
10
made available to other DeltaBase subscribers), Deltagen shall consider
such request in good faith, taking into account the reasonable interests
of Lexicon and Deltagen.
3.1.2 Support. During the Subscription Term, Deltagen shall
provide Lexicon with DeltaBase usage support at the Primary Site at
Deltagen's then current rates for support, which rates shall not be
greater than those rates that Deltagen generally makes available to its
DeltaBase subscribers for comparable services. Deltagen shall provide
such support in accordance with the Support and Training Plan attached
as Exhibit C. Lexicon shall be solely responsible at its sole cost for,
and shall, obtain the recommended Third Party hardware and software
listed on Exhibit B. Lexicon shall appoint one (1) Lexicon employee who
shall be both (a) the primary person to contact Deltagen, and (b) the
primary contact for Deltagen, for all communications regarding the
support of the DeltaBase at the Primary Site. Lexicon shall notify
Deltagen in writing promptly upon such appointment and thereafter upon
any changes in such appointments.
3.1.3 Access Restrictions. Lexicon shall use its best
commercially reasonable efforts to maintain password controls, firewalls
and other network security measures utilizing technology and procedures
adequate to prevent Third Party or other unauthorized access and to
limit access to DeltaBase to authorized employees of Lexicon, consistent
with, and subject to, the terms and conditions of this Agreement.
3.1.4 Training. Deltagen shall provide Lexicon [*] days of
on-site training at the Primary Site by [*] Deltagen employees regarding
the use of the DeltaBase. Upon request by Lexicon, Deltagen shall
provide Lexicon with such additional training services in such manner
and at such rates as shall be mutually agreed between the parties, which
shall in any event be no greater than the rates Deltagen generally makes
available to its subscribers for comparable services.
3.2 DeltaBase Information and Subscription Extension Fee.
3.2.1 Delivery of Phenotype Sets. During the Subscription
Term, Deltagen shall deliver to Lexicon on a [*] basis, Data Sets as
part of the DeltaBase Information. Within ten (10) days of provision of
on-line access under Section 3.1.1, Deltagen shall deliver to Lexicon
all Phenotype Sets (a total of [*] Phenotype Sets) previously made
available to other DeltaBase subscribers as of the Effective Date.
Thereafter, the Data Sets shall be delivered to Lexicon on a quarterly
basis in each year during the Subscription Term and shall include an
average of [*] distinct Phenotype Sets per year delivered at the average
rate of [*] or [*] Phenotype Sets per quarter, as and when such Data
Sets are provided or made available to other DeltaBase subscribers.
Deltagen shall deliver to Lexicon all Phenotype Sets included in
DeltaBase and made available to other DeltaBase subscribers during the
Subscription Term, and shall deliver to Lexicon each such Phenotype Set
(other than the [*] Phenotype Sets previously made available to other
DeltaBase subscribers as of the Effective Date) no later than the time
such Phenotype Set is first provided or made available to any other
DeltaBase subscriber. For the avoidance of doubt, Deltagen shall deliver
to Lexicon [*] Phenotype Sets during the Initial Subscription Term.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
11
3.2.2 Inspection and Remedies of Delivered Phenotype Sets. For
[*] days after it receives any Data Set, Lexicon may examine the
contents of such Data Set to determine whether it satisfies the content
criteria described in Exhibit D. If it determines that such content
criteria are not satisfied by the Data Set, Lexicon may, before the end
of such [*] day period, notify Deltagen in writing of such
determination, setting forth the deficiencies with respect to such Data
Set, and Deltagen shall use its commercially reasonable efforts to
remedy such deficiencies within [*] days of its receipt of such notice.
In the absence of such timely notice by Lexicon, such Data Set shall be
conclusively presumed to comply with the content criteria.
3.2.3 Supplemental DeltaBase Information. During the Knockout
Mice Material Access Term for each Phenotype Set, Deltagen shall
additionally provide to Lexicon all updates or supplements to the
DeltaBase Information with respect to Phenotype Sets previously
delivered to Lexicon hereunder that are intended by Deltagen for
inclusion in DeltaBase and provided under a subscription to DeltaBase on
a nonexclusive basis to all DeltaBase subscribers generally (including
Lexicon). Deltagen, at its sole discretion, also may from time to time
release on a nonexclusive basis to its DeltaBase subscribers (including
Lexicon), as part of the general DeltaBase subscription, such other
updates of the DeltaBase Information as Deltagen elects to release.
Notwithstanding the foregoing and for the avoidance of doubt, such
updates and supplements shall not include information or data generated
or developed by or on behalf of Deltagen that is (i) for its or its
Affiliates' use, (ii) for use on an exclusive basis by one or more
specific Third Parties, or (iii) not intended by Deltagen for inclusion
in DeltaBase.
3.2.4 Proposed Target Genes. During the Subscription Term,
Lexicon may, from time to time, notify Deltagen of certain target genes
(the "Proposed Target Genes") from which Lexicon would like Deltagen to
generate Knockout Mice Materials and corresponding Data Sets for
inclusion as part of the Phenotype Sets and the Knockout Mice Materials
provided by Deltagen to its DeltaBase subscribers, including Lexicon.
Deltagen shall use commercially reasonable efforts (to the same extent
that Deltagen generally employs for its DeltaBase Target Genes) to
generate Knockout Mice Materials and corresponding Data Sets from the
Proposed Target Genes nominated by Lexicon, as set forth above in this
Section 3.2; provided that, Deltagen shall not be required to make such
efforts for more than [*] Proposed Target Genes in any twelve (12) month
period during the Initial Subscription Term; or for more than [*]
Proposed Target Genes during the Initial Subscription Term.
3.3 DeltaBase Access Plan. Lexicon shall comply with the DeltaBase
Access Plan at all times during and after the term of this Agreement.
3.4 Ownership and Use of DeltaBase.
3.4.1 Ownership. Notwithstanding anything to the contrary
herein, as between Deltagen and Lexicon, Deltagen shall retain all
right, title and interest in and to the DeltaBase, including without
limitation, the DeltaBase Information and all worldwide intellectual
property rights therein and thereto.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
12
3.4.2 Permitted Use.
3.4.2.1 Subject to the terms and conditions of this
Agreement (including without limitation prompt payment of all
payments due hereunder), Lexicon may (a) use (i) the DeltaBase
Information solely to conduct internal research (including
research conducted by Contract Parties and/or in collaboration
with Corporate Partners, to the extent expressly permitted
herein), and (ii) the DeltaBase Functionality solely to search
and access the DeltaBase Information, in each case for the sole
benefit of Lexicon (and for the benefit of its Corporate
Partners, to the extent expressly permitted herein), and (b)
commercially exploit the results of such internal research in
such manner as Lexicon considers appropriate.
3.4.2.2 Lexicon shall not disclose, broker, license or
otherwise grant rights in or to, or disclose, sell, assign, or
transfer the Knockout Mice Materials or their progeny, DeltaBase
or any portion thereof or any interest therein or thereto, to
any Third Party. Lexicon shall not authorize and shall use its
best commercially reasonable efforts to prevent any unauthorized
access, copying, alteration or use of the DeltaBase or any
portion thereof.
