1
CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10.10
DATABASE ACCESS AGREEMENT
THIS DATABASE ACCESS AGREEMENT (the "Agreement") is entered into as of
the Effective Date, as defined below, by and between LEXICON GENETICS
INCORPORATED, a Delaware corporation ("Lexicon"), and MILLENNIUM
PHARMACEUTICALS, INC., a Delaware corporation ("MPI").
RECITALS
WHEREAS, Lexicon wishes to grant to MPI, and MPI wishes to obtain from
Lexicon, non-exclusive access to Lexicon's proprietary Human Gene Trap(TM) and
OmniBank(R) Databases for the discovery, development and commercialization of
(i) Small Molecule Drugs and Antibody Drugs addressing human Drug Targets, (ii)
Therapeutic Proteins, (iii) Antisense Drugs, (iv) Gene Therapy Drugs, and (v)
Diagnostic Products, on the terms and subject to the conditions set forth
herein; and
WHEREAS, Lexicon wishes to grant to MPI, and MPI wishes to obtain from
Lexicon, the right to receive certain rights and licenses under the Lexicon
Technology, on the terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "ACADEMIC COLLABORATOR" means any Third Party which is a university,
research institute or other non-profit organization which (a) has
entered into an agreement with MPI or any of its Affiliates involving
collaborative research with MPI and/or such Affiliate(s) in which MPI
and/or such Affiliate(s) reasonably believes that Material Use of a
specified Program Clone may have application, and (b) if MPI or an
Affiliate has transferred any Program Clone to such Third Party, has
entered into a material transfer agreement with MPI or such Affiliate
with respect to such Program Clone or has otherwise entered into an
agreement with MPI or such Affiliate limiting the Third Party's use of
the Program Clone to the purposes permitted herein.
1.2 "ACCESS PERIOD" means the Initial Access Period and, if applicable, the
Extended Access Period and any extensions thereto on terms mutually
acceptable to the parties.
1.3 "AFFILIATE" means any corporation or other entity (e.g. a company,
partnership or joint venture) which controls, is controlled by, or is
under common control with Lexicon or
-------------------
*****denotes confidential information with respect to which a separate
confidential treatment request has been filed with the Securities and
Exchange Commission.
2
CONFIDENTIAL - 9/23/99
MPI. A corporation or other entity will be regarded as in control of
another corporation or entity if it owns or directly or indirectly
controls more than 50% of the voting securities or other ownership
interest of the other corporation or entity, or if it possesses,
directly or indirectly, the power to direct or cause the direction of
the management and policies of the corporation or other entity.
1.4 "ANTIBODY DRUG" means any Drug which contains an antibody, whether
monoclonal or polyclonal, multiple or single chain, whole or fragment,
including any molecule consisting of the Fc portion of an antibody
fused with another polypeptide moiety(ies).
1.5 "ANTISENSE DRUG" means any Drug which contains nucleic acid or a
functional analog, derivative or homolog thereof, which is
complementary to a segment of DNA of a gene or such gene's cognate RNA,
and which, upon delivery by any means, alters the transcription,
processing, elaboration, RNA expression or protein production of or by
such gene.
1.6 "CONFIDENTIAL INFORMATION" means any confidential or proprietary
information of a party, including, without limitation, information
relating to the Lexicon Technology, the Human Gene Trap(TM) and
OmniBank(R) Databases or any Program Clone, and any information
relating to any compound, research project, work in process, future
development, scientific, engineering, manufacturing, marketing,
business plan, financial or personnel matter relating to such party,
its present or future products, sales, suppliers, customers, employees,
investors or business, whether in oral, written, graphic or electronic
form. Notwithstanding the foregoing, Confidential Information will not
include any information which:
(a) is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party,
generally known or available;
(b) is known by the receiving party at the time of
receiving such information, as demonstrated by
competent written or electronic evidence;
(c) is hereafter furnished to the receiving party by a
Third Party, as a matter of right and without
restriction on disclosure;
(d) is independently developed by the receiving party
without the use of the Confidential Information of
the disclosing party as demonstrated by competent
written or electronic records; or
(e) is the subject of a written or electronic permission
to disclose provided by the disclosing party.
Notwithstanding the above, coding sequence from a gene shall not be
deemed to come under the foregoing exceptions unless it is Established Exon
Sequence.
2
3
CONFIDENTIAL - 9/23/99
1.7 "CORPORATE PARTNER" means any Third Party which (a) has entered into an
agreement with MPI or any of its Affiliates involving the grant to such
Third Party of rights for the development or commercialization of
products for which MPI or such Affiliate reasonably believes that
Material Use of a specified Program Clone may have application, and (b)
if MPI or an Affiliate has transferred any Program Clone to such Third
Party, has entered into a material transfer agreement with MPI or such
Affiliate with respect to such Program Clone or has otherwise entered
into an agreement with MPI or such Affiliate limiting the Third Party's
use of the Program Clone to the purposes permitted herein.
1.8 "DIAGNOSTIC VALIDATION STUDIES" means for the development of a
Diagnostic Product, human clinical validation studies the purpose of
which is to establish a significant correlation between the presence or
abundance of one or more genes, RNA transcripts, proteins, or any part
thereof, and either (a) the cause, history, stage, progression or
prognosis of a disease or (b) an actual or likely response to a drug.
1.9 "DIAGNOSTIC PRODUCT" means any product or service which (a) uses, is
based on or incorporates a Lexicon Sequence (for purposes of which, a
product or service shall be deemed to be based on a Lexicon Sequence if
it measures the presence or activity of any gene represented by such
Lexicon Sequences, any mutant or polymorphic form of such gene, any
transcription product of such gene, or modified form thereof resulting
from post-transcriptional processing, and/or any translation product of
such gene, or modified form thereof resulting from post-translational
processing) and (b) has utility in either (i) the diagnosis, prognosis,
monitoring, prediction or disease management of a human disease or
condition or (ii) the selection of a method of treatment of any human
disease or condition including without limitation the assessment or
prediction of responses in humans to a drug or other method of treating
a disease, including without limitation the determination of efficacy
and the side effects or toxicity of drug(s).
1.10 "DIAGNOSTIC PROGRAM" means any program directed to the discovery and
development of Diagnostic Products.
1.11 "DRUG" means any therapeutic or prophylactic drug or drug candidate
which is discovered, identified, developed, made, selected,
characterized or determined to have utility using a Lexicon Sequence
corresponding to a given gene or which is based on or incorporates a
Lexicon Sequence corresponding to a given gene.
1.12 "DRUG TARGET" means a protein, which is derived from a Lexicon Sequence
corresponding to a given gene, whose modulation may elicit a
physiological response of interest.
1.13 "EFFECTIVE DATE" means the date set forth in a written notice from MPI
to Lexicon as the date upon which this Agreement shall take effect,
provided that such date shall not be later than 15 days from the date
this Agreement is fully executed unless MPI has paid the Initial
Database Access Fee set forth in Section 5.1 on October 1, 1999, in
which case such date shall be no later than November 1, 1999.
3
4
CONFIDENTIAL - 9/23/99
1.14 "ESCROWED SEQUENCE" means any Lexicon Sequence present within a Program
Clone the name of which is deposited in escrow by MPI during the Access
Period pursuant to Sections 2.1, 2.2 or 2.19.
1.15 "ESTABLISHED EXON SEQUENCE" means *****.
1.16 "EXTENDED ACCESS PERIOD" has the meaning set forth in Section 2.19.
1.17 "FIELD" means the treatment, diagnosis, or prevention of any human
disease or condition.
1.18 "FIRST COMMERCIAL SALE" means the first sale for use or consumption by
the general public of a Licensed Product in a country after any
required marketing and pricing or pricing reimbursement approval
granted by the governing health authority of such country has been
obtained.
1.19 "GENE THERAPY DRUG" means any Drug, excluding an Antisense Drug, which
contains nucleic acid or a functional analog, derivative or homologue
thereof, and which, upon delivery by any means, expresses a gene
product encoded therein.
1.20 "HUMAN GENE TRAP(TM) DATABASE" means Lexicon's proprietary database
made available to MPI, its Affiliates and other subscribers on a
non-exclusive basis that is comprised of nucleotide sequences of human
origin derived from cDNA produced by gene trapping which has been
cloned into a phage vector and having an average length of
approximately ***** base pairs or more ("H-TSTs"), and all associated
information, as supplemented from time to time by Lexicon. For
avoidance of doubt, the Human Gene Trap(TM) Database shall not include
access to the LexGene(TM) Database but shall include any full-length
gene sequence that is included in, or may be deduced directly from, the
Human Gene Trap(TM) Database as the contiguous sequence obtained by
clustering and aligning sequences in the Human Gene Trap(TM) Database
that have overlapping regions of sequence information from the same
gene.
1.21 "HUMANIZED MOUSE PROGRAM" means Lexicon's proprietary program to
replace a mouse gene with a human gene to assess the physiological
effects on a Drug Target following the introduction of a Small Molecule
Drug or a Therapeutic Protein.
1.22 "INITIAL ACCESS PERIOD" means the period commencing on the date MPI
receives the Human Gene Trap(TM) Database and the OmniBank(R) Database
on CD ROM and ending ***** thereafter. MPI shall provide Lexicon prompt
written notice of its receipt of the date it receives the Human Gene
Trap(TM) and OmniBank(R) Database on CD ROM, which notice shall specify
the date of such receipt.
1.23 "LEXGENE(TM) DATABASE" means Lexicon's proprietary database comprised
of full-length gene sequences generated by Lexicon outside the scope of
the gene-trapping program established by Lexicon for the purpose of
creating the Human Gene Trap(TM) Database.
4
5
CONFIDENTIAL - 9/23/99
1.24 "LEXICON KNOW-HOW" means all information, data and biological materials
consisting of, or directly and solely relating to, the Human Gene
Trap(TM) and/or OmniBank(R) Databases, including without limitation any
DNA xxxxxxxx xxxx contained therein, and such other know-how of Lexicon
expressly provided by Lexicon to MPI, but excluding MPI Sequence and
MPI Know-How, all to the extent and only to the extent Lexicon has the
right to grant a license or sublicense to MPI as provided for herein
without violating the terms of any agreement or other rights of any
Third Party.
1.25 "LEXICON PATENT RIGHTS" means all rights under patents of Lexicon (i)
which claim, as a composition of matter, polynucleotide sequence
information present in, or polypeptide sequence encoded by, any Program
Clone(s), or any full-length gene sequences disclosed by Lexicon to MPI
pursuant to Section 2.20(b) or Section 4.4, and/or any contiguous DNA
sequence deduced by clustering and aligning sequences in the Human Gene
Trap(TM) Database with sequence information in the public domain, or
(ii) which arise solely from the generation of the Human Gene Trap(TM)
and/or OmniBank(R) Databases, and in either case which claim the use of
Program Clone(s) in the discovery or development of human therapeutic
or prophylactic drugs or human diagnostic products, excluding patent
claims of Lexicon covering the use of a Program Clone in the discovery
or development of human therapeutic or prophylactic drugs or human
diagnostic products based on an actual reduction to practice of a
specified function of the gene encoded by a Program Clone (e.g. through
observation of a phenotype in a mouse relating to an ortholog to such
gene), and all pending patent applications related thereto throughout
the world, together with all substitutions, extensions, supplemental
protection certificates, reissues, renewals, reexaminations,
divisionals, provisionals, continuations or continuations-in-part
thereof, in each case to the extent and only to the extent Lexicon has
the right to grant a license or sublicense to MPI as provided for
herein without violating the terms of any agreement or other rights of
any Third Party.
