EXHIBIT 10.18
SECRETED PROTEIN
DEVELOPMENT AND COLLABORATION AGREEMENT
THIS SECRETED PROTEIN DEVELOPMENT AND COLLABORATION AGREEMENT (this
"Agreement") is entered into and made on October 9, 2001 (the "Effective Date")
by and between DELTAGEN, INC. ("DELTAGEN"), a corporation organized and existing
under the laws of the state of Delaware and having a principal place of business
at 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 and HYSEQ, INC. ("HYSEQ")
a corporation incorporated and existing under the laws of the state of Nevada
having a principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000-0000. DELTAGEN and HYSEQ are both referred to herein as
"Parties" or each individually, as a "Party."
RECITALS
WHEREAS, HYSEQ is in the business of applying its proprietary genomics
platform and utilizing its proprietary sequencing-by-hybridization technology to
find and develop biopharmaceuticals products and has discovered and identified
genes encoding for secreted proteins that may have potential as therapeutic
proteins; and
WHEREAS, DELTAGEN possesses certain knowledge and experience in the
design, generation, and phenotypic analysis of transgenic animals, including
knock-out mice and has technologies useful in determining the in vivo function
of mammalian genes; and
WHEREAS, HYSEQ and DELTAGEN each desire, on the terms and conditions
contained herein, to collaborate on the discovery, research, development and
commercialization of biopharmaceutical products through the analysis and study
of human gene sequences provided by HYSEQ; and
WHEREAS, in connection with this collaboration, HYSEQ will contribute,
in accordance with the terms and conditions of this Agreement, human gene
sequences and a corresponding murine ortholog sequence sufficient for the
Steering Committee to designate [***] Project Genes to the collaboration and
will grant licenses covering such genes and related technology and derivatives
thereof; and
WHEREAS, DELTAGEN will, in accordance with the terms and conditions of
this Agreement, create ES cell lines and generate knock-out mice based on [***]
Project Genes and
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their orthologous murine gene sequences, as identified by HYSEQ, and DELTAGEN
will study and analyze such knock-out mice to identify secreted proteins for
further development and commercialization by the Parties; and
WHEREAS, the Parties shall undertake research and development programs
as determined by the Parties on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the amount and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 "ADDITIONAL TESTS" shall have the meaning set forth in Section
5.4.1.
1.2 "AFFILIATE" means at the time of determination any Person which
directly or indirectly is controlled by, controls or is under common control
with any Party hereto. "Control" shall in this context mean ownership of greater
than fifty percent (50%) of the voting stock or other interests in the Person in
question. In any country of the Territory in which local law prohibits the
ownership by DELTAGEN or HYSEQ of greater than fifty percent (50%) of the voting
stock or other interests of an entity, the entity shall be deemed an Affiliate
of DELTAGEN or HYSEQ, as applicable, if DELTAGEN or HYSEQ owns the maximum
percentage permitted by law, as long as such maximum percentage is at least
thirty percent (30%).
1.3 "AGENCY" means any governmental regulatory authority responsible for
granting approvals for the sale of a product.
1.4 "DELTABASE" means DELTAGEN's functional genomics database and
software.
1.5 "DELTAGEN KNOCK-OUT TECHNOLOGY" means all Technical Information that
is owned or controlled by DELTAGEN as of the Effective Date or developed solely
by DELTAGEN during the Term of this Agreement relating to any methods of making,
generating, producing, creating, breeding and/or analyzing transgenic animals,
including Knockout Mice, or libraries, clones, plasmids, constructs and vectors
used in such methods (including ES cell lines and frozen sperm).
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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1.6 "DERIVATIVE PROTEIN" means (i) any fragment of a Secreted Protein,
or (ii) any altered form of a Secreted Protein or a fragment thereof, including
amino acid substitutions, additions, deletions, and C- and N-terminal fusions.
1.7 "DERIVED" OR "DERIVED" means obtained, developed, created, tested,
identified, discovered, synthesized, designed, derived or resulting from, based
upon or otherwise generated (whether directly or indirectly, or in whole or in
part), and anything so derived shall be referred to herein as "derivatives."
1.8 "DEVELOPMENT PROGRAM" shall have the meaning set forth in Section
3.1.
1.9 "FIRST PASS PHENOTYPIC ANALYSIS" means the tests, observations, and
analyses listed on Exhibit A.