3.4.2.3 Lexicon shall not, in part or in whole, reverse
engineer, decompile, reproduce, publicly display, adapt, modify,
prepare Derivative Works based upon, or distribute copies (in
whatever form, whether tangible or intangible, by any means
whatsoever whether now known or hereafter invented) of the
DeltaBase for any purpose except as set out in this Section
3.4.2.3 or as permitted in Section 6.4. Lexicon shall have the
right to export specific data or information from the DeltaBase
Information to the extent reasonably necessary to exercise its
rights under this Agreement and for purposes of conducting
pre-clinical and/or clinical studies and trials and inclusion in
pertinent files and reports (collectively, "Reports"), and to
thereby prepare a particular species of limited Derivative Works
of the DeltaBase Information, solely for its own internal
research purposes (and, to the extent expressly permitted
herein, those of its Corporate Partners) and solely for the
purposes of system integration and/or to facilitate data
analysis and relational analysis; provided that, such Reports
and Derivative Works are not merely copies or extracts or
summaries of DeltaBase Information, and provided further, that
such Reports and Derivative Works do not include any text or
other information included in the DeltaBase Information (or
summaries or extracts therefrom), other than de minimis portions
as may be reasonable and customary at Lexicon and in the
industry to include or reference in connection with research and
development activities, as established through reasonable
evidence. Deltagen shall have no obligation to support any such
Derivative Works. Notwithstanding anything to the contrary in
this Agreement, the right of Lexicon to prepare Derivative Works
under this Section 3.4.2.3 shall not diminish or otherwise
impair Deltagen's right, title and interest in and to DeltaBase.
Lexicon shall own any such Derivative Works, subject to
Deltagen's ownership of and prior rights in the DeltaBase
Information included or incorporated therein or on which such
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
13
Derivative Work is based. In no event, however, shall this
Section 3.4.2.3 be interpreted to allow disclosures, sales,
licenses or other transfers of such Derivative Works to Third
Parties (other than such disclosures or licenses to Contract
Parties and/or Corporate Partners as are expressly permitted
hereunder), or any compilation of databases or products that
include any DeltaBase Proprietary Information, for sale,
licensing or other commercialization. Without limiting the
foregoing, and notwithstanding anything to the contrary in this
Agreement, Lexicon shall not have the right (a) to use as part,
or to incorporate into, the LexVision database that it makes
available for subscription to Third Parties, (b) to use as part
of, or to incorporate into, any products or databases for sale,
licensing or other commercialization, or (c) to disclose, sell,
license or otherwise transfer to a Third Party (other than such
disclosures or licenses to Contract Parties and/or Corporate
Partners as are expressly permitted hereunder), (i) any data,
information or other results, materials, progeny derived from
Lexicon's use or analysis of any Knockout Mice Materials (or any
tissues, cells, materials or progeny derived therefrom), and/or
(ii) Deltagen Proprietary Information. Notwithstanding anything
to the contrary in this Agreement, Lexicon shall not have the
right to use DeltaBase, the Knockout Mice Materials or any
derivatives thereof for the purpose of marketing or
commercializing the LexVision database that it makes available
for subscription to Third Parties, or any similar data,
information, knockout mice or ES cell line product.
3.4.3 Records on Use of DeltaBase. Lexicon shall keep and
maintain records (in such reasonable form as Lexicon shall determine) of
Lexicon's access to and use of the DeltaBase Information and Knockout
Mice Materials during and after the term of this Agreement. Lexicon
shall at least maintain such records for a period commencing on
Lexicon's initial access to, or use of, any of the foregoing and ending
[*] years after Lexicon ceases to have access to, or to use, any of the
foregoing. Such records shall be in sufficient detail and in a format to
enable Deltagen to monitor compliance with the terms and conditions of
this Agreement, including without limitation, the DeltaBase Access Plan.
Upon Deltagen's reasonable request not more than once in each calendar
year, Lexicon shall permit an independent third party auditor designated
by Deltagen and reasonably acceptable to Lexicon (at Deltagen's cost) to
have access during ordinary business hours to such records as may be
reasonably necessary to verify compliance with the terms and conditions
of this Agreement regarding use of the DeltaBase for any year not more
than [*] months prior to the date of such request. Lexicon shall be
given not less than [*] days prior advance notice of any request for
access. Such auditor shall be bound by obligations of confidentiality no
less restrictive than those contained in this Agreement and shall
disclose to Deltagen only whether Lexicon is in compliance with the
applicable terms and conditions of this Agreement. If such audit reveals
that Lexicon is in material non-compliance with this Agreement, Lexicon
shall pay or reimburse the costs of and fees for such audit.
3.4.4 Unauthorized Disclosure or Use. Lexicon shall notify
Deltagen immediately in the event of any actual or suspected
unauthorized access to, or disclosure, use, loss, or theft of, the
DeltaBase or any part thereof, and shall take all steps reasonably
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
14
requested by Deltagen to investigate and terminate any of the foregoing.
Notwithstanding this obligation, subject to the terms and conditions of
this Agreement, Deltagen confirms that Lexicon shall have the right to
use the DeltaBase solely for Lexicon's internal use by authorized
personnel of Lexicon in secure work facilities in accordance with the
terms and conditions of this Agreement and the DeltaBase Access Plan set
out in Exhibit A. Lexicon shall have no access to or right to use the
DeltaBase except under the terms and conditions of this Agreement.
3.4.5 Records and Reports. Lexicon shall keep and maintain
complete and accurate records of its activities conducted under this
Agreement and the results thereof sufficient to permit Deltagen to
confirm the accuracy of Lexicon's payment obligations under this
Agreement.
3.5 Subscription Term and Fees.
3.5.1 Initial Subscription Term. No subscription fees shall be
payable by Lexicon for the Initial Subscription Term.
3.5.2 Renewal Terms; Subscription Extension Fee. To the extent
that Deltagen continues to make DeltaBase available as a commercial
product to subscribers in the general course of Deltagen's business,
Lexicon may extend the Initial Subscription Term for successive periods
each of [*] year (each a "Renewal Term") by sending written notice to
Deltagen no later than [*] months after the expiration of the Initial
Subscription Term, or, if applicable, any Renewal Term, and paying to
Deltagen a subscription fee of [*] dollars ($[*]) per each such Renewal
Term within (or prior to) such [*] month period by wire transfer in
immediately available funds to an account designated by Deltagen.
ARTICLE 4
RIGHTS AND LICENSES
4.1 Rights and Licenses Granted. Subject to the terms and conditions
of this Agreement, Deltagen hereby grants to Lexicon (a) the non-exclusive right
to access and use the DeltaBase, Deltagen Proprietary Information and Knockout
Mice Materials, solely for internal research use (including use by Contract
Parties on Lexicon's behalf) for the purposes contemplated hereby (including,
without limitation, research directed toward the discovery, development and
commercialization of Products) during the Subscription Term and thereafter with
respect to Lexicon's access to the Phenotype Sets delivered under Section 3.2.1
of this Agreement, and (b) a non-exclusive world-wide license under Deltagen
Patent Rights to discover, develop, make, have made, use, offer for sale, sell
and import Products. The rights and licenses granted to Lexicon under this
Section 4.1 shall not include the right to grant sublicenses (except as
expressly permitted under Section 4.2) and are non-transferable (except as may
be expressly permitted pursuant to Section 9.3).