1.26 "LEXICON SEQUENCE" means *****.
1.27 "LEXICON TECHNOLOGY" means the Lexicon Know-How and the Lexicon Patent
Rights.
1.28 "LICENSED ANTIBODY DRUG" means any Antibody Drug (or any analog or
derivative thereof), which interacts with a Drug Target and as to which
MPI and/or its Affiliates has obtained a commercial product license
from Lexicon hereunder.
1.29 "LICENSED ANTISENSE DRUG" means any Antisense Drug (or any analog or
derivative thereof) as to which MPI and/or its Affiliates has obtained
a commercial product license from Lexicon hereunder.
1.30 "LICENSED DIAGNOSTIC PRODUCT" means any Diagnostic Product as to which
MPI and/or its Affiliates has obtained a commercial product license
from Lexicon hereunder.
1.31 "LICENSED GENE THERAPY DRUG" means any Gene Therapy Drug (or any analog
or derivative thereof) as to which MPI and/or its Affiliates has
obtained a commercial product license from Lexicon hereunder.
5
6
CONFIDENTIAL - 9/23/99
1.32 "LICENSED PRODUCT" means any Licensed Small Molecule Drug, Licensed
Antibody Drug, Licensed Therapeutic Protein, Licensed Antisense Drug,
Licensed Gene Therapy Drug or Licensed Diagnostic Product.
1.33 "LICENSED SMALL MOLECULE DRUG" means any Small Molecule Drug (or any
analog or derivative thereof) which interacts with a Drug Target, and
as to which MPI and/or its Affiliates has obtained a commercial product
license from Lexicon hereunder.
1.34 "LICENSED THERAPEUTIC PROTEIN" means any Therapeutic Protein (or any
analog or derivative thereof) as to which MPI and/or its Affiliates has
obtained a commercial product license from Lexicon hereunder.
1.35 "MAJOR MARKET COUNTRY" shall mean Canada, Japan, France, Germany,
Italy, Spain, the United Kingdom, and the United States.
1.36 "MATERIAL ACTIVITY" means any of the following: ******
1.37 "MPI KNOW-HOW" means any information, data and materials, other than
DNA sequence information, that is owned, developed, controlled and/or
obtained by MPI and/or its Affiliates that is not Confidential
Information of Lexicon.
1.38 "MATERIAL USE" means any use of a Lexicon Sequence in a Material
Activity by or on behalf of MPI and/or its Affiliates.
1.39 "MPI SEQUENCE" means *****.
1.40 "MUTANT MOUSE PROGRAM" means the program set forth on Exhibit A to this
Agreement.
1.41 "NET SALES" means with respect to a Licensed Product, the gross amount
invoiced by MPI, its Affiliates or sublicensees for sales of the
Licensed Product to a Third Party, less:
(a) trade, quantity and cash discounts actually allowed;
(b) discounts, refunds, rebates, chargebacks, retroactive price
adjustments, and any other allowances actually granted which
effectively reduce the net selling price;
(c) product returns 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); and
(e) freight, postage, shipping, customs duties, excises and
insurance charges actually allowed or paid for delivery of
Licensed Products, to the extent billed.
In the event the Licensed 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
6
7
CONFIDENTIAL - 9/23/99
fraction, A/A+B where A is the average sale price of the Licensed 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 Licensed 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 Licensed Product and D is the difference between the average selling
price of the Combination Product and the average selling price of the Licensed
Product. If the average sale price of the other active compounds or ingredients
can be determined but the average price of the Licensed 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 the applicable agreement between MPI and
a sublicensee contains the same methodology for determining the average sale
price of the active compounds or ingredients when the average sale price of the
other active compounds or ingredients cannot be determined as set forth above,
and if such sublicense agreement also contains a provision stating that the Net
Sales of the Licensed Product shall not be less than 50% of the Net Sales of the
Combination Product, then the same 50% limitation shall, as to that sublicensee
only, also apply to this Agreement.
In the event that the average sales price of both the Licensed Product
and the other active compounds or ingredients in the Combination Product cannot
be determined, the Net Sales of the Licensed Product shall be negotiated in good
faith by the parties.
The Net Sales price for a Combination Product will be calculated once
each calendar year and such price will be used during all applicable royalty
reporting periods for the entire calendar year. When determining the average
sale price of a Licensed Product or the other active compounds or ingredients in
the Combination Product, the average sale price will be calculated using data
arising from the 12 months preceding the calculation of the Net Sales price for
the Combination Product. As used above, the term "Combination Product" means any
pharmaceutical or diagnostic product comprised of the Licensed Product and other
active compounds and/or ingredients.
1.42 "NOVEL GENE" means a gene, part of whose coding sequence is present in
the Human Gene Trap(TM) Database and in one or more Program Clones, and
*****.
1.43 "OMNIBANK(R) DATABASE" means Lexicon's proprietary database comprised
of OmniBank(R) Sequence Tags and all associated information, together
with bioinformatics software to the extent additional access to the
OmniBank (R) Database is provided, at Lexicon's sole discretion, via
the Internet (and enhancements and updates related to such
bioinformatics software scanning tools), all as supplemented from time
to time by Lexicon.
7
8
CONFIDENTIAL - 9/23/99
1.44 "OMNIBANK(R) LIBRARY" means Lexicon's library of mouse embryonic stem
cells, each of which contains a gene trap event in a particular mouse
gene, which gene is identified by an OmniBank(R) Sequence Tag.
1.45 "OMNIBANK(R) MICE" means mouse embryonic stem cells contained in the
OmniBank(R) Library, mice made or developed using such mouse embryonic
stem cells and any successive generations thereof, and any progeny,
part, derivative or expression product of any such mouse embryonic stem
cells or mice.
1.46 "OMNIBANK(R) SEQUENCE TAGS" or "OSTS" means murine DNA sequences and
mouse embryonic stem cells which contain mutations in one or more genes
made using gene trap insertion techniques, which genes are identified
by a DNA sequence derived from the mutated gene.
1.47 "PHASE I" means that portion of the clinical development program which
generally provides for the first introduction into humans of a Licensed
Product with the primary purpose of determining safety, metabolism and
pharmacokinetic properties and clinical pharmacology of the Licensed
Product, as more specifically defined by the rules and regulations of
the FDA and corresponding rules and regulations in other countries or
jurisdictions.
1.48 "PHASE II" means that portion of the clinical development program after
the initial introduction of the Licensed Product into human subjects to
test for safety (adverse effects), dosage tolerance, metabolism,
distribution, excretion and pharmacodynamics, and, if applicable, after
receipt of authorization from the competent regulatory authorities to
proceed with further clinical development, and before final pivotal
trials of the drug for safety and efficacy, as more specifically
defined by the rules and regulations of the FDA and corresponding rules
and regulations in other countries or jurisdictions. Phase II studies
generally involve a limited patient population with the disease or
condition to be treated and are intended to (a) determine the efficacy
of the drug for specific, targeted indications, (b) determine dosage
tolerance and optimal dosage (dose ranging), (c) identify possible
adverse effects and safety risks, and (d) identify patient populations
and clinical endpoints for Phase III trials.
1.49 "PHASE III" means that portion of the clinical development program
which provides for the continued trials of a Licensed Product on
sufficient numbers of patients to establish the safety and efficacy of
a Licensed Product for the desired claims and indications, as more
specifically defined by the rules and regulations of the FDA and
corresponding rules and regulations in other countries or
jurisdictions.
1.50 "PRE-IND STUDIES" means formal preclinical studies under controlled
conditions, such as Good Laboratory Practice conditions, intended to
provide evidence of safety of an Antibody Drug, Antisense Drug, Gene
Therapy Drug, Small Molecule Drug or Therapeutic Protein in
applications to regulatory agencies.
8
9
CONFIDENTIAL - 9/23/99
1.51 "PROGRAM CLONE" means a clone (including DNA sequence information,
whether partial or full-length, pertaining to the clone) contained in,
identified using or derived from the Human Gene Trap(TM) and/or
OmniBank(R) Databases.
1.52 "PROTEIN" means a high molecular weight (i.e. with a mass greater than
1,000 daltons) polymer compound composed of a variety of amino acids
joined by peptide linkages, including allelic variants thereof,
post-translationally modified variants thereof (i.e. glycosylated
proteins) and derivatives thereof.
1.53 "SMALL MOLECULE DRUG" means any Drug, the active ingredient of which is
a synthetic small molecule, a natural product or a macromolecule, that
(a) is identified in a screening assay on the basis ***** through use
of a Lexicon Sequence, or (b) is designed or developed using medicinal
chemistry, structural activity relationship ("SAR") or combinatorial
chemistry techniques to interact ***** through the use of a Lexicon
Sequence; provided, however, that a Small Molecule Drug will not
include any Protein or any Drug in which the active ingredient is an
Antibody Drug, an Antisense Drug or a Gene Therapy Drug.
1.54 "S-T-V(TM)PROGRAM" means the program set forth on Exhibit B to this
Agreement.
1.55 "THERAPEUTIC PROGRAM" means any program directed to the discovery and
development of Drugs.
1.56 "THERAPEUTIC PROTEIN" means any Drug which contains a Protein and that
is not an Antibody Drug.
1.57 "THIRD PARTY" means any corporation, company, partnership, joint
venture or other entity other than Lexicon and its Affiliates and MPI
and its Affiliates.
1.58 "VALID CLAIM" means a claim of an issued or granted and unexpired
patent included within the Lexicon Patent Rights, which claim (a) has
not been held unenforceable, unpatentable or invalid by a decision of a
court or governmental body of competent jurisdiction, (b) is
unappealable or unappealed within the time allowed for appeal, (c) has
not been rendered unenforceable through disclaimer or otherwise, and
(d) has not been lost through an interference proceeding.
1.59 *****
As used herein, the phrases "using a Lexicon Sequence" and "use of a Lexicon
Sequence," and words of similar import, shall be deemed to encompass (i) the use
in a Diagnostic Program of any gene that contains a Lexicon Sequence, on which
Lexicon Sequence MPI or an Affiliate has performed a Material Activity in a
Diagnostic Program, or (ii) the use in a Therapeutic Program of any gene that
contains a Lexicon Sequence, on which Lexicon Sequence MPI or an Affiliate has
performed a Material Activity in a Therapeutic Program. For the purpose of the
foregoing sentence, the word "gene" is understood to mean the gene itself, any
mutant or polymorphic form of such gene, any transcription product of such gene
or modified form thereof resulting from
9
10
CONFIDENTIAL - 9/23/99
post-transcriptional processing, and/or any translation product of such gene or
modified form thereof resulting from post-translational processing.
ARTICLE 2
GRANT OF RIGHTS AND LICENSES
2.1 NON-EXCLUSIVE ACCESS TO HUMAN GENE TRAP(TM) DATABASE. Subject to the
terms and conditions of this Agreement and during the Access Period,
Lexicon hereby grants to MPI and its Affiliates non-exclusive access to
Lexicon's Human Gene Trap(TM) Database. MPI will deposit information in
escrow pursuant to Section 2.20 identifying each Program Clone of which
it elects to make Material Use in research and development activities
within ***** after MPI or any of its Affiliates initiates such
activities. Notwithstanding the foregoing, MPI shall not be required to
deposit in escrow *****. At its election, MPI and/or its Affiliates
***** whose representation in the Human Gene Trap(TM) Database at the
time of such deposit ***** for purposes of this Agreement. MPI and/or
its Affiliates may (either directly or via consultants), manipulate the
data in any FASTA files delivered to MPI by Lexicon.