1.10 "FTE" means the equivalent of one person with at least a bachelor's
degree providing scientific, pre-clinical, clinical trial, or regulatory work on
a full-time basis (i.e., no less than a total of [***] hours per calendar year,
prorated in the case of a partial calendar year). Any FTE charge for the FTEs
dedicated to the applicable matter shall be the number of hours each FTE of a
Party directly spent on the applicable matter billed at a rate equal to the cost
incurred by such Party for such FTE, but not exceeding [***] per calendar year,
which rate includes salary and benefits.
1.11 "HYSEQ KNOW-HOW" means any and all Technical Information that is
solely owned or controlled by HYSEQ as of the Effective Date or developed solely
by HYSEQ during the Term of this Agreement that relates to any Proposed Gene or
any Project Gene, as applicable, or any mutation, fragment, allelic variant,
analog, homolog or ortholog of any Proposed Gene or Project Gene, as applicable,
and/or any expression products and/or derivatives thereof.
1.12 "HYSEQ PATENTS" means all Patents in any country in the Territory
that are solely owned or controlled by HYSEQ as of the Effective Date or
developed solely by HYSEQ during the Term that relate to any Proposed Gene or
any Project Gene, as applicable, or any mutation, fragment, allelic variant,
analog, homolog or ortholog of any Proposed Gene or any Project Gene, as
applicable, and/or any expression products and/or derivatives thereof,
1.13 "INITIAL MURINE GENE ANALYSIS" means the conduct of studies and
analysis to
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identify a murine gene sequence orthologous to a Submitted Gene through HYSEQ'S
standard resources.
1.14 "JOINT PROJECT INTELLECTUAL PROPERTY, DELTAGEN PROJECT INTELLECTUAL
PROPERTY AND HYSEQ PROJECT INTELLECTUAL PROPERTY" (collectively, "Project
Intellectual Property") shall have the meanings set forth in Section 10.1.1.
1.15 "JOINT PROJECT PATENTS, DELTAGEN PROJECT PATENTS AND HYSEQ PROJECT
PATENTS" (collectively, "Project Patents") shall have the meanings set forth in
Section 10.1.1.
1.16 "LOSS" has the meaning set forth in Section 8.1.
1.17 "PATENT(s)" means any patent, provisional or patent application,
and all additions, divisions, continuations, continuations-in-part,
substitutions, reissues, extensions, registrations, supplementary protection
certificates and renewals of any of the foregoing.
1.18 "PAYMENT ONE," "PAYMENT TWO," PAYMENT THREE" AND "TOTAL PAYMENT"
shall have the meanings set forth in Section 5.1.
1.19 "PERSON" means a person, corporation, partnership, limited
liability company or any other entity.
1.20 "CONFLICTING PIPELINE" means a gene or gene sequence that, as of
the date submitted by HYSEQ to DELTAGEN Section 4.1.1 of this Agreement, has
been designated for research and development by DELTAGEN for a Third Party.
1.21 "PROJECT" means the activities of the Parties under the Development
Program with respect to a single Project Gene and/or its orthologous Project
Murine Gene (and with respect to any Project Knock-Out Mice, Secreted Proteins,
Derivative Proteins, Secreted Protein Candidates and Products derived
therefrom), as set forth in the Work Plan in accordance with this Agreement, or
as directed by the Steering Committee.
1.22 "PROJECT KNOCK-OUT MOUSE" OR "PROJECT KNOCK-OUT MICE" means any
mouse or mice in which DELTAGEN has, pursuant to this Agreement, interrupted,
disrupted, or deleted a specific gene or portion thereof, orthologous to a
Project Gene, to inactivate the function of
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such gene in such mouse or mice.
1.23 "PRODUCT" means any product that contains as an active ingredient
(i) a Secreted Protein Candidate (or portion thereof), or (ii) an agonist or
antagonist (including, without limitation, anti-sense, antibodies and small
molecules) of a Secreted Protein Candidate.
1.24 "PROJECT GENE" means a Proposed Gene that has been designated by
the Steering Committee as a "project gene" pursuant to Section 4.2.
1.25 "PROJECT MURINE GENE" means a murine gene sequence that the
Steering Committee has designated as the orthologous murine gene for the human
Igene sequence of a Project Gene.