4.2 Limited Sublicense Rights. Subject to the terms and conditions
of this Agreement, Lexicon shall have (a) the non-exclusive right to use the
DeltaBase, Deltagen Proprietary Information and Knockout Mice Materials in
research conducted by Lexicon and/or Contract Parties with or for the benefit of
Corporate Partners (including, without limitation,
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
15
research directed toward the discovery, development and commercialization of
Products), and (b) the right to grant to Corporate Partners non-exclusive
world-wide sublicenses under Deltagen Patent Rights to discover, develop, make,
have made, use, offer for sale, sell and import Products discovered by Lexicon,
either alone or in collaboration with such Corporate Partners; provided that (w)
Lexicon shall not transfer any Knockout Mice Materials to any Corporate Partner,
(x) Lexicon shall not provide any Corporate Partner with access to DeltaBase or
any portion thereof (provided that Lexicon may disclose to a Corporate Partner
Derivative Works directly related to a Product for which Lexicon has granted
rights to such Corporate Partner and/or the Target Gene from which such Product
was derived, for purposes of conducting pre-clinical and/or clinical studies and
trials relating to Products and inclusion in Reports), (y) any such sublicense
shall be restricted to the Deltagen Patent Rights directly related to a Product
for which Lexicon has granted rights to such Corporate Partner and/or the Target
Gene from which such Product was derived, and (z) such Corporate Partner shall
expressly assume all applicable milestone payment and royalty obligations
(without duplication of payments made by Lexicon) relating to any Product for
which Lexicon has granted commercialization rights to such Corporate Partner.
4.3 Milestone Payments and Royalties.
4.3.1 Milestone Payments for Therapeutic Products. During and
after the term of this Agreement, if and when any Therapeutic Product(s)
with respect to which there is a Valid Reach-Through Claim meet(s) the
milestones set forth below in this Section 4.3.1, Lexicon shall pay to
Deltagen the corresponding milestone payment, in each case within [*]
days after the milestone is reached for such Therapeutic Product:
(a) [*] dollars ($[*]) upon Lexicon's completion of
Phase II clinical trials in the United States (or equivalent
study in any Major Market Country);
(b) [*] dollars ($[*]) upon Lexicon's completion of
Phase III clinical trials in the United States (or equivalent
study in any Major Market Country); and
(c) [*] dollars ($[*]) upon Lexicon's obtaining of
the first Health Registration Approval in a Major Market
Country.
4.3.2 Royalties for Therapeutic Products. During the
applicable Royalty Term, Lexicon shall pay to Deltagen royalties on
annual Net Sales of each Therapeutic Product with respect to which there
is a Valid Reach-Through Claim, as follows:
(a) [*] percent ([*]%) of annual Net Sales of such
Therapeutic Product up to [*] dollars ($[*]);
(b) [*] percent ([*]%) of annual Net Sales of such
Therapeutic Product in excess of [*] dollars ($[*]) up to [*]
dollars ($[*]); and
(c) [*] percent ([*]%) of annual Net Sales of such
Therapeutic Product in excess of [*] dollars ($[*]).
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
16
For purposes of the foregoing, (i) annual Net Sales of a Therapeutic
Product shall be calculated on a calendar year basis; (ii) the
applicable Royalty Term shall be determined on a country-by-country
basis; (iii) the amount of annual Net Sales of such Therapeutic Product
for any country shall be the Net Sales in such country during such
calendar year or, if shorter, during the portion of such calendar year
that falls within the applicable Royalty Term; and (iv) the amount of
annual Net Sales referenced in subsections (a) through (c) above shall
be the aggregate annual Net Sales in all countries determined as
provided in the preceding clauses (i) through (iii).
4.3.3 Milestones and Royalties for Diagnostic Products. For
each Diagnostic Product with respect to which there is a Valid
Reach-Through Claim, Lexicon shall pay to Deltagen a milestone payment
of [*] dollars ($[*]) upon obtaining the first marketing approval from
any regulatory authority in a Major Market Country and a royalty of one
and [*] percent ([*]%) on the Net Sales of such Diagnostic Product
during the applicable Royalty Term.
4.3.4 Royalty Stacking. Lexicon shall be entitled to deduct,
from the quarterly royalty payments made by it in respect of Net Sales
of a given Product in a given country in accordance with Section 4.3.2
or 4.3.3, up to [*] percent ([*]%) of any payments made to a Third Party
to license patents covering such Third Party's technology if, in the
absence of such license, (a) the licensed use by Lexicon of the specific
technology licensed by Deltagen under Section 4.1 relating to Deltagen
Proprietary Information or Knockout Mice Materials from which a Product
was derived, (b) the human ortholog of the Target Gene (or an expression
product or portion or fragment of such human ortholog) with which such
Product interacts, or (c) making, having made, using, selling, offering
for sale, importing or otherwise commercializing such Product, would or
is likely to, in the reasonable judgment of Lexicon, infringe such
patents; provided, however, that in no event shall a deduction under
this Section 4.3.4 reduce any quarterly royalty payment made by Lexicon
in respect of Net Sales of a given Product in a given country below the
following royalty rates:
4.3.4.1 For Therapeutic Products:
(a) [*] percent ([*]%) of annual Net Sales
of a Therapeutic Product up to [*] dollars ($[*]);
(b) [*] percent ([*]%) of annual Net Sales
of such Therapeutic Product in excess of [*] dollars
($[*]) up to [*] dollars ($[*]); and
(c) [*] percent ([*]%) of Lexicon's annual
Net Sales of such Therapeutic Product in excess of [*]
dollars ($[*]).
For purposes of the foregoing, annual Net Sales of a
Therapeutic Product shall be calculated as provided in Section
4.3.2.
4.3.4.2 For Diagnostic Products, [*] percent ([*]%) of
annual Net Sales of such Diagnostic Product.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
17
4.4 Clarification of Payment Obligations. It is understood between
Lexicon and Deltagen that:
4.4.1 Payments made pursuant to Section 4.3 are non-creditable
and are nonrefundable. Without limiting the generality of the preceding
sentence, there shall be no credit or refund of amounts paid or payable
pursuant to Section 4.3 based on the existence of a Valid Reach-Through
Claim even if such Valid Reach-Through Claim subsequently is invalidated
or otherwise ceases to exist. However, the parties agree that where the
existence of a Valid Reach-Through Claim is a requirement for payment
under Sections 4.3, no payment obligation shall arise unless and until a
Valid Reach-Through Claim exists, and then only with respect to
milestones and/or Net Sales occurring after the issuance of such Valid
Reach-Through Claim.
4.4.2 Milestone payments shall be made only once with respect
to any given Product, regardless of the number of indications sought (or
approvals obtained) for such Product, whether alone or in combination
with other products, and regardless of any new dosage strengths,
preparations or forms of administration for such Product.
4.4.3 Milestone payments shall be made only once with respect
to Products that inhibit or otherwise modulate the activity of a
particular molecular target, regardless of the number of Products
developed to inhibit or otherwise modulate the activity of such
molecular target. Lexicon shall have no obligation to make milestone
payments with respect to milestones achieved with a back-up, replacement
or follow-on Product that inhibits or otherwise modulates the activity
of the molecular target of a Product for which Lexicon has already made
such milestone payments.
4.5 Certain Notices. Lexicon shall promptly notify Deltagen in
writing upon (a) the achievement or occurrence of each milestone, (b) the
obtaining of any Health Registration Approval for any Therapeutic Product in any
country, and (c) the First Commercial Sale of any Therapeutic Product in any
country.
4.6 Royalty Payments and Reports; and Audit Rights.
4.6.1 Royalty Payments. All royalty payments due to Deltagen
pursuant to Section 4.2.3 shall be paid within [*] days following the
end of each calendar quarter in which Net Sales occur for which
royalties are payable, and shall be made by wire transfer in immediately
available funds to an account designated by Deltagen.