2.2 NON-EXCLUSIVE ACCESS TO OMNIBANK(R) DATABASE. Subject to the terms and
conditions of this Agreement and during the Access Period, Lexicon
hereby grants to MPI and its Affiliates non-exclusive access to
Lexicon's OmniBank(R) Database. MPI will deposit in escrow information
pursuant to Section 2.20 identifying each Program Clone which it elects
to make Material Use in research and development activities within
***** after MPI or any of its Affiliates initiates such activities.
Notwithstanding the foregoing, MPI shall not be required to deposit in
escrow *****. At its election, MPI and/or its Affiliates ***** whose
representation in the OmniBank(R) Database at the time of such deposit
***** for purposes of this Agreement. MPI and/or its Affiliates may
(either directly or via consultants), manipulate the data in the FASTA
files Lexicon is delivering to MPI. To the extent Lexicon provides the
OmniBank(R) Database via the Internet (in addition to the CD-ROM), such
access shall be via a commercially available third party Web Browser.
2.3 RESEARCH LICENSE FOR FIELD. Subject to the terms and conditions of this
Agreement and during the Access Period and any extensions thereto,
Lexicon hereby grants to MPI and its Affiliates a non-exclusive license
under the Lexicon Technology to use Program Clones to conduct research
directed towards the discovery of potential Drugs and Diagnostic
Products in the Field. Lexicon hereby grants to MPI and its Affiliates
the limited right to grant sublicenses to Corporate Partners and
Academic Collaborators, on a Program Clone-by-Program Clone basis,
solely to accomplish the purposes of such Corporate Partner's or
Academic Collaborator's collaboration with MPI or its Affiliates.
10
11
CONFIDENTIAL - 9/23/99
2.4 DEVELOPMENT LICENSE FOR DRUG TARGETS. Subject to the terms and
conditions of this Agreement and during the Access Period, Lexicon
hereby grants to MPI and its Affiliates a non-exclusive license under
the Lexicon Technology to research, develop, make and use any escrowed
Program Clone, any Drug Target encoded by an escrowed Program Clone and
any assays which are based on or incorporate such Drug Target solely to
develop Small Molecule Drugs and/or Antibody Drugs in the Field.
Lexicon hereby grants MPI and its Affiliates the limited right to grant
sublicenses to Corporate Partners and Academic Collaborators, on a
Program Clone-by-Program Clone basis, solely to accomplish the purposes
of such Corporate Partner's or Academic Collaborator's collaboration
with MPI or its Affiliates.
2.5 DEVELOPMENT LICENSE FOR THERAPEUTIC PROTEINS. Subject to the terms and
conditions of this Agreement and during the Access Period, Lexicon
hereby grants to MPI and its Affiliates a non-exclusive license under
the Lexicon Technology to research, develop, make and use any escrowed
Program Clone and any Protein encoded by an escrowed Program Clone
solely to develop Therapeutic Proteins in the Field. Lexicon hereby
grants MPI and its Affiliates the limited right to grant sublicenses to
Corporate Partners and Academic Collaborators, on a Program
Clone-by-Program Clone basis, solely to accomplish the purposes of such
Corporate Partner's or Academic Collaborator's collaboration with MPI
or its Affiliates.
2.6 DEVELOPMENT LICENSE FOR ANTISENSE DRUGS. Subject to the terms and
conditions of this Agreement and during the Access Period, Lexicon
hereby grants to MPI and its Affiliates a non-exclusive license under
the Lexicon Technology to research, develop, make and use any escrowed
Program Clone and any RNA encoded by an escrowed Program Clone solely
to develop Antisense Drugs in the Field. Lexicon hereby grants MPI and
its Affiliates the limited right to grant sublicenses to Corporate
Partners and Academic Collaborators, on a Program Clone-by-Program
Clone basis, solely to accomplish the purposes of such Corporate
Partner's or Academic Collaborator's collaboration with MPI or its
Affiliates.
2.7 DEVELOPMENT LICENSE FOR GENE THERAPY DRUGS. Subject to the terms and
conditions of this Agreement and during the Access Period, Lexicon
hereby grants to MPI and its Affiliates a non-exclusive license under
the Lexicon Technology to research, develop, make and use any escrowed
Program Clone solely to develop Gene Therapy Drugs in the Field. MPI
and its Affiliates will have the right to grant limited sublicenses to
Corporate Partners and Academic Collaborators, on a Program
Clone-by-Program Clone basis, solely to accomplish the purposes of such
Corporate Partner's or Academic Collaborator's collaboration with MPI
or its Affiliates.
2.8 DEVELOPMENT LICENSE FOR DIAGNOSTIC PRODUCTS. Subject to the terms and
conditions of this Agreement and during the Access Period, Lexicon
hereby grants to MPI and its Affiliates a non-exclusive license under
the Lexicon Technology to research, develop, make and use any escrowed
Program Clone and any RNA or Protein encoded by an escrowed Program
Clone solely to develop Diagnostic Products in the Field. Lexicon
11
12
CONFIDENTIAL - 9/23/99
hereby grants MPI and its Affiliates the limited right to grant
sublicenses to Corporate Partners and Academic Collaborators, on a
Program Clone-by-Program Clone basis, solely to accomplish the purposes
of such Corporate Partner's or Academic Collaborator's collaboration
with MPI or its Affiliates.
2.9 EXCLUSIVE OPTIONS FOR THERAPEUTIC PROTEINS. With respect to any gene
which encode(s) a Therapeutic Protein, is partially represented by an
Escrowed Sequence or set of Escrowed Sequences, and for which MPI
and/or its Affiliates has obtained a full-length coding sequence from
any source, MPI and/or its Affiliates will have the right to obtain
from Lexicon an exclusive option (a "Therapeutic Option") to obtain an
exclusive commercial product license to such Therapeutic Protein in
accordance with Section 2.10; provided, however, that neither MPI nor
any of its Affiliates will have the right to obtain a Therapeutic
Option in the event that (a) a Third Party holds an exclusive option or
has obtained an exclusive commercial product license to such
Therapeutic Protein prior to MPI's and/or its Affiliates' request for
such Therapeutic Option, or (b) ***** prior to MPI's and/or its
Affiliates' request for a Therapeutic Option, as demonstrated by
competent written records. MPI's and/or its Affiliates' right to obtain
Therapeutic Options shall continue during the Access Period and for six
months thereafter, provided that (i) in the event that ***** (ii) MPI
and its Affiliates may have no more than ***** Therapeutic Proteins
under one or more Therapeutic Options at any time during the Access
Period (for purposes of which the termination by MPI and/or its
Affiliates of any Therapeutic Option prior to its expiration date will
be disregarded), and be granted no more than ***** Therapeutic Options
in any twelve-month period, and (iii) MPI's and/or its Affiliates'
right to obtain Therapeutic Options after the Access Period shall be
limited to ***** such Therapeutic Options. Any request for a
Therapeutic Option will be submitted to Lexicon by MPI in writing,
identifying the specific Program Clone or Program Clones that contain
the Escrowed Sequence(s) encoding the Therapeutic Protein for which the
Therapeutic Option is requested and the date of the request. Within
***** after the date Lexicon receives such request, Lexicon will
provide written notice to MPI (i) granting a Therapeutic Option, or
(ii) specifying the reason why a Therapeutic Option is not available
(limited to the reasons outlined in subsections (a) and (b) above.) In
the event that Lexicon grants such Therapeutic Option requested by MPI
and/or its Affiliates, MPI and/or its Affiliates shall ***** MPI and/or
its Affiliates may exercise a Therapeutic Option, in its discretion, at
any time during the period commencing on the date such Therapeutic
Option was granted and ending ***** thereafter. MPI and/or its
Affiliates may extend a Therapeutic Option for an additional *****
period by delivering written notice of such extension to Lexicon and
paying to Lexicon the option extension fee set forth in Section 5.6 on
or before the expiration of the initial ***** period. If MPI and/or its
Affiliates fails to obtain an exclusive commercial product license for
a Therapeutic Protein within ***** after the grant of the Therapeutic
Option (***** if the Therapeutic Option has been extended), then the
Therapeutic Option will terminate and all right, title and interest
under the Lexicon Technology granted pursuant to the Therapeutic Option
to Escrowed Sequence(s) which encodes such Therapeutic Protein will
revert exclusively to Lexicon.
12
13
CONFIDENTIAL - 9/23/99
2.10 PRODUCT LICENSE FOR THERAPEUTIC PROTEINS.
(a) Upon payment of the applicable product license fee *****
and subject to Section 2.17 and the other terms and conditions
of this Agreement, Lexicon will grant to MPI and/or its
Affiliates an exclusive, worldwide license under the Lexicon
Technology, with the right to grant sublicenses, to make, have
made, import, use, have used, offer for sale, sell and have
sold such Therapeutic Protein in the Field; provided, however,
that MPI and/or its Affiliates will not obtain a commercial
product license in the event that (i) a Third Party holds an
exclusive option or has obtained an exclusive commercial
product license to such Therapeutic Protein prior to MPI's
and/or its Affiliates' request for such exclusive commercial
product license (or prior to MPI's and/or its Affiliates'
request for a Therapeutic Option in the case where MPI and/or
its Affiliates holds a Therapeutic Option), or (ii) *****
prior to MPI's and/or its Affiliates' request for such
exclusive commercial product license (or prior to MPI's and/or
its Affiliates' request for a Therapeutic Option in the case
where MPI's and/or its Affiliates holds a Therapeutic Option),
as demonstrated by competent written records. MPI and/or its
Affiliates may collectively obtain exclusive commercial
product licenses to no more than ***** Therapeutic Proteins
during any ***** period during the Access Period, and to no
more than ***** Therapeutic Proteins after the Access Period.
(b) Lexicon will promptly annotate all Program Clones
representing the full-length gene corresponding to a
Therapeutic Protein licensed by MPI's and/or its Affiliates'
that are contained in the Human Gene Trap(TM) Database,
provided that Lexicon shall not effect such annotation in a
manner that indicates that all such Program Clones are part of
the same full-length gene sequence. ***** and shall use such
Confidential Information for the sole purpose of annotating
the Human Gene Trap(TM) Database as contemplated hereby. If an
exclusive commercial product license is available for such
Therapeutic Protein, such license will include Lexicon
Technology related to the use of all Lexicon Sequences that
represent the gene which encodes such Therapeutic Protein.
Lexicon will not reveal the identity of MPI and/or its
Affiliates as the company obtaining such exclusive commercial
product license.