1.26 "PROPOSED GENE" means a gene sequence (i) submitted to the Steering
Committee for consideration for inclusion under the Development Program as a
"project gene" as set forth in Section 4.1; (ii) which is believed to encode a
Secreted Protein; (iii) for which a patent application has been filed by HYSEQ
regarding the human gene sequence and the Secreted Protein believed to be
produced by such human gene sequence; and (iv) its corresponding Project Murine
Gene.
1.27 "PROTEIN" means a high molecular weight (i.e., weighing more than
one thousand (1000) daltons), polymer compound composed of a variety of amino
acids joined by peptide linkages, including allelic variants thereof and
post-translationally modified variants thereof (i.e., glycosylated proteins).
1.28 "REJECTED PROPOSED GENE" has the meaning set forth in Section 4.3.
1.29 "REJECTED PROJECT GENE" has the meaning set forth in Section 5.5.3.
1.30 "REJECTED SUBMITTED GENE" has the meaning set forth in Section
4.1.2(b).
1.31 "RESTRICTION TERM" means the period of time a Rejected Project Gene
is subject to the restrictions set forth in Section 5.5.3. Unless a different
time period is voted on and approved by a majority of the Steering Committee for
a particular Rejected Project Gene, the Restriction Term for such Rejected
Project Gene shall be [***] from the date it becomes a Rejected Project Gene
under this Agreement.
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1.32 "SECRETED PROTEIN" means a Protein or Protein fragment released
from a cell.
1.33 "SECRETED PROTEIN CANDIDATE" means a Secreted Protein which the
Parties through the Steering Committee have designated as a "secreted protein
candidate" pursuant to Section 5.5.1 and any and all Derivative Proteins
thereof.
1.34 "SUBMITTED GENE" means a human gene coding sequence (i) submitted
to DELTAGEN by HYSEQ for consideration for inclusion as a "proposed gene" as set
forth in Section 4.1.1; (ii) which is believed to encode a Secreted Protein; and
(iii) for which a patent application has been filed by HYSEQ regarding the human
gene sequence and the Secreted Protein] believed to be produced by such human
gene sequence.
1.35 "TECHNICAL INFORMATION" means all technology, know-how, copyrights,
trade secrets, software, techniques, data, technical information and all other
intellectual property and other proprietary information, including all
inventions (whether or not patentable), improvements and developments,
practices, applications, protocols, concepts, biological materials (including
nucleic acid sequences, RNA, DNA, organisms, proteins, polypeptides, plasmids
and vectors), processes, methods (including methods of use or treatment for
human or murine secreted proteins), pre-clinical, clinical and regulatory data
and information, clinical and regulatory strategies, test data, analytical and
quality control data, reports, manufacturing information, patent data or
descriptions, development information, drawings, specifications, designs
(whether or not registerable), plans, proposals and technical data and manuals,
documents, rights in databases, computer data and source code.
1.36 "TERM" has the meaning set forth in Section 11.1.
1.37 "TERRITORY" means the entire world.
1.38 "THIRD PARTY" means any Person other than a Party to this Agreement
or an Affiliate of either Party.
1.39 "VALID CLAIM" means any claim within an issued, unexpired Patent
which (i) has not been held unenforceable, unpatentable or invalid by a decision
of a court or other governmental agency of competent jurisdiction following
exhaustion of all possible appeal processes and (ii) has not been abandoned,
disclaimed, or admitted to be invalid or unenforceable
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through reissue, reexamination or disclaimer.
1.40 "WORK PLAN" means the work plan developed by the Steering
Committee, as may be modified from time to time by the Steering Committee
(initially Exhibit C), that sets forth the responsibilities of the Parties under
the Development Program, including in connection with the selection of the
Project Genes from Proposed Genes and with respect to the generation and
analysis of the Project Knock-Out Mice. The First Pass Phenotypic Analysis and
Exhibit A shall be part of the Work Plan and therefore references to the Work
Plan shall include the First Pass Phenotypic Analysis and Exhibit A.