4.6.2 Royalty Report. All royalty payments due pursuant to
Section 4.3.2 and/or 4.3.3 shall be accompanied by a report that sets
forth for the preceding calendar quarter the following information:
(a) the total royalties due pursuant to Section
4.3.2 and/or 4.3.3, including the total Net Sales for such
period, categorized by country in which such sale or
distribution occurred, and a breakdown of the calculation
thereof;
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
18
(b) a breakdown of all deductions applicable to
determining Net Sales; and
(c) the exchange rate(s) used to determine amounts
owing hereunder calculated in accordance with Section 4.7.2.
If at any time after the first payment is made in a country pursuant to
Section 4.3.2 or 4.3.3, as applicable, no payments are due to Deltagen
for Net Sales in such country for any reporting period, the written
report shall so state.
4.6.3 Audit Rights. Lexicon shall, and shall ensure that its
affiliates and (sub)licensees and (sub)distributors shall, keep and
maintain accurate records of all Net Sales for a period of at least [*]
years for each reporting period during and after the term of this
Agreement, in sufficient detail to enable the reports to be provided by
Lexicon under Section 4.6.2 to be verified. Deltagen shall have the
right, for a period of [*] years after receiving any report pursuant to
Section 4.6.2 to appoint a nationally recognized, independent certified
public accounting firm reasonably acceptable to Lexicon to inspect the
relevant records. Lexicon shall, and shall ensure that its affiliates
and (sub)licensees and (sub)distributors shall, make its records
available for inspection by such independent certified public accounting
firm during regular business hours at such place or places where such
records are customarily kept, upon reasonable notice, for the sole
purpose of determining the accuracy and correctness of the royalty
reports and payments under this Article 4. Such inspection right shall
not be exercised more than [*] in any calendar year. The independent
certified public accounting firm shall be subject to obligations of
confidentiality and shall disclose to Deltagen only whether or not the
records are correct and the specific details concerning, and amounts of,
any discrepancies. Deltagen shall bear the cost of any such inspection
under this Section; provided that if there is any underpayment of any
royalty payment due to Deltagen hereunder by [*] percent ([*]%) or more,
the costs of such inspection shall be borne by Lexicon, and such
underpayment shall be promptly paid to Deltagen by Lexicon with interest
at the rate specified Section 4.6.3.
4.7 Currency; Exchange Rates; and Interest.
4.7.1 Currency of Payment. All payments to be made under this
Agreement shall be made in U.S. dollars, unless otherwise mutually
agreed by the Parties.
4.7.2 Royalty Exchange Rates. With respect to royalty payments
due to Deltagen pursuant to Section 4.3.2 and/or 4.3.3, Net Sales
outside of the United States shall be first determined in the currency
in which they are earned and shall then be converted into an amount in
U.S. Dollars using the noon buying rate as published in the Wall Street
Journal for the last day of the calendar quarter for which such payment
is being determined.
4.7.3 Interest. To the extent that payments due under this
Agreement are not paid within the specified time period and are not
timely, such outstanding sums shall accrue interest from the date due,
to be computed for such unpaid amount on the last day
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
19
of each calendar quarter (accruing quarterly) at the prime rate as
published in the Wall Street Journal for the last day of the calendar
quarter plus one and a half percent (1.5%) (or the highest interest rate
permissible under applicable law, whichever is lower), compounded on an
annual basis.
4.8 Acknowledgment. Without limiting any other terms and conditions
set forth in this Agreement, the parties hereby expressly acknowledge and agree
that, provided that Lexicon has paid in full all amounts due and otherwise is
not in default of any of its obligations under this Agreement, and subject to
the applicable provisions of Article 9, nothing contained in this Agreement
shall restrict in any way whatsoever Lexicon's use and exploitation for internal
research purposes, during and after the term of this Agreement, of all results
and materials, information and data derived from its access to the DeltaBase and
use of the Knockout Mice Materials and the use of Products in accordance with
this Agreement.
4.9 Mice, Cells and Progeny. All mice, cells and their progeny
(e.g., if produced by transgenic or other back-breeding or cross-breeding, or in
the case of cells, by differentiation studies, by Lexicon of any of the Knockout
Mice Materials or their progeny or materials derived therefrom or derivatives
thereof) that are produced or otherwise derived by Lexicon and that contain in
their genome a Mutated Gene shall be subject to all of the restrictions and
provisions of this Agreement applicable to the Knockout Mice Materials obtained
directly from Deltagen, including any tissues, cells, materials or progeny
derived therefrom.
ARTICLE 5
USE OF KNOCKOUT MICE MATERIALS
5.1 Transfer to Lexicon of Frozen Sperm, Knockout Mice and ES Cell
Lines.
5.1.1 Notice and Access to Knockout Mice Materials. If during
the period that commences on the date on which Lexicon first receives a
Phenotype Set containing DeltaBase Information relating to specified
Knockout Mice Materials and ending on the [*] anniversary of the date of
such receipt, Lexicon provides written notice to Deltagen of its desire
to access and use such Knockout Mice, Deltagen shall transfer to
Lexicon, [*] of such Knockout Mice as set forth below. The use of
Knockout Mice obtained by Lexicon pursuant to this Section shall be
subject to all the terms and conditions of this Agreement.
5.1.2 Frozen Sperm. During the applicable Knockout Mice
Material Access Term for a line of Knockout Mice, Lexicon may request
frozen sperm of such line Knockout Mouse (the "Frozen Sperm") in lieu of
or in addition to live Knockout Mice in its notice pursuant to Section
5.1.1; provided, however, the parties shall negotiate, reasonably and in
good faith, the quantity, time schedule and amount to be paid for the
delivery of Frozen Sperm, which shall in any event be no less favorable
than the rates Deltagen generally makes available to its subscribers for
comparable services. Once such terms are mutually agreed, Deltagen will
send a confirming written notice to Lexicon. The use of any Frozen Sperm
maintained or obtained by Lexicon pursuant to this Section shall be
subject to all the terms and conditions of this Agreement.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
20
5.1.3 ES Cell Lines. If during the applicable Knockout Mice
Material Access Term for an ES Cell Line, Lexicon provides written
notice to Deltagen of its desire to access and use such ES Cell Line,
Deltagen shall transfer to Lexicon a vial containing not less than [*]
and up to [*] cells from such ES Cell Line within [*] days after
receiving such notice from Lexicon. The use of the ES Cell lines
maintained or obtained by Lexicon pursuant to the preceding sentence
shall be subject to all the terms and conditions of this Agreement.
5.2 Use. Lexicon shall use the Knockout Mice Materials solely for
Lexicon's internal research purposes for the sole benefit of Lexicon (and for
the benefit of its Corporate Partners, to the extent expressly permitted herein)
in accordance with all the terms and conditions of this Agreement.
5.3 Transfer Fees.
5.3.1 In partial consideration of Deltagen's resources and
efforts expended in connection with the transfer to Lexicon of the
Frozen Sperm, Knockout Mice or ES Cell Lines under Section 5.1 above,
Lexicon shall pay to Deltagen the following amounts at the times set
forth herein:
For Lexicon's access to a line of If Lexicon provides
Knockout Mice and the corresponding notice to Deltagen under
ES Cell Line Section 5.1.1 within [*]
months of Deltagen's
delivery to Lexicon of a
Phenotype Set
corresponding to the
line of Knockout Mice or
ES Cell Line requested,
a fee of [*] ($[*])
dollars shall be due and
payable within [*] days
after receipt of
Deltagen's invoice for
such materials. If
notice is received after
[*] months and prior to
[*] months after
delivery of such
Phenotype Set, a fee of
[*] dollars ($[*]) shall
be due and payable
within [*] days after
receipt of Deltagen's
invoice for such
materials. Invoices
shall be sent upon
shipment to Lexicon of
the requested Knockout
Mice or ES Cell Line.