2.11 EXCLUSIVE OPTIONS FOR ANTISENSE DRUGS. With respect to any gene
corresponding to an Escrowed Sequence or set of Escrowed Sequences that
is complementary to an Antisense Drug, and for which MPI and/or its
Affiliates has obtained a full-length coding sequence from any source,
MPI and/or its Affiliates will have the right to obtain from Lexicon an
exclusive option (an "Antisense Option") to obtain an exclusive
commercial product license to such Antisense Drug in accordance with
Section 2.12; provided, however, that neither MPI nor any of its
Affiliates will have the right to obtain an Antisense Option in the
event that (a) a Third Party holds an exclusive option or has obtained
an exclusive commercial product license to such Antisense Drug prior to
MPI's and/or its Affiliates' request for such Antisense Option, or (b)
***** prior to MPI's and/or its Affiliates'
13
14
CONFIDENTIAL - 9/23/99
request for an Antisense Option, as demonstrated by competent written
records. MPI's and/or its Affiliates' right to obtain Antisense Options
shall continue during the Access Period and for ***** thereafter,
provided that (i) in the event that ***** (ii) MPI and its Affiliates
may have no more than ***** Antisense Drugs under one or more Antisense
Options at any time during the Access Period (for purposes of which the
termination by MPI and/or its Affiliates of any Antisense Option prior
to its expiration date will be disregarded), and be granted no more
than ***** Antisense Options in any twelve-month period, and (iii)
MPI's and/or its Affiliates' right to obtain Antisense Options after
the Access Period shall be limited to ***** such Antisense Options. Any
request for an Antisense Option will be submitted to Lexicon by MPI in
writing, identifying the specific Program Clone or Program Clones that
contain the Escrowed Sequence(s) complementary to the Antisense Drug
for which the Antisense Option is requested and the date of the
request. Within ***** after the date Lexicon receives such request,
Lexicon will provide written notice to MPI (i) granting an Antisense
Option, or (ii) specifying the reason why an Antisense Option is not
available (limited to the reasons outlined in subsections (a) and (b)
above). In the event that Lexicon grants such Antisense Option
requested by MPI and/or its Affiliates, MPI and/or its Affiliates shall
***** MPI and/or its Affiliates may exercise an Antisense Option, in
its discretion at any time during the period commencing on the date
such Antisence Option was granted and ending ***** thereafter. MPI
and/or its Affiliates may extend an Antisense Option for an additional
***** period by delivering written notice of such extension to Lexicon
and paying to Lexicon the option extension fee set forth in Section 5.9
on or before the expiration of the initial ***** period. If MPI and/or
its Affiliates fails to obtain an exclusive commercial product license
for an Antisense Drug within ***** after the grant of the Antisense
Option (***** if the Antisense Option has been extended), then the
Antisense Option will terminate and all right, title and interest under
the Lexicon Technology granted pursuant to the Antisense Option to the
Escrowed Sequence(s) which is complementary to such Antisense Drug will
revert exclusively to Lexicon.
2.12 PRODUCT LICENSE FOR ANTISENSE DRUGS.
(a) Upon payment of the applicable product license fee ***** and
subject to Section 2.17 and the other terms and conditions of this
Agreement, Lexicon will grant to MPI and/or its Affiliates an
exclusive, worldwide license under the Lexicon Technology, with the
right to grant sublicenses, to make, have made, import, use, have used,
offer for sale, sell and have sold such Antisense Drug in the Field;
provided, however, that MPI and/or its Affiliates will not obtain a
commercial product license in the event that (i) a Third Party holds an
exclusive option or has obtained an exclusive commercial product
license to such Antisense Drug prior to MPI's and/or its Affiliates'
request for such exclusive commercial product license (or prior to
MPI's and/or its Affiliates' request for an Antisense Option in the
case where MPI and/or its Affiliates holds an Antisense Option), or
(ii) ***** prior to MPI's and/or its Affiliates' request for such
exclusive commercial product license (or prior to MPI's and/or its
Affiliates' request for an Antisense Option in the case where MPI's
and/or its Affiliates holds an Antisense Option), as demonstrated by
competent written records. MPI and/or its Affiliates may collectively
obtain exclusive
14
15
CONFIDENTIAL - 9/23/99
commercial product licenses to no more than ***** Antisense Drugs
during any ***** period during the Access Period, and to no more than
***** Antisense Drugs after the Access Period.
(b) Lexicon will promptly annotate all Program Clones representing the
full-length gene corresponding to an Antisense Drug licensed by MPI's
and/or its Affiliates' that are contained in the Human Gene Trap(TM)
Database, provided that Lexicon shall not effect such annotation in a
manner that indicates that all such Program Clones are part of the same
full-length gene sequence. ***** and shall use such Confidential
Information for the sole purpose of annotating the Human Gene Trap(TM)
Database as contemplated hereby. If an exclusive commercial product
license is available for such Antisense Drug, such license will include
Lexicon Technology related to the use of all Lexicon Sequences that
represent the gene which is complementary to such Antisense Drug.
Lexicon will not reveal the identity of MPI and/or its Affiliates as
the company obtaining such exclusive commercial product license.
2.13 PRODUCT LICENSE FOR SMALL MOLECULE DRUGS AND ANTIBODY DRUGS. Upon
receipt of written notice from MPI and/or its Affiliates that it has
initiated Pre-IND Studies with respect to a Small Molecule Drug or
Antibody Drug and subject to the terms and conditions of this
Agreement, Lexicon hereby grants to MPI and/or its Affiliates a
non-exclusive, worldwide license under the Lexicon Technology, with the
right to grant sublicenses, to make, have made, import, use, have used,
offer for sale, sell and have sold such Small Molecule Drug or Antibody
Drug in the Field.
2.14 PRODUCT LICENSE FOR GENE THERAPY DRUGS. Upon receipt of written notice
from MPI and/or its Affiliates that it has initiated Pre-IND Studies
related to a Gene Therapy Drug and subject to the terms and conditions
of this Agreement, Lexicon hereby grants to MPI and/or its Affiliates a
non-exclusive, worldwide license under the Lexicon Technology, with the
right to grant sublicenses, to make, have made, import, use, have used,
offer for sale, sell and have sold such Gene Therapy Drug in the Field.
2.15 PRODUCT LICENSE FOR DIAGNOSTIC PRODUCTS. Upon receipt of written notice
from MPI and/or its Affiliates that it has initiated Diagnostic
Validation Studies related to a Diagnostic Product and subject to the
terms and conditions of this Agreement, Lexicon hereby grants to MPI
and/or its Affiliates a non-exclusive, worldwide license under the
Lexicon Technology, with the right to grant sublicenses, to make, have
made, import, use, have used, offer for sale, sell and have sold such
Diagnostic Product in the Field.
2.16 SUBLICENSES. Any sublicense granted by MPI or its Affiliates will be
consistent with the terms and conditions of this Agreement. MPI or its
Affiliates will notify any sublicensee of all rights and obligations of
MPI under this Agreement which are sublicensed to such sublicensee and
will notify Lexicon within ***** of the grant of any sublicense
hereunder. MPI will remain primarily liable under this Agreement
irrespective of any sublicense granted hereunder.
2.17 RESERVATION OF RIGHTS. Subject to the non-exclusive rights and licenses
granted to MPI
15
16
CONFIDENTIAL - 9/23/99
and its Affiliates hereunder, Lexicon reserves all rights (a) to
provide Third Parties access to the Human Gene Trap(TM) and OmniBank(R)
Databases on terms and conditions consistent with the terms and
conditions of this Agreement, (b) to research, develop and
commercialize (internally or by granting non-exclusive licenses to
Third Parties or otherwise) Drug Targets, Small Molecule Drugs,
Antibody Drugs, Gene Therapy Drugs and Diagnostic Products derived from
the Human Gene Trap(TM) and/or OmniBank(R) Databases, and (c) to
research, develop and commercialize (internally or by granting
exclusive licenses to Third Parties or otherwise) Therapeutic Proteins
encoded by Program Clones and Antisense Drugs complementary to Program
Clones or the RNA encoded by Program Clones as to which MPI (i) does
not hold an unexpired Therapeutic Option or Antisense Option, or (ii)
has not obtained an exclusive commercial product license. Lexicon
reserves rights under the Lexicon Technology, for itself and its
collaborators, to make, have made and use Program Clones and
Therapeutic Proteins as to which MPI has rights of exclusivity
(including Licensed Therapeutic Proteins) to research, develop and
commercialize (internally or by granting non-exclusive licenses to
Third Parties or otherwise) Small Molecule Drugs, Antibody Drugs, Gene
Therapy Drugs, and Diagnostic Products, subject to MPI's non-exclusive
right under the Lexicon Technology to use such Program Clones and
Licensed Therapeutic Proteins for the same purposes. It is further
understood that no license under any intellectual property of MPI is
granted to Lexicon hereby. UNDER NO CIRCUMSTANCES WILL MPI HAVE ANY
RIGHT OR LICENSE TO PRACTICE LEXICON'S PROPRIETARY GENE TRAPPING
METHODS OR USE LEXICON'S PROPRIETARY GENE TRAP VECTORS.
2.18 REQUIREMENT OF PRODUCT LICENSES. The research and development licenses
granted under this Article 2 will specifically exclude any right or
license to market, sell, license or commercialize any Small Molecule
Drugs, Antibody Drugs, Therapeutic Proteins, Gene Therapy Drugs,
Antisense Drugs or Diagnostic Products discovered or developed using a
Lexicon Sequence absent a commercial product license.
2.19 EXTENSION OF RESEARCH AND DEVELOPMENT LICENSES FOLLOWING EXPIRATION OF
THE INITIAL ACCESS PERIOD. Unless MPI terminates this Agreement
pursuant to Section 9.2 or Section 9.3, the Access Period will extend
for an additional ***** following the end of the Initial Access Period
(the "Extended Access Period"). Following the expiration of the
Extended Access Period, MPI and MPI's Affiliates shall have continued
rights under the research and development licenses granted hereunder
and to obtain additional commercial product licenses under Sections
2.13 through 2.15 to no more than ***** Program Clones such number to
be subject to revision based on mutual agreement of the parties. MPI
shall deposit in escrow under the Escrow Agreement, within ***** after
the end of the Extended Access Period, the name of each Program Clone
for which it elects continued rights under this Section 2.19. MPI and
its Affiliates will be entitled to such rights only for Program Clones
that contain Lexicon Sequence of which it has made Material Use during
the Access Period. All other Lexicon Sequences, except for Lexicon
Sequences that are the subject of unexpired options or commercial
product licenses under Sections 2.9 through 2.12, will be permanently
removed from MPI's and its Affiliates records, computers, internal
databases, facilities, or any other repository system used by MPI and
its Affiliates for Program Clones during the Access Period, and, except
as provided in Sections 2.9 through 2.12, MPI and its Affiliates shall
have no further rights to obtain Therapeutic or
16
17
CONFIDENTIAL - 9/23/99
Antisense Options or commercial product licenses with respect to such
other Lexicon Sequences following the expiration of the Access Period.
2.20 ESCROW AGREEMENT.
(a) Lexicon shall have entered into an escrow agreement (the "Escrow
Agreement") with SourceFile Inc. or such other escrow agent mutually
acceptable to MPI, under which MPI shall be a beneficiary, on mutually
acceptable terms and conditions prior to or simultaneous with the
execution of this Agreement. During the Access Period, Lexicon will
deposit into escrow the names of all Program Clones in the Human Gene
Trap(TM) Database that have a corresponding full-length gene sequence
generated for purposes of Lexicon's LexGene(TM) Database or other
purposes in accordance with Lexicon's current labeling method for
Program Clones (e.g. H-TST1, H-TST2, H-TST3). Upon Material Use of a
Program Clone, MPI will promptly deposit the name of such Program Clone
in the escrow account in accordance with Lexicon's current labeling
method. The identity of such Program Clones will be held in escrow by a
third party escrow agent mutually acceptable to the parties. The Escrow
Agreement will contain other customary terms and conditions mutually
acceptable to Lexicon and MPI. Any third party escrow fees will be
shared equally by Lexicon and MPI.