ARTICLE 2
LICENSE GRANT
2.1 HYSEQ LICENSE. During the Term of this Agreement and subject to the
terms and conditions hereof, HYSEQ hereby grants to DELTAGEN the following
licenses:
2.1.1 SUBMITTED GENES. On a Submitted Gene-by-Submitted Gene
basis, a non-exclusive right and license, until the earlier of (a) the date upon
which a Submitted Gene becomes a Rejected Submitted Gene under this Agreement or
(b) the date upon which a Submitted Gene becomes a Proposed Gene under this
Agreement (at which time the license under Section 2.1.2 shall become
effective), under the HYSEQ Patents and HYSEQ Know-How solely for the purpose of
conducting review and analysis activities with respect to such Submitted Gene in
accordance with the terms and conditions of this Agreement including determining
whether such Submitted Gene is in Deltagen's Conflicting Pipeline, and
performing an intellectual property analysis with respect to DELTAGEN's use of
such Submitted Genes.
2.1.2 PROPOSED GENES. On a Proposed Gene-by-Proposed Gene basis,
and upon submission by HYSEQ of the information related to such Proposed Genes
under Section 4.1.3, a non-exclusive right and license, until the earlier of (a)
the date upon which a Proposed Gene becomes a Rejected Proposed Gene under this
Agreement or (b) the date upon which a Proposed Gene becomes a Project Gene
under this Agreement (at which time the license under Section 2.1.3 shall become
effective), under the HYSEQ Patents and HYSEQ Know-How solely for the purpose of
conducting review and analysis activities with respect to such Proposed Gene in
accordance with the terms and conditions of this Agreement, including the Work
Plan,
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including to identify murine gene sequences orthologous to the Proposed Gene if
such activities are not already performed by HYSEQ or if instructed by the
Steering Committee.
2.1.3 PROJECT GENES. On a Project Gene-by-Project Gene basis, and
upon designation of a Proposed Gene as a Project Gene under this Agreement, a
co-exclusive right and license until the earlier of (a) the date upon which such
Project Gene becomes a Rejected Project Gene (at which time the license under
Section 2.1.4 shall become effective), or (b) termination of the collaboration
in accordance with the provisions of Section 11.2.2 of this Agreement; including
the right to grant sublicenses to Affiliates and Third Party contractors as set
forth in Section 2.4, under the HYSEQ Patents and HYSEQ Know-How to perform the
following activities: (i) to analyze and use such Project Gene and any
derivatives thereof in accordance with the terms and conditions of this
Agreement, including the Work Plan, (ii) to use, make, create, generate,
produce, breed, test and conduct research and development activities in
connection with Project Knock-Out Mice and progeny and other derivatives thereof
in accordance with the terms and conditions of this Agreement, including the
Work Plan, (iii) to use, make, generate, produce, create, isolate, purify,
identify and conduct research and development activities in connection with such
Project Gene (and/or any mutation, fragment, allelic variant, analog, homolog or
ortholog of such Project Gene and/or any expression products (including any
Secreted Proteins, Derivative Proteins and/or Products) and/or derivatives
thereof in accordance with the terms and conditions of this Agreement, including
the Work Plan, and (iv) subject to a separate agreement entered into in
accordance with Article 6, to develop, make, have made, use, distribute, offer
for sale, import, export and sell Products. If the license under this Section
2.1.3 has terminated in accordance with (a) or (b) above, such license shall
again become effective until termination in accordance with (a) or (b) if, in
accordance with either Section 5.5.3.1 or Section 5.5.3.2 of this Agreement, the
Steering Committee votes to designate a particular Rejected Project Gene a
Project Gene again under this Agreement.
2.1.4 REJECTED PROJECT GENES.
(a) On a Rejected Project Gene-by-Rejected Project Gene
basis, and upon designation of a Project Gene as a Rejected Project Gene under
this Agreement, a co-exclusive internal use license until the expiration of the
Restriction Term (at which time the license under
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Section 2.1.4(b) shall become effective unless the Steering Committee has
otherwise designated the Rejected Project Gene under Section 5.5.3 and then the
terms of that Section shall be controlling) for research purposes only to the
Rejected Project Gene and its related Project Murine Gene under the HYSEQ
Patents and HYSEQ Know-How to allow DELTAGEN to conduct similar research
activities for itself during the Restriction Term as contemplated for Project
Knock-Out Mice and Project Genes under this Agreement.