For Lexicon's access to Frozen Sperm As mutually agreed pursuant to
for a requested line of Knockout Mice Section 5.1.2
pursuant to Section 5.1.2
5.3.2 Non-Creditable and Non-Refundable. Payments made
pursuant to this Section 5.3 are non-creditable and are non-refundable,
and are in addition to any
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
21
applicable payment due to Deltagen under Section 4.2, notwithstanding
that such payments may relate to the same Target Gene, Knockout Mouse
and/or Product.
5.4 Certain Restrictions. The transfer of the Knockout Mice
Materials to Lexicon is made expressly subject to the following terms and
conditions:
5.4.1 Lexicon Control. Except as expressly allowed by this
Agreement, all Knockout Mice Materials and their progeny and materials,
data and information derived therefrom shall remain in the sole control
of Lexicon and Lexicon shall not (and shall not attempt or purport to)
transfer such Knockout Mice Materials or progeny or materials, data and
information derived therefrom to any Third Party except to Contract
Parties and, as expressly permitted herein with respect to Derivative
Works, to Corporate Partners.
5.4.2 No Reverse Engineering. Lexicon shall not, directly or
indirectly, use or attempt to use the Knockout Mice Materials, or any
materials, information or data derived therefrom or from DeltaBase to
reverse-engineer or perform any genetic manipulation on the Knockout
Mice Materials other than by way of natural breeding. For the avoidance
of doubt, Lexicon shall have the right to conduct differentiation
studies on the ES Cell Lines.
5.4.3 No Assignment or Sale. Lexicon shall not (and shall not
attempt or purport to) assign, sell, have sold, lease, offer to sell or
lease, distribute, license, sublicense or otherwise transfer title or
interest in or to the Knockout Mice Materials and/or their progeny.
ARTICLE 6
CONFIDENTIALITY
6.1 Confidential Information. During the Subscription Term, and for
a period of [*] years following the expiration or earlier termination thereof,
each party shall maintain in confidence all Confidential Information disclosed
by the other party, and shall not use, disclose or grant the use of the
Confidential Information except on a need-to-know basis to those directors,
officers, employees, consultants, clinical investigators, contractors, agents,
distributors, Corporate Partners or permitted assignees, to the extent such
disclosure is reasonably necessary in connection with such party's activities as
expressly authorized by this Agreement. To the extent that disclosure is
authorized by this Agreement, then prior to such authorized disclosure, each
party hereto shall obtain agreement of any such Person to hold in confidence and
not make use of the Confidential Information for any purpose other than those
permitted by this Agreement. Each party shall notify the other promptly upon
discovery of any unauthorized use or disclosure of the other party's
Confidential Information.
6.2 Terms of this Agreement. Except as otherwise provided in Section
6.1 above, neither party shall disclose any terms or conditions of this
Agreement to any Third Party without the prior written consent of the other
party. Notwithstanding the foregoing, prior to execution of this Agreement, the
parties shall agree upon the substance of information that can be used to
describe the terms of this transaction, and each party may disclose such
information, as modified by mutual agreement from time to time, without the
other party's consent.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
22
6.3 Permitted Disclosures. The confidentiality obligations contained
in this Article 6 shall not apply to: (a) the extent that the receiving party
(the "Recipient") is required (a) to disclose information by law, order or
regulation of a governmental agency or a court of competent jurisdiction, or (b)
to disclose information to any governmental agency for purposes of obtaining
approval to test or market a Product, provided in either case that the Recipient
shall provide written notice thereof to the other party and sufficient
opportunity to object to any such disclosure or to request confidential
treatment thereof. Promptly upon their execution of this Agreement, the parties
will issue the joint press release in the form attached as Exhibit F. Otherwise,
neither party shall make any public announcement concerning this Agreement or
the subject matter hereof, except as required by applicable law or regulation,
without first submitting a copy of the proposed announcement to the other party
for review and obtaining their consent thereto (such consent not to be
unreasonably withheld or delayed).
6.4 Publication. Lexicon may publish or present data and/or results
generated by Lexicon or its Corporate Partners utilizing Deltagen Proprietary
Information and/or Knockout Mice Materials, subject to the prior review of the
proposed disclosure by Deltagen solely to determine (i) whether the proposed
disclosure contains Confidential Information of Deltagen or (ii) whether
information contained in the proposed disclosure should be the subject of a
patent application to be filed by Deltagen prior to such disclosure. Lexicon
shall provide Deltagen with the opportunity to review any proposed abstract,
manuscript or presentation which discloses the results of research conducted
utilizing the Deltagen Proprietary Information and/or Knockout Mice Materials by
delivering a copy thereof to Deltagen no less than [*] days before its intended
submission for publication or presentation. Deltagen shall have [*] days from
its receipt of any such abstract, manuscript or presentation in which to notify
Lexicon 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 of Deltagen. In the event Deltagen objects to
the disclosure, Lexicon agrees not to submit the publication or abstract or make
the presentation containing the objected-to information until Deltagen 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 Deltagen
believes is patentable (subject, in all events, to Section 10.1) or, in the case
of Confidential Information, to allow Lexicon to delete any Confidential
Information of Deltagen from the proposed disclosure. Lexicon agrees to delete
from the proposed disclosure any Confidential Information of Deltagen upon
request.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnity.
7.1.1 Deltagen Indemnity. Lexicon shall indemnify and hold
Deltagen and its Affiliates and each of their agents, directors,
officers, employees, consultants harmless, from and against all losses,
liabilities, damages and expenses (including reasonable attorneys' fees
and costs) resulting from all claims, demands, actions and other
proceedings by any Third Party to the extent arising from (a) a material
breach of any representation, warranty or covenant of Lexicon under this
Agreement, (b) the use of the DeltaBase, Knockout Mice Materials, or any
tissues, cells, materials or progeny or other
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
23
animals, materials, information or data derived therefrom by or for
Lexicon, (c) the development, manufacture, possession, distribution,
use, testing, sale or other disposition of any Product (without regard
to culpable conduct), or (d) the gross negligence or willful misconduct
of Lexicon in the performance of its obligations, and its permitted
activities, under this Agreement.
7.1.2 Lexicon Indemnity. Deltagen shall indemnify and hold
Lexicon and its Affiliates and each of their agents, directors,
officers, employees, consultants harmless, from and against all losses,
liabilities, damages and expenses (including reasonable attorneys' fees
and costs) resulting from all claims, demands, actions and other
proceedings by any Third Party to the extent arising from (a) a material
breach of any representation, warranty or covenant of Deltagen under
this Agreement, or (b) the gross negligence or willful misconduct of
Deltagen in the performance of its obligations to be performed under
this Agreement.