(b) In the event MPI and/or Lexicon deposits the names of one or more
Program Clones into escrow, the escrow agent will compare, on a monthly
basis, such names to the names of Program Clones deposited in escrow by
Lexicon to search for any matches. If a match exists, then the escrow
agent will inform Lexicon and MPI of such match and MPI may request,
and upon such request Lexicon will provide to MPI, the full-length gene
sequence that matches the escrowed Program Clone, provided that Lexicon
shall have no obligation to provide MPI such full-length gene sequence
if such full-length gene sequence *****. In the event that Lexicon is
issued a Valid Claim within the Lexicon Patent Rights covering the
composition of matter of a full-length gene sequence disclosed to MPI
pursuant to this Section 2.20(b), then any milestone and royalty
payments payable to Lexicon under Article 5 with respect to a Licensed
Product derived from Program Clone(s) representing such gene *****.
2.21 NOTICE OF INFRINGEMENT. Upon Lexicon's receipt of a notice from MPI
and/or MPI's Affiliate's requesting an exclusive option and/or
exclusive commercial product license, and in the event Lexicon grants
such option or license to MPI and/or MPI's Affiliate, at any time
thereafter, Lexicon shall promptly notify MPI of any notice of
infringement, claims, judgments or settlements against or owed by
Lexicon with respect to such Therapeutic Proteins, Antisense Drugs
and/or any Program Clones encoding or corresponding to such Therapeutic
Proteins or Antisense Drugs or any part(s) thereof. In the event of
such notification, MPI and/or its Affiliates shall have the right, in
its sole discretion, to rescind its request.
2.22 INSPECTION RIGHT. During the Access Period MPI and/or MPI's Affiliates
shall have the right to inspect Lexicon Patent Rights, including
without limitation any Patent Office communications related thereto,
with respect to a given Program Clone, from time to time on
17
18
CONFIDENTIAL - 9/23/99
reasonable notice, for the purpose of evaluating MPI's and/or such
Affiliates' interest in obtaining an exclusive license under such
Lexicon Patent Rights pursuant to Sections 2.9 through 2.12. Subject to
Article 7, Lexicon shall provide a copy of such Lexicon Patent Rights
to MPI and/or MPI's Affiliates' to facilitate such inspection.
ARTICLE 3
DEVELOPMENT AND COMMERCIALIZATION DILIGENCE
3.1 CLINICAL DILIGENCE REQUIREMENTS.
(a) MPI will use commercially reasonable efforts to develop and
commercialize Licensed Products similar to the efforts it applies to
its own internal products at a similar stage in development with a
comparable market potential. MPI's diligence obligations may be
fulfilled partially and/or wholly by the efforts of MPI's Affiliates
and/or sublicensees. Without limiting the foregoing, MPI's diligence
obligations with respect to Licensed Therapeutic Proteins and Licensed
Antisense Drugs will include the following specific requirements with
respect to clinical development:
(i) MPI will ***** Licensed Therapeutic Protein or Licensed
Antisense Drug within ***** after obtaining an exclusive
license to such Licensed Therapeutic Protein or Licensed
Antisense Drug; and
(ii) MPI will ***** Licensed Therapeutic Protein or Licensed
Antisense Drug ***** Licensed Therapeutic Protein or Licensed
Antisense Drug.
(b) If MPI is unable, using commercially reasonable efforts, to satisfy
the foregoing diligence obligations with respect to a Licensed
Therapeutic Protein or Licensed Antisense Drug as a result of
preclinical obstacles or regulatory requirements (e.g. a Licensed
Therapeutic Protein or Licensed Antisense Drug requires extensive
pre-clinical efforts or a Licensed Therapeutic Protein or Licensed
Antisense Drug requires particularly large clinical trials or
repetition or refinement of previous clinical trials or MPI has unusual
difficulty in recruiting subjects for clinical trials), then the
applicable time period will be extended for a period of time reasonably
sufficient for MPI to complete such requirements.
3.2 LICENSED PRODUCT REVERSION RIGHTS. Subject to Section 3.1(b), MPI's
license with respect to a Licensed Therapeutic Protein or Licensed
Antisense Drug will terminate in the event MPI ***** or abandons the
development of, such Licensed Therapeutic Proteins or Licensed
Antisense Drug. If Lexicon believes that MPI has so ***** or abandoned
development with respect to a Licensed Therapeutic Protein or Licensed
Antisense Drug, Lexicon shall provide written notice to MPI specifying
such ***** or abandonment. MPI shall within ***** after receipt of such
notice, either (a) respond in writing to Lexicon indicating that it
does not concur that such ***** or abandonment has occurred, (b)
provide written notice to Lexicon of its intent to cure and then take
steps to cure such ***** or abandonment within ***** after receipt of
such
18
19
CONFIDENTIAL - 9/23/99
notice, and provide Lexicon with information concerning such ***** or
(c) respond in writing to Lexicon that it concurs with Lexicon's notice
(failure to respond within such ***** period shall be deemed to be
response under this subsection (c)). If MPI responds pursuant to
subsection (a), the parties shall use reasonable efforts to reach
mutual agreement as to whether such ***** or abandonment has occurred.
If MPI responds pursuant to subsection (c) or responds pursuant to
subsection (b) but fails to effect ***** within the ***** period, then
upon the resulting termination of MPI's license with respect to any
Licensed Therapeutic Protein or Licensed Antisense Drug, MPI will, to
the extent that MPI and its Affiliates are not then precluded under
their arrangements with Corporate Partners or other Third Parties,
grant to Lexicon an exclusive option to obtain an exclusive,
royalty-bearing, worldwide license, with the right to grant
sublicenses, under such intellectual property rights of MPI related to
such Licensed Therapeutic Protein or Licensed Antisense Drug as are
reasonably necessary to commercialize such Licensed Therapeutic Protein
or Licensed Antisense Drug, to make, have made, use, sell, offer for
sale and import such Licensed Therapeutic Protein or Antisense Drug. In
no event shall such intellectual property include any generic process
development or manufacturing technologies of MPI and/or MPI Affiliates.
Lexicon may exercise the option within ***** after the termination of
MPI's license. In the event that Lexicon exercises the option during
such ***** period, MPI and Lexicon will enter into good faith
negotiations to execute a definitive license agreement within *****
thereafter (the "Negotiation Period"). If Lexicon and MPI are not able
to reach mutually acceptable terms with respect to such Licensed
Therapeutic Protein or Antisense Drug, then MPI will not offer more
favorable terms to a Third Party than the last terms MPI offered to
Lexicon for ***** after the expiration of the Negotiation Period.
ARTICLE 4
DELIVERY AND ACCESS RIGHTS
4.1 DELIVERY OF HUMAN GENE TRAP(TM) DATABASE. Within five business days
after the Effective Date, Lexicon shall deliver to MPI a copy of the
Human Gene Trap(TM) Database in machine-readable form, in its most
current version as of the delivery date. MPI shall install the Human
Gene Trap(TM) Database on a maximum of two servers in secure locations
at its principal offices. MPI may install the Human Gene Trap(TM)
Database on an additional back-up server in the event either of the
other two servers becomes inoperable. MPI shall take reasonable
precautions to restrict access to the Human Gene Trap(TM) Database to
the scientists, other employees of MPI and its Affiliates, and third
party consultants and on-site collaborators who are working on MPI
and/or its Affiliates' behalf, who have access to MPI's own proprietary
gene databases, including without limitation all precautions MPI
employs with respect to its own proprietary gene databases. Lexicon
will update the Human Gene Trap(TM) Database from time to time during
the Access Period as additional Program Clones, annotations and other
related information become available. Lexicon will use commercially
reasonable efforts to update the Human Gene Trap(TM) Database and
provide such updates to MPI at least ***** but in no event less
frequently and promptly than Lexicon provides to other subscribers to
the Human Gene Trap(TM) Database. Lexicon shall not initiate a
full-length sequencing program based on the analysis of any Program
Clones or H-TSTs in the Human Gene Trap(TM) Database until after such
19
20
CONFIDENTIAL - 9/23/99
Program Clones or H-TSTs sequences are released to MPI and its other
subscribers of the Human Gene Trap(TM) Database.
4.2 ACCESS TO THE OMNIBANK(R) DATABASE. Within five business days after the
Effective Date, Lexicon shall deliver to MPI a copy of the OmniBank(R)
Database in machine-readable form, in its most current version as of
the delivery date. MPI shall install the OmniBank(R) Database on a
maximum of two servers in secure locations at its principal offices.
MPI may install the OmniBank(R) Database on an additional back-up
server in the event either of the other two servers become inoperable.
In addition to the foregoing, Lexicon may provide MPI with secure
Internet access during the Access Period, using a minimum of 128-bit
encryption, to the OmniBank(R) Database together with any necessary
bioinformatic software. MPI shall take reasonable precautions to
restrict access to the OmniBank(R) Database to the scientists and other
employees of MPI and its Affiliates, and third party consultants and
on-site collaborators who are working on MPI and/or its Affiliates'
behalf, who have access to MPI's own proprietary gene databases,
including without limitation all precautions MPI employs with respect
to its own proprietary gene databases. Lexicon will update the
OmniBank(R) Database from time to time during the Access Period as
additional Program Clones, annotations and other related information
becomes available. Lexicon will use commercially reasonable efforts to
update the OmniBank(R) Database and provide such updates to MPI at
least ***** but in no event less frequently and promptly than Lexicon
provides to other subscribers to the OmniBank(R) Database. Lexicon
shall not initiate a full-length sequencing program based on the
analysis of any Program Clones in the OmniBank(R) Database until after
such Program Clones are released to MPI and its other subscribers of
the OmniBank(R) Database. Lexicon represents and warrants that any
queries or records thereof resulting from MPI and/or its Affiliates'
use of Lexicon's secure Internet access shall be immediately purged
from Lexicon's records and Lexicon acknowledges that such queries shall
constitute Confidential Information of MPI and/or its Affiliates.
4.3 RIGHT TO OBTAIN PCR CLONES. During the Access Period, subject to the
terms and conditions of this Agreement, MPI shall have the right, upon
request and payment to Lexicon pursuant to Section 5.11, to obtain a
PCR clone of any escrowed Program Clone. Any request for a PCR clone
will be submitted in writing to Lexicon, identifying the specific
Program Clone for which a PCR clone is requested. Lexicon will use
commercially reasonable efforts to deliver requested PCR clones
promptly following its receipt of any such request, and will verify
that each PCR clone provided to MPI corresponds to the Program Clone
specified in such request.
4.4 ACCESS TO FULL-LENGTH CLONES. During the Access Period, subject to the
terms and conditions of this Agreement, MPI may request that Lexicon
extend to full-length any escrowed Program Clone. Any request for a
full-length clone will be submitted in writing to Lexicon, identifying
the specific Program Clone for which MPI desires a full-length clone.
Lexicon may, but shall have no obligation to, accept any such request.