(b) On a Rejected Project Gene-by-Rejected Project Gene
basis pursuant to the procedure set forth in Section 5.5.3, and upon the
expiration of the Restriction Term, a non-exclusive right and license, including
the right to grant sublicenses (which sublicenses may include the right to grant
further sublicenses) under the HYSEQ Patents and HYSEQ Know-How to perform the
following activities: (i) to analyze and use such Rejected Project Gene and any
derivatives, (ii) to use, make, create, generate, produce, breed, test and
conduct research and development, (iii) to use, make, generate, produce, create,
isolate, purify, identify and conduct research and development, and (iv) to
develop, make, have made, use, distribute, offer for sale, import, export and
sell products that contain as an active ingredient such Rejected Project Gene, a
protein encoded by such Rejected Project Gene (or portion thereof), or an
agonist or antagonist (including, without limitation, anti-sense, antibodies and
small molecules) of a protein encoded by such Rejected Project Gene. Upon and
after grant of such a license to a Rejected Project Gene under this Section
2.14(b) for which HYSEQ has royalty obligations to a Third Party, DELTAGEN will
(i) notify HYSEQ when any and all sublicenses are granted, (ii) notify HYSEQ
upon commencement of sales of any and all products that contain as an active
ingredient a Rejected Project Gene, a protein encoded by such Rejected Project
Gene (or portion thereof), or an agonist or antagonist (including, without
limitation, anti-sense, antibodies and small molecules) of a protein encoded by
such Rejected Project Gene, (iii) calculate and reimburse HYSEQ for any and all
royalty payments that HYSEQ is obligated to pay to any Third Party as a result
of sales of such a product by or on behalf of DELTAGEN, DELTAGEN's Affiliates or
DELTAGEN's sublicensees, within thirty (30) days after the date such payments
are required and in accordance with a royalty formula to be provided by HYSEQ,
and (iv) keep complete and accurate records of sales of any such products and
allow a reasonable yearly audit by a third party independent auditor of such
records, (at DELTAGEN's expense if the results
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show an error in favor of HYSEQ), in order to verify sales subject to the
royalty obligation. In addition to any other remedies available to HYSEQ under
this Agreement, HYSEQ shall have the right to terminate the license under this
paragraph upon written notice to DELTAGEN if DELTAGEN materially breaches its
obligations to reimburse HYSEQ for royalties under this Section 2.1.4(b).
2.2 CO-EXCLUSIVE LICENSE. The term "co-exclusive" as used herein shall
operate to exclude all other Persons, except for HYSEQ or DELTAGEN, as
applicable.
2.3 DELTAGEN LICENSE. Subject to the terms and conditions of this
Agreement, DELTAGEN hereby grants to HYSEQ the following licenses:
2.3.1 PROJECT GENES. On a Project Gene-by-Project Gene basis, and
upon designation of a Proposed Gene as a Project Gene under this Agreement, a
co-exclusive right and license until the earlier of (a) the date upon which such
Project Gene becomes a Rejected Project Gene, or (b) termination of the
collaboration in accordance with the provisions of Section 11.2.2 of this
Agreement; including the right to grant sublicenses to Affiliates and Third
Partycontractors as set forth in Section 2.4, under the DELTAGEN Knock-Out
Technology and DELTAGEN Project Intellectual Property, and subject to a separate
agreement entered into in accordance with Article 6, to develop, make, have
made, use, distribute, offer for sale, import, export and sell Products.
2.3.2 REJECTED PROJECT GENES
(a) On a Rejected Project Gene-by-Rejected Project Gene
basis, and upon designation of a Project Gene as a Rejected Project Gene under
this Agreement, a co-exclusive internal use license until the expiration of the
Restriction Term (at which time the license under Section 2.3.2(b) shall become
effective unless the Steering Committee has otherwise designated the Rejected
Project Gene under Section 5.5.3 and then the terms of that Section shall be
controlling) for research purposes only to the Rejected Project Gene and its
related Project Murine Gene under the DELTAGEN Knock-Out Technology and DELTAGEN
Project Intellectual Property to allow HYSEQ to conduct similar research
activities for itself during the Restriction Term as contemplated for Project
Knock-Out Mice and Project Genes under this Agreement.