7.2 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 7 shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification. The Indemnitor shall have the
right to participate in, and to the extent the Indemnitor so desires jointly
with any other indemnitor similarly notified, to assume the defense thereof with
counsel selected by the Indemnitor; provided, however, that the Indemnitee shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the Indemnitor, if representation of the Indemnitee by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other party represented by such counsel
in such proceedings. The indemnity obligations under this Article 7 shall not
apply to amounts paid in settlement of any claim, demand, action or other
proceeding if such settlement is effected without the prior express written
consent of the Indernnitor, which consent shall not be unreasonably withheld or
delayed. The failure to deliver notice to the Indemnitor within a reasonable
time after notice of any such claim or demand, or the commencement of any such
action or other proceeding, if prejudicial to its ability to defend such claim,
demand, action or other proceeding, shall relieve such Indemnitor of any
liability to the Indemnitee under this Article 7 with respect thereto, but the
omission so to deliver notice to the Indemnitor shall not relieve it of any
liability that it may have to the Indernnitee otherwise than under this Article
7. The Indemnitor may not settle or otherwise consent to an adverse judgment in
any such claim, demand, action or other proceeding, that diminishes the rights
or interests of the Indemnitee without the prior express written consent of the
Indemnitee, which consent shall not be unreasonably withheld or delayed. The
Indemnitee, its employees and agents, shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigation of any claim,
demand, action or other proceeding covered by this Article 7.
7.3 Insurance. Each party shall maintain with a reputable insurance
company such comprehensive general liability insurance coverage with respect to
their respective obligations and liabilities under this Agreement as it
determines reasonable and appropriate for its respective business and
activities.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
24
ARTICLE 8
TERMINATION
8.1 Term. The term of this Agreement shall commence on the Effective
Date and shall expire, unless terminated earlier pursuant to this Article 8, and
the licenses granted by Deltagen to Lexicon hereunder shall become fully paid,
upon the later of (i) [*] years from the Effective Date or (ii) the expiration
or earlier termination of the last-to-expire Valid Claim licensed hereunder.
This Agreement in so far as it relates to Deltagen's obligations to supply to
Lexicon Knockout Mice Materials, shall expire on the expiry of the relevant
Knockout Mice Access Term.
8.2 Termination for Cause. Subject to Sections 8.4 and 8.5, upon the
material breach or default under this Agreement, the Settlement Agreement or the
Sublicense Agreement by a party, the party not in default shall have the right
to terminate this Agreement, effective on [*] days' written notice, unless the
breaching party shall have cured such material breach or default prior to the
expiration of such [*] day period.
8.3 Effect of Expiration and Termination.
8.3.1 Termination or expiration of this Agreement shall not
relieve either party hereto from any obligation to make payment or other
liability accruing prior to such termination or expiration, nor preclude
either party from pursuing any rights and remedies it may have hereunder
in law or equity which accrued or are based upon any event occurring
prior to such termination or expiration.
8.3.2 Upon termination of this Agreement by Deltagen pursuant
to Section 8.2, (a) all rights and licenses granted by Deltagen to
Lexicon pursuant to Sections 4.1 and 4.2 shall immediately and
automatically terminate with respect to any Deltagen Proprietary
Information, Knockout Mice Materials (and any tissues, cells, materials
or progeny derived therefrom) or Products to which the breach or default
giving rise to such termination directly relate; and (b) Lexicon shall
(i) immediately discontinue all access to and use of the DeltaBase; (ii)
purge or destroy the DeltaBase from all computers (and other systems)
within its possession or control; (iii) return to Deltagen or destroy
any Deltagen Proprietary Information or Knockout Mice Materials (and any
tissues, cells, materials or progeny derived therefrom) to which the
breach or default giving rise to such termination directly relates; and
(iv) provide an express written certification by a authorized
responsible officer of Lexicon that items (i) through (iii) above have
been fully complied with within thirty (30) days after the date of such
termination. Notwithstanding such termination, the rights and licenses
granted by Deltagen to Lexicon pursuant to Section 4.1 and 4.2 will
continue on the terms and conditions set forth in this Agreement
(including those regarding payment of milestone payments and royalties)
with respect to all Deltagen Proprietary Information, Knockout Mice
Materials (and any tissues, cells, materials or progeny derived
therefrom) and Products other than the Deltagen Proprietary Information,
Knockout Mice Materials (and any tissues, cells, materials or progeny
derived therefrom) or Products to which the breach or default giving
rise to such termination directly relate, provided that Lexicon's rights
with respect to
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
25
DeltaBase and Knockout Mice Materials shall be limited to DeltaBase and
Knockout Mice Materials received by Lexicon through the date of such
termination.
8.3.3 Upon any termination by Lexicon pursuant to Section 8.2,
all rights and licenses granted by Deltagen to Lexicon pursuant to
Section 4.1 and 4.2 will continue on the terms and conditions set forth
in this Agreement (including those regarding payment of milestone
payments and royalties), provided that Lexicon's rights with respect to
DeltaBase and Knockout Mice Materials shall be limited to DeltaBase and
Knockout Mice Materials received by Lexicon through the date of such
termination.
8.4 Controversies and Claims. If any controversy or claim should
arise under this Agreement, the party claiming the controversy shall promptly
notify the other party and the matter shall be referred to an individual
designated by the Chief Executive Officer (or the equivalent position) of
Lexicon and an individual designated by the Chief Executive Officer (or the
equivalent position) of Deltagen (the "Representatives"), who will attempt in
good faith to resolve such controversy or claim promptly by a meeting and
negotiations after receipt of notice of such controversy or claim by the other
party. If the matter has not been resolved within [*] days of the first meeting
of the Representatives (which period may be extended by mutual agreement)
concerning such matter, such matter shall be resolved by binding arbitration in
accordance with Section 8.3.
8.5 Arbitration. Any and all claims, disputes or controversies
arising under, out of, or in connection with this Agreement that are not
resolved by the parties under Section 8.4 shall be resolved by final and binding
arbitration in [*] under the Commercial Arbitration Rules of the American
Arbitration Association as then in effect. The arbitrators shall have no power
to add to, subtract from or modify any of the terms or conditions of this
Agreement or to award punitive damages. Any award rendered in such arbitration
may be enforced by either party in any court of competent jurisdiction.
8.6 No Waiver. Notwithstanding the foregoing, nothing in this
Section shall be construed to waive any rights or timely performance of any
obligations existing under this Agreement.
8.7 Survival. The provisions of Articles 1, 4, 6, 7, 8, 9, and 11
and Sections 2.6, 2.7, 2.8, 3.3, 3.4, 5.2, 5.4, 10.1, 10.4 and 10.5, and to the
extent applicable, all provisions regarding payment due hereunder shall survive
any expiration or termination of this Agreement. In addition, except as and to
the extent provided in Section 8.3.2 or the other provisions of this Article 8,
the rights and licenses granted by Deltagen to Lexicon under Sections 4.1 and
4.2, and the provisions of Sections 10.2 and 10.3, shall survive any expiration
or termination of this Agreement, provided that Lexicon complies with the terms
and conditions set forth in this Agreement (including those regarding payment of
milestone payments and royalties) with respect thereto.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
26
ARTICLE 9
MISCELLANEOUS
9.1 Compliance with Law. Lexicon shall be responsible for compliance
with all applicable product safety, product testing, product labeling, package
marking, and product advertising and all other laws and regulations with respect
to its activities and obligations hereunder and with respect to its own products
(including Products). Further, Lexicon shall comply with the laws and
regulations of the United States and any other relevant nation concerning any
export or transfer of technology, services or products.
9.2 Notices. Any consent, notice or report required or permitted to
be given or made under this Agreement by one of the parties to the other shall
be in writing and shall be delivered in person or by DHL or Federal Express (or
other courier service requiring signature upon receipt), or sent by first class
mail, postage prepaid and 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.
Notices shall be effective upon receipt by the addressee.
If to Deltagen: Deltagen, Inc.