Any such acceptance will be made by delivering written notice of such
acceptance to MPI within the time frame specified in MPI's request. In
the event Lexicon accepts any such request, Lexicon will use
commercially reasonable efforts to deliver the full-length clone
promptly following such acceptance and MPI will pay Lexicon the amount
set forth in Section 5.12. Prior to and for ***** after Lexicon's
delivery of such full-length clone to MPI, Lexicon shall not (i)
provide any DNA sequence
20
21
CONFIDENTIAL - 9/23/99
information from such clone that is not already in the Human Gene
Trap(TM) Database to any Third Party, (ii) place such full-length
sequence in the LexGene(TM) Database or (iii) *****. Subject to the
licenses granted under this Agreement, ownership of all intellectual
property rights shall be governed by the principles of inventorship
under U.S. patent law.
4.5 MUTANT MOUSE AND S-T-V(TM) PROGRAMS. During the Access Period and upon
mutually agreeable terms by the parties, MPI and its Affiliates may
participate in Lexicon's S-T-V(TM) Program to determine the biological
function of those Program Clones selected by MPI for further research
and development, it being understood that Lexicon and MPI are parties
to a Corporate Research and Development Agreement dated June 24, 1999
(the "Knock-Out Agreement") and that, pursuant to the Knock-Out
Agreement, MPI and its Affiliates are entitled under this Agreement to
access Lexicon's Mutant Mouse Program, on the terms and conditions of
that Knock-Out Agreement in lieu of the terms and conditions of Exhibit
A to this Agreement. Any requests by MPI and/or its Affiliates to
institute a knock-out mouse project pursuant to this Agreement shall be
credited towards MPI's obligation under Section 2.1 of the Knock Out
Agreement *****
4.6 ACCESS TO HUMANIZED MOUSE PROGRAM. During the Access Period and upon
mutually agreeable terms by the parties, MPI and its Affiliates will
have the right to access Lexicon's Humanized Mouse Program with respect
to the Program Clones selected by MPI for further research and
development. The parties agree to negotiate in good faith the business
terms for the Humanized Mouse Program on a project-by-project basis.
ARTICLE 5
PAYMENT OBLIGATIONS
5.1 INITIAL DATABASE ACCESS FEE. In consideration for access to the Human
Gene Trap(TM) and OmniBank(R) Databases during the Initial Access
Period, such access to be accomplished via the delivery of and
successful installation at MPI of such Human Gene Trap(TM) and
OmniBank(R) Databases, MPI will pay to Lexicon a non-refundable
database access fee of ***** payable (i) within 15 business days after
MPI's receipt of the Human Gene Trap(TM) and OmniBank(R) Databases on
CD-ROM pursuant to Section 4.1 and Section 4.2 or (ii) at MPI's sole
election pursuant to Section 1.13, on October 1, 1999.
5.2 EXTENDED DATABASE ACCESS FEE. In consideration for access to the Human
Gene Trap(TM) and OmniBank(R) Databases during the Extended Access
Period, MPI will pay to Lexicon a non-refundable extended database
access fee of (a) ***** payable within 15 business days after the
expiration of the Initial Access Period, and (b) ***** payable within
15 business days after the first anniversary of the Effective Date.
5.3 S-T-V(TM) PROGRAM. In the event MPI wishes to participate in Lexicon's
S-T-V(TM) Program, the parties will negotiate in good faith the fees
payable to Lexicon on a project by project basis.
5.4 HUMANIZED MOUSE PROGRAM. In the event MPI wishes to participate in
Lexicon's
21
22
CONFIDENTIAL - 9/23/99
Humanized Mouse Program, the parties will negotiate in good faith the
fees payable to Lexicon on a project by project basis.
5.5 OPTION FEE FOR A THERAPEUTIC PROTEIN. MPI will pay to Lexicon a
non-refundable option fee of ***** for each Therapeutic Protein subject
to a Therapeutic Option, payable within 10 business days after Lexicon
grants such Therapeutic Option to MPI.
5.6 OPTION EXTENSION FEE FOR A THERAPEUTIC PROTEIN. MPI will pay to Lexicon
a non-refundable option extension fee of ***** for each Therapeutic
Protein subject to a Therapeutic Option for which MPI elects to extend
the Therapeutic Option for an additional ***** period, payable upon the
expiration of the initial Therapeutic Option period.
5.7 PRODUCT LICENSE FEE FOR A LICENSED THERAPEUTIC PROTEIN. MPI will pay to
Lexicon a non-refundable product license fee of ***** for each Licensed
Therapeutic Protein, payable at the time MPI obtains an exclusive
commercial product license to such Licensed Therapeutic Protein.
5.8 OPTION FEE FOR AN ANTISENSE DRUG. MPI will pay to Lexicon a
non-refundable option fee of ***** for each Antisense Drug subject to
an Antisense Option, payable within 10 business days after Lexicon
grants such Antisense Option to MPI.
5.9 OPTION EXTENSION FEE FOR AN ANTISENSE DRUG. MPI will pay to Lexicon a
non-refundable option extension fee of ***** for each Antisense Drug
subject to an Antisense Option for which MPI elects to extend the
Antisense Option for an additional ***** period, payable upon the
expiration of the initial Antisense Option period.
5.10 PRODUCT LICENSE FEE FOR A LICENSED ANTISENSE DRUG. MPI will pay to
Lexicon a non-refundable product license fee of ***** for each Licensed
Antisense Drug, payable at the time MPI obtains an exclusive commercial
product license to such Licensed Antisense Drug.
5.11 PCR CLONE. MPI will pay to Lexicon ***** for each PCR clone provided to
MPI by Lexicon pursuant to Section 4.3.
5.12 FULL-LENGTH CLONE. MPI will pay to Lexicon ***** for each full-length
clone provided to MPI by Lexicon pursuant to Section 4.4.
5.13 MILESTONE PAYMENTS FOR EACH LICENSED SMALL MOLECULE DRUG OR LICENSED
ANTIBODY DRUG. Within 30 days after achievement of each of the
milestones set forth below for a Licensed Small Molecule Drug or
Licensed Antibody Drug, MPI will pay to Lexicon the non-refundable
milestone payment set forth below:
*****
*****
22
23
CONFIDENTIAL - 9/23/99
5.14 ROYALTY FOR EACH LICENSED SMALL MOLECULE OR LICENSED ANTIBODY DRUG. MPI
will pay to Lexicon ***** of Net Sales of each Licensed Small Molecule
Drug or Licensed Antibody Drug.
5.15 MILESTONE PAYMENTS FOR EACH LICENSED THERAPEUTIC PROTEIN. Within 30
days after achievement of each of the milestones set forth below for a
Licensed Therapeutic Protein, MPI will pay to Lexicon the
non-refundable milestone payment set forth below:
*****
*****
5.16 ROYALTY FOR EACH LICENSED THERAPEUTIC PROTEIN.
(a) MPI will pay to Lexicon on a country-by-country basis, (i)
***** and (ii) *****.
(b) *****
5.17 ROYALTY OFFSETTING PROVISION. In the event that MPI and/or any of its
Affiliates are required to obtain a license for ***** regarding a
Licensed Therapeutic Protein and MPI's total royalty obligations to
third parties, including royalties owed to Lexicon, exceeds ****
related to ***** then MPI may, on a country-by-country basis, credit
***** of the royalty rate that exceeds ***** against Lexicon's royalty
rate; provided, however, that in no event will Lexicon's royalty rate
be reduced below ***** of its initial royalty rate. *****
5.18 SPECIAL PROVISION FOR ROYALTY PAYMENTS. *****
5.19 MILESTONE PAYMENTS FOR EACH LICENSED ANTISENSE OR GENE THERAPY DRUG.
Within 30 days after achievement of each of the milestones set forth
below for a Licensed Antisense Drug or Gene Therapy Drug, MPI will pay
to Lexicon the non-refundable milestone payment set forth below:
*****
*****
23
24
CONFIDENTIAL - 9/23/99
5.20 ROYALTY FOR EACH LICENSED ANTISENSE DRUG OR LICENSED GENE THERAPY DRUG.
(a) MPI will pay to Lexicon on a country-by-country basis, (i)
***** and (ii) *****
(b) *****
5.21 MILESTONE PAYMENTS FOR EACH LICENSED DIAGNOSTIC PRODUCT. Within 30 days
after the first regulatory marketing approval for a Licensed Diagnostic
Product in a Major Market Country, MPI will pay to Lexicon *****.
5.22 ROYALTY FOR EACH LICENSED DIAGNOSTIC PRODUCT. MPI will pay to Lexicon
on a country-by-country basis (a) ***** (b) *****.
5.23 *****
5.24 ADDITIONAL MILESTONE PAYMENTS FOR EACH NOVEL GENE.
(a) Within 30 days after the initiation of Pre-IND Studies for each
Therapeutic Protein or Antisense Drug relating to a Lexicon Sequence
corresponding to a given Novel Gene, MPI will pay to Lexicon ***** in
addition to the milestone payments under Section 5.15 or 5.19 and
royalty payments under Sections 5.16 or 5.20 payable to Lexicon; and
(b) Within 30 days after the initiation of Pre-IND Studies for each
Antibody Drug, Small Molecule Drug or Gene Therapy Drug relating to a
Lexicon Sequence corresponding to a given Novel Gene, MPI will pay to
Lexicon **** in addition to the milestone payments under Sections 5.13
or 5.19 and royalty payments under Sections 5.14 or 5.20 payable to
Lexicon.
*****
5.25 TERM OF ROYALTY OBLIGATIONS. MPI's obligation to make royalty payments
with respect to a Licensed Product will commence on the First
Commercial Sale of such Licensed Product in a given country and will
continue until the later of (a) the expiration of the last to expire
patent covering such Licensed Product in such country, or (b) *****
years after the First Commercial Sale of such Licensed Product in such
country. *****
5.26 *****
5.27 CORPORATE PARTNERS AS SUBSCRIBERS TO THE HUMAN GENE TRAP(TM) DATABASE.
In the event a Corporate Partner who is also a subscriber to the Human
Gene Trap(TM) Database, elects, primarily as a result of work conducted
by MPI and/or MPI's Affiliates, to pursue the discovery, development
and commercialization of an Antibody Drug, Antisense Drug, Diagnostic
Product, Gene Therapy Drug, Small Molecule Drug or Therapeutic Protein
for which it would need to practice rights to a particular Program
Clone and/or Lexicon Sequence granted by Lexicon under such Corporate
Partner's own agreement with Lexicon, MPI and such Corporate Partner
shall
24
25
CONFIDENTIAL - 9/23/99
agree upon and advise Lexicon in writing as to which of the two parties
shall be responsible for the payments due to Lexicon and Lexicon shall
waive the payments otherwise due Lexicon from the other party in
connection with any such Antibody Drug, Antisense Drug, Diagnostic
Product, Gene Therapy Drug, Small Molecule Drug or Therapeutic Protein
developed by such Corporate Partner.
ARTICLE 6
PAYMENTS; RECORDS; AUDITS
6.1 PAYMENT; REPORTS. Royalty payments will be calculated and reported for
each calendar quarter. All royalty payments due to Lexicon under this
Agreement will be paid within ***** of the end of each calendar
quarter, unless otherwise specifically provided herein. Each payment of
royalties will be accompanied by a report in sufficient detail to
permit confirmation of the accuracy of the royalty payment made,
including, without limitation, Net Sales, the royalties payable in
United States dollars, the method used to calculate the royalty and any
exchange rates used.