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(b) On a Rejected Project Gene-by-Rejected Project Gene
basis pursuant to the procedure set forth in Section 5.5.3, and upon the
expiration of the Restriction Term, a non-exclusive right and license, including
the right to grant sublicenses (which sublicenses may include the right to grant
further sublicenses) under the DELTAGEN Knock-Out Technology and DELTAGEN
Project Intellectual Property to perform the following activities: (i) to
analyze and use such Rejected Project Gene and any derivatives, (ii) to use,
make, create, generate, produce, breed, test and conduct research and
development, (iii) to use, make, generate, produce, create, isolate, purify,
identify and conduct research and development, and (iv) to develop, make, have
made, use, distribute, offer for sale, import, export and sell products that
contain as an active ingredient a Rejected Project Gene, a protein encoded by
such Rejected Project Gene (or portion thereof), or an agonist or antagonist
(including, without limitation, anti-sense, antibodies and small molecules) of a
protein encoded by such Rejected Project Gene.
2.4 SUBLICENSES. The licenses granted to each Party pursuant to Sections
2.1.3, 2.1.4(b), 2.3.1 and 2.3.2(b) include the right to sublicense all or part
of such rights to such Party's Affiliates and/or to Third Party contractors to
perform any obligations of such Party under the Development Program (with
respect to Sections 2.1.3 and 2.3.1), provided that such Party provides written
notice to the other Party of any such sublicense and the terms and conditions of
such grant of sublicense (i) are consistent with and do not violate the terms
and conditions of this Agreement, and (ii) ensure that such Persons are
obligated in writing to comply with the terms and conditions of this Agreement,
including being bound by obligations of confidentiality which are comparable to,
or more stringent than, the provisions of Article 9. Notwithstanding anything to
the contrary in this Agreement, if the Steering Committee designates a Proposed
Gene as a Project Gene for work by DELTAGEN after being informed pursuant to
Section 4.1.3 that HYSEQ has already submitted the corresponding Proposed Gene
to a Third Party contractor for analysis under a legally binding contract for
such Proposed Gene, then HYSEQ shall be authorized under this paragraph to
license or sublicense to the Third Party contractor for the purposes of
conducting such analysis. The results of such analysis shall be reported to the
Steering Committee.
2.5 NO IMPLIED RIGHTS OR LICENSES. No right or license is granted under
this Agreement
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by either Party to the other Party, either expressly or by implication, except
as expressly set forth herein.
2.6 OTHER ACTIVITIES OF THE PARTIES. During the Term, neither Party
shall, either itself or through or with any Affiliate or Third Party, (a) use or
conduct any [***] with respect to any Proposed Genes (unless and until such
Proposed Genes are Rejected Project Genes), Project Genes, Project Knock-Out
Mice, Project Murine Genes, Secreted Proteins, Derivative Proteins, Secreted
Protein Candidates or Products, except if and to the extent expressly permitted
under this Agreement or as otherwise mutually agreed by the Parties in writing,
whether pursuant to Article 6 or otherwise; or (b) [***] any Proposed Genes
(unless and until such Proposed Genes are Rejected Project), Project Genes,
Project Knock-Out Mice, Project Murine Genes, Secreted Proteins, Derivative
Proteins, Secreted Protein Candidates or Products that are subject to this
Agreement, including with respect to any progeny, mutations, fragments, allelic
variants, analogs, homologs or orthologs, and/or any expression products
(including any such Secreted Proteins, Derivative Proteins and/or Products) or
derivatives of any of the foregoing.
ARTICLE 3
DEVELOPMENT PROGRAM AND STEERING COMMITTEE
3.1 DEVELOPMENT PROGRAM.
3.1.1 OVERVIEW OF DEVELOPMENT PROGRAM. HYSEQ and DELTAGEN shall
engage in a development program for the identification, research and development
of Secreted Protein Candidates and Product(s) through the analysis and study of
Project Genes provided by HYSEQ, and to generate, study and analyze Project
Knock-Out Mice from murine genes orthologous to the Project Genes (the
"Development Program"). Deltagen shall use commercially reasonable efforts to
generate ES cells for each of the [***] Project Genes selected pursuant to
Section 4.1.1, with the goal of generating two hundred (200) ES cell lines,
[***]. After identification of Secreted Protein Candidates, the Steering
Committee shall decide whether to conduct further research and development
activities under the Development Program with respect to such Secreted Protein
Candidates (and/or any Products which incorporate such Secreted Protein
Candidates), or to develop and commercialize such Secreted Protein Candidates
(and/or any Products which incorporate such Secreted Protein Candidates),
pursuant to the terms
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and conditions of a separate agreement, whether in a collaboration between the
Parties, or with Third Party partners or licensees or as otherwise determined by
the Steering Committee pursuant to Section 6.2.