000 Xxx Xxxx
Xxxxxxx Xxxx, XX 00000-0000
X.X.X.
Attention: President
With a copy to: General Counsel, at the same address
If to Lexicon: Lexicon Genetics Incorporated
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX. 00000
Attention: President
With a copy to: General Counsel, at the same address
9.3 Assignment. Except as otherwise expressly provided under this
Agreement, neither this Agreement nor any right or obligation hereunder may be
assigned or otherwise transferred (whether voluntarily, by operation of law or
otherwise), without the prior express written consent of the other party;
provided, however, that either party may assign this Agreement and its rights
and obligations hereunder in connection with the transfer or sale of all or
substantially all of its business, or in the event of its merger, consolidation,
change in control or similar transaction. Any permitted assignee or successor
shall assume all obligations of its assignor under this Agreement. Any purported
assignment or transfer in violation of this Section 93 shall be void.
9.4 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law principles thereof.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
27
9.5 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof. All
express or implied representations, agreements and understandings, either oral
or written, heretofore made are expressly superseded by this Agreement. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both parties.
9.6 Headings; Interpretation. 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. In this Agreement, the singular shall include the plural and vice versa
and the word "including" shall be deemed to be followed by the phrase "without
limitation."
9.7 Independent Contractors. Each party hereby acknowledges that the
parties shall be independent contractors and that the relationship between the
parties shall not constitute a partnership, joint venture or agency. Neither
party 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 party, without the prior consent of the other party to do so.
9.8 Waiver. The waiver by a party of any right hereunder, or of any
failure to perform or breach by the other party hereunder, shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by the
other party hereunder whether of a similar nature or otherwise.
9.9 Force Majeure. A party shall neither 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
obligation under this Agreement (other than an obligation for the payment of
money) to the extent, and for so long as, such failure or delay is caused by or
results from causes beyond the reasonable control of such party including but
not limited to fire, floods, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotion, strikes, lockouts or
other labor disturbances, acts of God or acts, omissions or delays in acting by
any governmental authority or the other party.
9.10 Other Activities. Except as otherwise expressly provided in this
Agreement, nothing in this Agreement shall preclude either party from conducting
other programs (either for its own benefit or with or for the benefit of any
other Person) to conduct research, or to develop or commercialize products or
services, for use in any field.
9.11 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR
EXEMPLARY DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS,
SAVINGS OR REVENUE, OR THE CLAIMS OF THIRD PARTIES, WHETHER OR NOT ADVISED OF
THE POSSIBILITY OF SUCH LIABILITY OR LOSS, HOWSOEVER CAUSED, AND ON ANY THEORY
OF LIABILITY, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT.
9.12 Joint and Several Liability. Lexicon and its Affiliates shall be
jointly and severally liable for all of their respective obligations and
liabilities under this Agreement.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
28
9.13 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.
ARTICLE 10
INTELLECTUAL PROPERTY
10.1 Ownership of Intellectual Property Rights.
10.1.1 Certain Deltagen Retained Rights; and Deltagen
Derivative Works. With the exception of the rights and licenses granted
to Lexicon pursuant to Section 4.1, and subject to Section 10.1.2,
Deltagen shall solely own and retain all rights, title and interests and
all intellectual property and intellectual property rights in and to
Deltagen Patent Rights, DeltaBase, Knockout Mice Materials, together
with all Derivative Works thereof and all results, modifications and
inventions thereto or arising therefrom made or derived by or on behalf
of Deltagen.
10.1.2 Lexicon Derivative Works. Subject to the prior rights of
Deltagen under Section 10.1.1 and any of Deltagen's other intellectual
property and intellectual property rights (including any rights it may
have in Derivative Works as noted in Section 10.1.4), Lexicon shall
solely own and retain all right, title and interests in and to any
Derivative Works and all results, modifications and inventions made by
or on behalf of Lexicon arising from its access to the Deltagen
Proprietary Information and/or research using any Knockout Mice
Materials in accordance with this Agreement, including, without
limitation, any genes not included in any Deltagen Proprietary
Information provided hereunder and any Products that may arise from such
research.
10.1.3 Joint Derivative Works. Subject to the prior rights of
Deltagen under Section 10.1.1 and any of Deltagen's other intellectual
property and intellectual property rights (including any rights it may
have in Derivative Works as noted in Section 10.1.4), the parties shall
jointly own any Derivative Works and results, inventions and
modifications that (a) are co-invented (in the case of patentable
subject matter), jointly or co-authored (in the case of copyrightable
material) and/or jointly or co-developed/created (in the case of trade
secrets), in each case as determined under applicable law, and (b) arise
from Lexicon's access to and use of the Deltagen Proprietary Information
and/or research using Knockout Mice Materials.
10.1.4 Rights in Underlying Work. Lexicon's sole or joint
ownership rights in any Derivative Works and results, modifications and
inventions described in Sections 10.1.2 or 10.1.3 shall not affect
Deltagen's or a third party's ownership of and prior rights in the
underlying work from or on which such Derivative Work or results,
modifications and inventions is derived.
10.2 Infringements. In the event that Lexicon becomes aware of a
product or activity which it believes to infringe a Valid Claim of the Deltagen
Patent Rights, it shall not have any duty of investigation but shall promptly
advise Deltagen of all relevant facts and circumstances known to it in
connection with such infringement. Deltagen shall (subject to any Third Party
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
29
obligations with respect to confidentiality) keep Lexicon reasonably informed
during the Subscription Term (and while any licenses granted pursuant to Section
4.1 remain in effect) of (a) any arbitration, mediation and/or litigation that
has actually been commenced against Deltagen, and (b) all infringements, claims,
judgments or settlements against or owed by Deltagen, or any claims or
arbitration, mediation and/or litigation threatened in writing or pending, known
to Deltagen, in each case that Deltagen believes, in good faith, may materially
affect the rights and licenses granted Lexicon by this Agreement.
10.3 Patent Prosecution. Deltagen shall at its sole discretion and
expense, have the sole right (but not the obligation) to prosecute, maintain,
abandon and enforce any and all of the Deltagen Patent Rights as and to the
extent solely Deltagen determines appropriate. Upon reasonable request, Deltagen
shall advise Lexicon of the status or issuance of a Valid Claim where Lexicon
would reasonably be required to be notified of such status or issuance to
determine its royalty payment obligations to Deltagen hereunder.
10.4 Non-Blocking Rights. Lexicon shall not assert or enforce against
Deltagen, its Affiliates, and/or any Reciprocal Rightsgivers (as defined below)
any claims of an issued patent arising from the use by Lexicon of (a) any
Knockout Mice Materials provided to Lexicon hereunder (and/or any tissues,
cells, or materials or progeny derived therefrom), or (b) DeltaBase Information,
to the extent, but only to the extent, any such assertion or enforcement would,
absent a license from Lexicon, prevent Deltagen, its Affiliates and/or
Reciprocal Rightsgivers from using, for research purposes only (including,
without limitation, research directed toward the discovery, identification,
selection, or characterization of human therapeutic and diagnostic products)
such Knockout Mice Materials (and/or any tissues, cells., materials or progeny
derived therefrom) or DeltaBase Information. "Reciprocal Rightsgiver" shall mean
a Third Party subscriber to all or any part of DeltaBase which has agreed, in
writing, to terms and conditions concerning the subject matter of this Section
10.4 that are at least as advantageous to Lexicon as the terms and conditions
under this Section 10.4 are to such Third Party; provided, however, that unless
a Third Party subscriber to all or any part of DeltaBase is already a Reciprocal
Rightsgiver at the time the very first patent application covering the issued
patent in question is published in any country or jurisdiction, such Third Party
licensee shall not have any rights under this Section 10.4 with respect to such
issued patent.