6.2 EXCHANGE RATE; MANNER AND PLACE OF PAYMENT. All payments hereunder will
be payable in United States dollars. With respect to each quarter, for
countries other than the United States, whenever conversion of payments
from any foreign currency will be required, such conversion will be
made at the rate of exchange reported in the East Coast edition of The
Wall Street Journal on the last business day of the applicable
reporting period. All payments owed under this Agreement will be made
by wire transfer to a bank account designated by Lexicon, unless
otherwise specified in writing by Lexicon.
6.3 LATE PAYMENTS. In the event that any payment, including any royalty
payment, due hereunder is not made when due, the payment will accrue
interest from the date due at the rate of ***** per month; provided
however, that in no event will such rate exceed the maximum legal
annual interest rate. The payment of such interest will not limit
Lexicon from exercising any other rights it may have as a consequence
of the lateness of any payment.
6.4 RECORDS AND AUDITS. During the term of this Agreement and for a period
of ***** thereafter, MPI will keep complete and accurate records in
sufficient detail to permit Lexicon to confirm the accuracy of all
payments due hereunder. Lexicon will have the right to cause an
independent, certified public accountant reasonably acceptable to MPI,
who has executed MPI's then-current standard confidentiality agreement
to audit such records to confirm payments due hereunder. Such audits
may be exercised during normal business hours, subject to MPI's
security regulations, no more than once in any 12-month period upon
reasonable prior written notice to MPI. Lexicon will bear the full cost
of such audit, unless such audit discloses an underpayment of more than
***** of the amount due under this Agreement. In such case, MPI will
bear the full cost of such audit. In all events, MPI will pay any
underpayment with interest in accordance with Section 6.3.
6.5 TAXES. All taxes levied on account of the royalties and other payments
accruing to
25
26
CONFIDENTIAL - 9/23/99
Lexicon under this Agreement will be paid by Lexicon for its own
account, including taxes levied thereon as income to Lexicon. If
provision is made in law or regulation for withholding, such tax will
be deducted from the royalty or other payment made by MPI to the proper
taxing authority and a receipt of payment of the tax secured and
promptly delivered to Lexicon. Each party agrees to assist the other
party in claiming exemption from such deductions or withholdings under
any double taxation or similar agreement or treaty from time to time in
force.
ARTICLE 7
CONFIDENTIALITY
During the term of this Agreement and for a period of ***** thereafter, each
party will maintain all Confidential Information of the other party as
confidential and will not disclose any Confidential Information of the other
party to any Third Party or use any Confidential Information of the other party
for any purpose, except (a) as expressly authorized by this Agreement, (b) as
required by law, rule, regulation or court order (provided that the disclosing
party will use commercially reasonable efforts to obtain confidential treatment
of any such information required to be disclosed), (c) to its Affiliates,
Corporate Partners, Academic Collaborators, sublicensees, employees, agents,
consultants, and other representatives to accomplish the purposes of this
Agreement so long as such persons are under an obligation of confidentiality no
less stringent than as set forth herein or (d) as is reasonably necessary to
file or prosecute patent applications or to conduct preclinical or clinical
trials. Each party may use such Confidential Information only to the extent
required to accomplish the purposes of this Agreement. Each party will use at
least the same standard of care as it uses to protect its own Confidential
Information to ensure that its Affiliates, sublicensees, employees, agents,
consultants, and other representatives do not disclose or make any unauthorized
use of Confidential Information of the other party. Each party will promptly
notify the other party upon discovery of any unauthorized use or disclosure of
Confidential Information of the other party.
ARTICLE 8
REPRESENTATIONS; WARRANTIES; INDEMNIFICATION
8.1 CORPORATE POWER. Each party hereby represents and warrants that it is
duly organized, validly existing and in good standing under the laws of
the state of its incorporation and has full corporate power and
authority to enter into this Agreement and to carry out the provisions
hereof.
8.2 DUE AUTHORIZATION. Each party hereby represents and warrants that such
party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder.
8.3 BINDING AGREEMENT. Each party hereby represents and warrants that this
Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is
a party or by which it may be bound, nor violate any law or regulation
of any court, governmental body or administrative or other agency
having authority over it.
26
27
CONFIDENTIAL - 9/23/99
8.4 PATENTS. Lexicon hereby represents and warrants that: (i) prior to
releasing any DNA sequence from a Program Clone present in the Human
Gene Trap(TM) Database that it believes to be novel to any party
outside of Lexicon and/or prior to the disclosure to any party outside
of Lexicon of any full-length gene sequence that it believes to contain
novel DNA sequence information, it will file such patent applications
as are necessary to obtain Lexicon Patent Rights with respect to, or
representative of, such Program Clone(s) and/or such full-length
sequence as the case may be, ***** (ii) during the Access Period, it
will, consistent with reasonable commercial and patent practices,
prosecute such patent applications and maintain such patents as may
issue thereon and (iii) subsequent to the grant to MPI of any type of
commercialization option or license hereunder with respect to a Program
Clone or set of Program Clones corresponding to a given gene,
consistent with reasonable commercial and patent practices, continue to
prosecute the patent applications pertaining to such Program Clone or
set of Program Clones and to maintain such patents as may issue
thereon. In the event that MPI shall be granted an exclusive commercial
product license for a Licensed Therapeutic Protein or a Licensed
Antisense Drug and Lexicon shall desire to cease to prosecute or
maintain a patent application or patent pertaining to the related
Program Clone or set of Program Clones, Lexicon shall provide MPI with
prompt notice (but in no event less than ***** notice prior to any
required action necessary to prosecute or maintain such patent
application or patent) and, thereupon, MPI shall have the right to
assume such prosecution or maintenance, in the name and on behalf of
Lexicon, and to offset all of its reasonable and documented costs that
are directly associated with such prosecution and maintenance against
any payments due to Lexicon in relation to such Licensed Therapeutic
Protein or Licensed Antisense Drug.
8.5 DATABASE WARRANTIES. Lexicon hereby represents, warrants and covenants
to MPI as follows:
(a) Lexicon has the right to grant access to the Human
Gene Trap(TM)and OmniBank(R)
(b) Databases and licenses contemplated in this
Agreement, subject to the intellectual property
rights of others in gene sequence information
independently generated by parties other than
Lexicon;
(c) as of the date of delivery to MPI, the Human Gene
Trap(TM) Database contains at least ***** H-TSTs of
tag length greater than ***** nucleotides and with an
average length of approximately ***** base pairs or
more, and the OmniBank(R) Database contains at least
***** OSTs of tag length greater than *****
nucleotides;
(d) the Human Gene Trap(TM) Database and the OmniBank(R)
Database in the form delivered to MPI does not
contain any disabling device, code, computer virus or
defect that will with the passage of time or
otherwise, impair the functionality or use of the
Human Gene Trap(TM) Database and/or OmniBank(R)
Database;
27
28
CONFIDENTIAL - 9/23/99
(e) the Human Gene Trap(TM) Database and the OmniBank(R)
Database in the form delivered to MPI shall not in
any way malfunction, cease to function, or produce
incorrect data or results as a result of the Year
2000, and
(f) the Human Gene Trap(TM) Database and OmniBank(R)
Databases were prepared with and will be maintained
and updated with professional skill and care.
8.6 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE
OTHER PARTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
8.7 LIMITATION OF LIABILITY. NEITHER PARTY WILL BE ENTITLED TO RECOVER FROM
THE OTHER PARTY ANY SPECIAL, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT.
8.8 INDEMNIFICATION. MPI hereby agrees to save, defend, indemnify and hold
harmless Lexicon and its officers, directors, employees, consultants,
agents and other representatives from and against all losses, damages,
liabilities, expenses and costs, including reasonable legal expense and
attorneys' fees ("Losses"), to which Lexicon may become subject as a
result of any claim, demand, action or proceeding by any Third Party to
the extent such Losses arise out of or result from (a) the practice by
MPI of the licenses granted hereunder, or (b) the development,
manufacture, use, handling, storage, sale or other disposition of any
Licensed Product by MPI, its Affiliates or sublicensees. In the event
Lexicon seeks indemnification under this Section 8.8, it will promptly
inform MPI of a claim in writing, will permit MPI to assume direction
and control of the defense of the claim including the right to settle
the claim, and will cooperate as requested at the expense of MPI, in
the defense of the claim. The foregoing MPI indemnification obligations
shall not apply if such claim, demand, action or proceeding arises as a
result of Lexicon's breach of the warranties set forth in Section 8.5.
ARTICLE 9
TERM; TERMINATION
9.1 TERM. This Agreement will commence as of the Effective Date and will
continue until the expiration of all of MPI's obligations to pay
royalties hereunder with respect to Licensed Products, unless
terminated earlier as provided herein.
9.2 TERMINATION. Either party may terminate this Agreement prior to the
expiration of the term of this Agreement upon or after the breach of
any material provision of this Agreement by the other party if the
breaching party has not cured such breach within ***** after written
notice thereof by the non-breaching party.
28
29
CONFIDENTIAL - 9/23/99
9.3 TERMINATION BY MPI. MPI may terminate this Agreement by providing
written notice of termination to Lexicon at least ***** prior to the
expiration of the Initial Access Period. In the event MPI terminates
this Agreement prior to the expiration of the Initial Access Period,
MPI will provide to Lexicon a written report citing its reasons for
termination, including general statistical data MPI discovered
regarding the novelty of the Human Gene Trap(TM) and OmniBank(R)
Databases compared to MPI's internal proprietary databases.
9.4 EFFECT OF TERMINATION.
(a) *****Upon termination of this Agreement subsequent to
the Initial Access Period, (i) MPI's access to the
Human Gene Trap(TM) Database and OmniBank(R) Database
and research and development licenses shall
terminate, (ii) any commercial product licenses shall
continue in full force and effect, subject to the
terms and conditions of this Agreement, and (iii) MPI
will promptly delete from its databases all other
data provided by Lexicon to MPI during the Access
Period related to the Human Gene Trap(TM) and
OmniBank(R) Databases and all other Lexicon Sequences
which are not related to such commercial product
licenses. Notwithstanding the foregoing, in the event
MPI fails to pay any fees or royalties for an
individual commercial product license, Lexicon shall
have the right to terminate the commercial product
license for which payment was not made.
(b) Within 30 days following the expiration or
termination of this Agreement, each party will return
to the other party, or destroy, upon the written
request of the other party, any and all Confidential
Information of the other party in its possession.
(c) Expiration or termination of this Agreement will not
relieve the parties of any obligation accruing prior
to such expiration or termination. The provisions of
Sections 6.4, 8.4, 8.5, 8.6, 8.7, 8.8 and 9.4 and
Articles 1, 7 and 10 will survive termination or
expiration of this Agreement.
ARTICLE 10
MISCELLANEOUS
10.1 FORCE MAJEURE. Neither party will be held liable or responsible to the
other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of
this Agreement (other than non-payment) when such failure or delay is
caused by or results from causes beyond the reasonable control of the
affected party, including, without limitation, fire, floods,
earthquakes, natural disasters, embargoes, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts,
omissions or delays in acting by any governmental authority or the
other party.