3.1.2 DEVELOPMENT PROGRAM COSTS AND EXPENSES. The Parties shall
share [***] all costs and out-of-pocket expenses arising out of the Development
Program other than the activities under Sections 4.1.3 and 5.3, and as otherwise
may be agreed to by the Parties in a separate agreement for the development of a
Secreted Protein Candidate or Product. The costs and expenses of activities
pursuant to Sections 4.1.3 and 5.3 shall be paid for solely by [***].
3.2 COOPERATION AND SHARING OF INFORMATION. The Parties shall cooperate,
coordinate and consult with each other in connection with performing their
activities under the Development Program, including under the Work Plan. Each
Party shall also share with the other Party, as determined by the Steering
Committee, or as reasonably requested by the other Party, data and information
and other Technical Information, derived from their activities under the
Development Program, including with respect to DELTAGEN related data and
information arising in connection with DELTAGEN's analysis and study of the
Project Knock-Out Mice under the Work Plan.
3.2.1 ACCESS TO FACILITIES. Representatives of each Party,
including members of the Steering Committee, may, upon reasonable notice during
normal business hours, (a) visit any facilities where Development Program
activities are being conducted, and (b) consult informally, during such visits
and by telephone, concerning the Development Program. The visiting Party's
representatives shall be advised of, and bound by, the confidentiality
obligations set forth in Article 9 (or confidentiality obligations that are at
least comparable or more stringent than those set forth in Article 9), and shall
follow such security and facility access procedures as directed, and designated
by the Party who's facilities are being visited. The Party whose facilities are
being visited may require that the representatives of the visiting Party be
accompanied by its representatives, at all times while the visiting Party is at
its facilities.
3.2.2 RECORD KEEPING. Each Party shall maintain complete and
accurate records in accordance with its internal practices for keeping such
records, in good scientific manner and in appropriate detail for patent and
regulatory purposes, of its activities conducted
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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under the Development Program and including such data and materials as are
required to be maintained pursuant to applicable laws and regulations. To the
extent practical, such written records shall be kept separately from written
records documenting other activities of each Party and shall be maintained on a
Project-by-Project basis.
3.2.3 COMPLIANCE. Each Party shall, and shall ensure that its
employees, consultants, contractors and agents, perform their respective
activities under the Development Program in accordance with all applicable laws,
rules and regulations in the Territory.
3.2.4 UPDATES AND QUARTERLY AND FINAL REPORTS. Each Party shall
provide updates to the Steering Committee, on at least a monthly basis, and
written reports by the end of each calendar quarter, detailing the then current
status and results of the activities of the Parties under the Development
Program, including with respect to DELTAGEN, the then current status and results
of the First Pass Phenotypic Analysis for each Project, as set forth in Section
5.3.
3.3 STEERING COMMITTEE RESPONSIBILITIES, COMPOSITION AND
PROCEDURES.
3.3.1 ORGANIZATION AND ROLE. DELTAGEN and HYSEQ shall promptly
after the Effective Date organize a steering committee (the "Steering
Committee") to plan, manage and oversee the Development Program. Without
limiting the foregoing, the Steering Committee's responsibilities shall include
the following:
(a) developing, reviewing, updating and modifying in
writing the Work Plan set forth in Exhibit A and developing the mediation
procedure to be set forth in Exhibit B; provided, however, that if the Parties
cannot agree, after good faith efforts, to a time frame for generation of the ES
lines to be generated from the [***] Project Genes under this Agreement, then
the Work Plan shall be deemed to provide that, within [***] from the date
DELTAGEN commences work on such Project Genes, DELTAGEN shall use [***] efforts
to generate ES cells for the first [***] Project Genes (provided all [***]
Project Genes have been designated as such upon the beginning of such [***]
period) and, within an additional [***], DELTAGEN shall use [***] efforts to
generate ES cells for the remaining [***] Project Genes (provided all [***]
remaining Project Genes have been designated as such upon beginning of such
[***] period).
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(b) designating genes as Project Genes from the Proposed
Genes submitted by HYSEQ to the Steering Committee pursuant to Section 4.1;
(c) performing due diligence on each Proposed Gene and
reviewing and determining, based on such due diligence, the relative strength of
any IP positions around any Project Genes under consideration, and including
such determination in the decision whether to designate a Project Gene as a
Secreted Protein Candidate.