10.5 No Implied Licenses. Notwithstanding anything to the contrary in
this Agreement, (a) Deltagen retains all of its right, title and interest in and
to the Deltagen Patent Rights, the Deltagen Proprietary Information, the
Excluded Patent Rights, the Knockout Mice Materials and all other intellectual
property rights of Deltagen, (b) the grants or licenses of rights to Lexicon
shall be limited to those expressly set forth in this Agreement, and (c) no
grants or licenses of rights to Lexicon or any Third Party shall be implied.
Lexicon hereby acknowledges and agrees that it may have to obtain licenses from
other Persons in connection with Lexicon's exercise of its rights and licenses
granted under Section 4.1 (including, if Lexicon's activities are outside of the
scope of the license granted under Section 4.1, from Deltagen) and that it is
solely liable and responsible for obtaining (or for the failure to obtain) any
such license, including in connection with the use of the Knockout Mice
Materials and development and commercialization of any Products.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
30
ARTICLE 11
WITHHOLDING TAX
11.1 Payment Without Deduction. All payments due under this Agreement
will be made in full without deduction for or on account of any present or
future taxes or duties of whatever nature that may be imposed, except as
provided in Section 11.2.
11.2 Withholding Taxes. Lexicon may deduct withholding taxes from
amounts otherwise due hereunder if and as compelled by applicable law and shall
remit the amount withheld to the appropriate taxing authorities on Deltagen's
behalf and the remainder to Deltagen. Lexicon will provide Deltagen, with a
written receipt or a tax deduction certificate
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
from the tax authority for all taxes so withheld. Lexicon will cooperate with
Deltagen in obtaining exemption from such withholding and in minimizing or
avoiding any such tax withholding requirement, as available under applicable
law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
DELTAGEN, INC.
By:
----------------------------------------
Title:
-------------------------------------
LEXICON GENETICS INCORPORATED
By:
----------------------------------------
Title:
-------------------------------------
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
EXHIBIT A
Deltabase Access Plan
1. General Access
a. At a time and date mutually acceptable to Deltagen and Lexicon
(but in no event more than [*] days following the Effective
Date), Deltagen shall provide Lexicon with on-line access to
DeltaBase.
b. Lexicon shall designate one or more public Internet protocol
(IP) addresses from which Lexicon shall access DeltaBase.
Lexicon shall provide evidence of registered ownership of the
provided IP addresses either directly or via an Internet service
provider (ISP) that is providing public IP addresses for
Lexicon.
c. Lexicon shall access DeltaBase through one or more servers in
secure locations at the Principal Site; provided, however,
Lexicon shall be entitled to access DeltaBase remotely from
computers which are part of a Lexicon intranet system.
d. Lexicon shall be required to obtain at the Primary Site, the
hardware and software (and software licenses) set forth in the
Required Configuration on Exhibit B.
e. DeltaBase may only be accessed, viewed, used or disclosed
according to the terms and conditions of this Agreement.
2. DeltaBase Access-Time and Performance
a. The DeltaBase access-time and performance will vary depending on
the following many factors, included but not limited to the
following:
i. The number of simultaneous users;
ii. The nature and complexity of the requests to DeltaBase
(e.g., some requests require more computer processing
than others);
iii. The rate at which users are malting queries to
DeltaBase; and
iv. Lexicon's Internet access speed.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
EXHIBIT B
Required Third Party Software and Hardware
DeltaBase may be accessed from the hardware and software configuration described
under Client Requirements below.
CLIENT REQUIREMENTS:
[*]
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
EXHIBIT C
Training and Support Plan
The following information in this Section 1 applies to Deltagen's support and
training for DeltaBase at the Primary Site.
With respect to support of DeltaBase at the Primary Site:
Lexicon is responsible for obtaining and providing all equipment,
hardware and software set forth in the Required Configuration under Exhibit B
above.
Deltagen shall designate one contact person at Deltagen to be the
primary contact for interfacing and assisting Lexicon on issues with respect to
DeltaBase and its operation and Lexicon's contact personnel (below) shall
communicate DeltaBase comments, requests and questions to the Deltagen contact
person. Such Deltagen contact person shall be the primary Deltagen interface for
DeltaBase support.
Lexicon shall designate one person as the technical point of contact to
assist and interface with Deltagen regarding access, technical computer issues
and support. Lexicon shall designate one person as the scientific point of
contact to assist and interface with Deltagen on scientific support issues. Such
technical and scientific contacts shall be the primary contacts and shall
interface with Deltagen with respect to the operation of DeltaBase. Lexicon
shall provide Deltagen with the names of such contacts and shall promptly notify
Deltagen of any changes with respect to such contacts.
The use of DeltaBase may require the modification, upgrading or
revisions of various system level components (e.g., manufacturer provided
upgrades and patches to Windows NT, etc.). Lexicon shall be responsible for
obtaining any required software licenses thereto.
SUPPORT
In the event that DeltaBase fails to perform according to specifications
due to the fault of Deltagen (but excluding any failure of the DeltaBase
Information to conform to the DeltaBase Deliverables), Lexicon shall
promptly notify the Deltagen contact person, providing a reasonably
detailed description of the problem and Deltagen shall promptly
acknowledge receipt of the report of the problem to the Lexicon contact
person. Deltagen shall duplicate and locate such problem and Deltagen
will use its commercially reasonable efforts to correct the problem
after notification by Lexicon. During the Subscription Term, Deltagen
will provide Lexicon up to [*] hours per week per year of DeltaBase
support assistance by telephone with Deltagen's designated contact
person for DeltaBase (or other party designated by Deltagen) during
Deltagen's normal business hours.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
TRAINING
Deltagen will provide [*] days of on-site training by two Deltagen
employees at the Primary Site in the use and operation of DeltaBase.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
2
EXHIBIT D
Deltabase Deliverables
DeltaBase Overview
The information set forth below in this Exhibit D shall govern the DeltaBase
Deliverables under the Collaboration Agreement. This Exhibit may be amended,
from time to time, as agreed to by other third party subscribers to DeltaBase.
Deltagen reserves the right to modify DeltaBase and the DeltaBase Deliverables
anytime without prior notice.
[*]
VETERINARY HEALTH CERTIFICATE
Each shipment of mice shall be accompanied by a Veterinary Health Certificate
stating that.
. The mice are free, to the best of Deltagen's knowledge, of any
pathogen hazardous to human health including LCMV and Hantavirus
. The mice show no clinical signs of infection or contagious
disease on examination and are fit for travel
. Health quality assurance programs include: Vendor screening,
Quarantine, Rederivation and off-site quarantine of mice from
non-vendor sources, Environmental Monitoring and Sentinel
Program (which consists of transferring dirty bedding from each
cage within a section to a sentinel cage)
. A serum sample from mice within each sentinel cage is collected
monthly and submitted to UM XXXXX for comprehensive serology
(information on the specific diagnostic profiles can be obtained
at xxx.xxxxx.xxxxxxxx.xxx)
. Every six months sentinels are submitted to UM XXXXX for a
Comprehensive Plus Profile
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
EXHIBIT E
Agreed Form of Press Release
The parties agree that a suitable and mutually agreed upon form of written press
release shall be issued by Deltagen or Lexicon as soon as possible after
execution of this Collaboration Agreement.
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