29
30
CONFIDENTIAL - 9/23/99
10.2 ASSIGNMENT. Except as expressly provided hereunder, neither this
Agreement nor any rights or obligations hereunder may be assigned or
otherwise transferred by either party without the prior written consent
of the other party (which consent will not be unreasonably withheld);
provided, however, that either party may assign this Agreement and its
rights and obligations hereunder without the other party's consent (a)
in connection with the transfer or sale of all or substantially all of
the business of such party to which this Agreement relates to a Third
Party, whether by merger, sale of stock, sale of assets or otherwise,
or (b) to an Affiliate. Notwithstanding the foregoing, any such
assignment to an Affiliate will not relieve the assigning party of its
responsibilities for performance of its obligations under this
Agreement. In the event of such transaction with an unrelated Third
Party, notwithstanding the other provisions of this Agreement, the
intellectual property rights of such Third Party shall not be subject
to the licenses granted under this Agreement. The rights and
obligations of the parties under this Agreement will be binding upon
and inure to the benefit of the successors and permitted assigns of the
parties. Any assignment not in accordance with this Agreement will be
void.
10.3 GOVERNING LAW. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without
regard to any choice of law provisions which would result in the
application of the law of another jurisdiction.
10.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Knock-Out Agreement
(including the Exhibits attached hereto) set forth all of the
agreements and understandings between the parties hereto with respect
to the subject matter hereof, and supersede and terminate all prior
agreements and understandings between the parties with respect to the
subject matter hereof. There are no agreements or understandings with
respect to the subject matter hereof, either oral or written, between
the parties other than as set forth herein. Except as expressly set
forth in this Agreement, no subsequent amendment, modification or
addition to this Agreement will be binding upon the parties hereto
unless reduced to writing and signed by the respective authorized
officers of the parties.
10.5 PUBLICITY. Except as provided in this Section 10.5, Lexicon and MPI
each agree not to disclose any terms or conditions of this Agreement to
any Third Party without consulting the other party prior to such
disclosure. Notwithstanding the foregoing, prior to the Effective Date
of this Agreement, Lexicon and MPI shall agree upon the substance of
information that can be used as a routine reference in the usual course
of business to describe the existence and general nature of this
transaction, and Lexicon and MPI may, on or after the Effective Date,
disclose such information without consulting the other party. The
parties may thereafter from time to time mutually agree on revisions to
material to be used as a routine reference, which revisions shall be
submitted by one party for the review and approval of the other party
at least ten (10) days prior to the anticipated use or disclosure of
the revised material, such approval not to be unreasonably withheld or
delayed. If either party desires to release a separate announcement
relating to this Agreement, to the extent such separate announcement
contains information concerning the other party that differs from the
materials previously agreed upon for use as a routine reference, it
shall first allow the other party to approve in writing such proposed
announcement in redacted form, such approval not to be unreasonably
withheld or delayed.
30
31
CONFIDENTIAL - 9/23/99
The terms of this Agreement shall be treated as the Confidential
Information of Lexicon and MPI, and shall not be disclosed to anyone
(except for the parties' respective employees, agents and attorneys
with regard to this Agreement who have a need to know the terms of this
Agreement) without the written permission of MPI or Lexicon; provided
that MPI may disclose to its actual and potential sublicensees that it
is a subscriber to the Human Gene Trap(TM) Database; and provided,
further, that MPI may disclose the restrictions imposed on it as a
subscriber to the Human Gene Trap(TM) Database to the employees,
directors or officers of its actual and potential sublicensees, under a
written confidentiality agreement, to the extent necessary to enable
such sublicensees to fulfill their obligations to MPI and Lexicon under
sponsored research and other similar agreements.
10.6 NOTICES. All notices and other communications provided for hereunder
will be in writing and will be mailed by first-class or certified mail,
postage paid, or delivered personally, by overnight delivery service or
by facsimile, with confirmation of receipt, addressed as follows:
IF TO LEXICON: LEXICON GENETICS INCORPORATED
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO MPI: MILLENNIUM PHARMACEUTICALS, INC.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Business Officer
Telephone: 617/000-0000
WITH A cc TO: General Counsel
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Either party may by like notice specify or change an address to which
notices and communications will thereafter be sent. Notices sent by facsimile
will be effective upon confirmation of receipt, notices sent by mail or
overnight delivery service will be effective upon receipt, and notices given
personally will be effective when delivered.
31
32
CONFIDENTIAL - 9/23/99
10.7 INDEPENDENT CONTRACTORS. It is expressly agreed that Lexicon and MPI
will be independent contractors and that the relationship between the
two parties will not constitute a partnership, joint venture or agency
of any kind. Neither party will have the authority to make any
statements, representations or commitments of any kind, or to take any
action, which will be binding on the other party, without the prior
written consent of the other party.
10.8 WAIVER. Except as specifically provided for herein, the waiver from
time to time by either party of any right or failure to exercise any
remedy will not operate or be construed as a continuing waiver of the
same right or remedy or of any other of such party's rights or remedies
provided under this Agreement.
10.9 SEVERABILITY. In case any provision of this Agreement will be invalid,
illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired
thereby.
10.10 HEADINGS. The captions contained in this Agreement are not a part of
this Agreement, but are merely guides or labels to assist in locating
and reading the several Articles hereof.
10.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
10.12 DISPUTES. Any controversy, claim or dispute arising out of or relating
to this Agreement shall be settled, if possible, through good faith
negotiations between the parties. If, however, the parties are unable
to settle such dispute after good faith negotiations, the matter shall
be referred to the executive officers of each company to be resolved by
negotiation in good faith as soon as is practicable but in no event
later than 30 days after referral. If the executive officers are unable
to settle the dispute after good faith negotiation in the manner set
forth above, then in addition to any other recourse in law or in equity
available to either party, with respect to issues directly relating to
(a) Lexicon's reasonable, good faith belief that MPI or its Affiliates
are developing or have developed a product using a specific Program
Clone that (i) requires a commercial product license under this
Agreement and for which MPI and/or its Affiliates have not complied
with the material terms and conditions of this Agreement necessary to
obtain such commercial product license or (ii) for which Lexicon is
entitled to milestone payments and/or royalties under this Agreement
and for which undisputed amounts have not been paid by Millennium
and/or its Affiliates or (b) MPI and/or its Affiliates reasonable, good
faith belief that Lexicon has failed to comply with its obligations set
forth in Section 2.20(a) of this Agreement, then upon written notice to
the other party, either party may proceed with the procedures set forth
in the Escrow Agreement.
32
33
CONFIDENTIAL - 9/23/99
IN WITNESS WHEREOF, the parties have executed this Agreement as of the latest
date set forth below.
LEXICON GENETICS INCORPORATED MILLENNIUM PHARMACEUTICALS, INC.
By: /S/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ ------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxx
---------------------------- ----------------------------
Title: President and Chief Title: Chief Business Officer
Executive Officer ---------------------------
---------------------------
Date: 9/28/99 Date: 9/27/99
---------------------------- ----------------------------
34
CONFIDENTIAL - 9/23/99
EXHIBIT A
MUTANT MOUSE PROGRAM
During each year of the Access Period, MPI may submit one or more
written purchase orders to Lexicon to purchase up to **** custom mutant mice
under the financial terms described below. Lexicon will generate custom mutant
mice (e.g. conditionals, point mutations or standard deletions) for MPI and
provide updates every two months as to Lexicon's progress in generating such
custom mutant mice. The cost and time to generate a custom mutant mouse will
depend upon the type of mutant mouse requested as described below. The main
procedures Lexicon will perform to generate a custom mutant mouse are described
below. Mutant mice made by homologous recombination under this program will be
subject to the terms and conditions of the collaboration agreement between
Millennium Pharmaceuticals, Inc. and Lexicon Genetics Incorporated and any
successor to such Agreement, dated June 24, 1999, unless otherwise agreed to in
writing by the parties.
I. PRICING
MUTANT MICE GENERATED BY HOMOLOGOUS RECOMBINATION:
Non Cre-Lox *****
Cre-Lox *****
MUTANT MICE GENERATED BY OMNIBANK(R) METHOD (E.G. USING EMBRYONIC STEM
CELLS DERIVED FROM OMNIBANK(R) SEQUENCE TAGS):
OmniBank(R)Mice *****
The parties agree to negotiate in good faith the terms under which MPI will
receive non-exclusive rights to and delivery of mice generated under the
OmniBank(R) Method.
II. GENERAL CUSTOM MUTANT MOUSE SCIENTIFIC PROCEDURES
*****
35
CONFIDENTIAL - 9/23/99
EXHIBIT B
SEEK TARGET VALIDATION (S-T-V(TM)) PROGRAM
The S-T-V Program includes the generation of custom mutant mice and
primary phenotypic analysis of the mutant mouse to help discern the drug
target's biological function in vivo. The price for each S-T-V Program is based
on a project by project scenario for a specific gene of interest to the partner
and depends on the number and type of experiments performed as depicted below
through Levels I - III.
Upon completion of the mutant mouse for a specific S-T-V Program,
Lexicon will work with its partner to identify a battery of biological
experiments to perform under this project. Although not inclusive, the following
list provides a sample representation of the breadth of biological experiments
Lexicon can perform to better understand the biological function of the Drug
Target.
LEVEL I - PRIMARY BIOLOGICAL ANALYSIS
Level I analysis is designed to identify primary pathophysiological
perturbations resulting from engineered mutations. Although not an exhaustive
list, primary phenotypic screens may include any or all of the following
scientific experiments.
FULL ANATOMICAL AND HISTOLOGICAL ANALYSIS ON MUTANT ANIMALS:
*****
Additional cost for biological experiments under Level I: *****
LEVEL II - ORGAN AND PHYSIOLOGIC SYSTEMS ANALYSIS
Level II analysis is designed as a continuation of the Level I
preliminary analysis of the pathophysiological perturbations resulting from
engineered mutations. Level II analysis is focused on organ and system function
and represents an exhaustive analysis of organismal physiology. Phenotypic
screen analysis under Level II may include any or all of the following
scientific experiments. Additional screens and assays to be conducted shall be
determined by the parties in accordance to the specific requirements of such
project.
FULL ORGAN AND PHYSIOLOGIC SYSTEMS FUNCTIONAL ANALYSIS:
*****
Additional cost for biological experiments under Level II: *****
36
CONFIDENTIAL - 9/23/99
LEVEL III - PATHWAY DISCOVERY AND ANALYSIS
Level III analysis is designed as a continuation of the Level I and
Level II analysis of the pathophysiological perturbations resulting from
engineered mutations. Level III analysis is designed to define biochemical
pathways, identify new drug-targets and to define the biochemical mechanism of
the pathophysiology identified in the Level I and Level II analysis. Level III
analysis utilizes biochemistry, cell biology, enzymology, molecular biology and
other biological disciplines to define the molecular mechanism leading to the
identified dysfunction. Level III analysis further exploits gene expression
profiling with mutant, heterozygous and wild-type mouse strains that differ in
only one gene. These animals are the perfect substrate for gene expression
profiling analysis. This analysis will identify up-regulated and down-regulated
genes responsive to the initial genetic perturbation. This analysis is
substantially aided by Lexicon's proprietary gene-trap sequence tags, which
provide the advantage to analyze tens-of-thousands of novel genes. In addition
Lexicon will analyze the target protein for interacting proteins by two-hybrid
analysis.
Additional cost for biological experiments under Level III: *****