(d) determining which Project Genes to submit to DELTAGEN
for further analysis and study under the Development Program pursuant to Section
5.2;
(e) reviewing the First Pass Phenotypic Analysis of each
of the Project Genes submitted to DELTAGEN and determining the necessity of
conducting phenotypic testing, observation, or analysis not included in the
First Pass Phenotypic Analysis (including any further research and development
activities to be conducted by any Third Parties) and which, if any, of such
additional phenotypic tests, observations, or analyses are appropriate, as set
forth in Article 5;
(f) determining the necessity of conducting further
research and development on each of the Project Genes (including any further
research and development activities to be conducted by any Third Parties);
provided, however, that the foregoing shall in no ay limit HYSEQ's right to
independently conduct such further research and development in accordance with
the terms and conditions of this Agreement, such information to be provided to
the Steering Committee for such Project Gene in accordance with the terms and
conditions of this Agreement;
(g) determining, under Section 5.5.1, which, if any, of
the Secreted Proteins together with the Derivative Proteins, will be designated
as "secreted protein candidates";
(h) reviewing the Parties' reports and updates in
connection with their respective activities under the Development Program,
including the reports submitted by DELTAGEN pursuant to Section 5.3; and
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
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AMENDED.
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(i) deciding whether and how to develop any Secreted
Protein Candidates and Products (e.g., whether under a collaboration between the
Parties or with Third Party partners or licensees or otherwise), as set forth in
Article 6.
3.3.2 COMPOSITION. The Steering Committee shall consist of three
(3) members from DELTAGEN and three (3) members from HYSEQ. Each Party shall
have the right to appoint one (1) of its three (3) members to be a
co-chairperson of the Steering Committee. The Parties shall each have the right,
upon notifying the other, to change its members of the Steering Committee at any
time during the Term.
3.3.3 MEETINGS; AND MINUTES. The Parties shall hold meetings of
the Steering Committee as mutually agreed by the Parties (but in no event less
than once each calendar quarter) to review the Development Program and to
discuss future activities under this Agreement. The first meeting of the
Steering Committee shall be held within thirty (30) days of the Effective Date.
Minutes of all meetings setting forth decisions of the Steering Committee,
including with respect to the Development Program, shall be prepared by one of
the Parties, each Party alternating assuming this responsibility at each
meeting, and circulated to both Parties within fifteen (15) days after each
meeting, but minutes shall not become official until approved by both Parties
(which approval the Parties shall use reasonable efforts to give within fifteen
(15) days of receipt of such minutes).
3.3.4 STEERING COMMITTEE DECISIONS. Each vote of the Steering
Committee shall include all current members of the Steering Committee . Except
as otherwise expressly provided for in this Agreement, all decisions of the
Steering Committee shall be by [***] members of the Steering Committee after
good faith discussions. [***] Should, however, the Parties not be able to reach
such [***] despite such good faith efforts, and should a [***] of the Steering
Committee exist thirty (30) days after the date on which a disagreement arose,
then, if the subject matter of the decision is [***] under this Agreement,
including but not limited to decisions as to whether to [***], such disagreement
shall be elevated to the senior executives of the Parties for good faith
discussion to try and reach consensus between the Parties. In the event that the
senior executives have not reached agreement (despite such good faith
discussions) within sixty (60) days after the date on which the disagreement
arose, then (i) if the subject of
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such disagreement is whether or not [***], then such [***] under this Agreement,
and (ii) except as set forth in the preceding subsection (i), unless otherwise
mutually agreed by the Parties, all other disagreements of a material nature
shall be submitted for resolution to the dispute resolution process pursuant to
Section 13.5.
ARTICLE 4
SELECTION OF PROJECT GENES
4.1 STEERING COMMITTEE REVIEW AND SELECTION OF PROPOSED GENES
4.1.1 SUBMITTED GENES. Within [***] after the first Steering
Committee meeting, HYSEQ shall submit in writing to DELTAGEN for its review and
consideration an initial written list(s) of [***] Submitted Genes and, within
[***] after the Effective Date, shall submit in writing to DELTAGEN for its
review and consideration a written list(s) of an additional [***] Submitted
Genes for DELTAGEN to review under this Section 4.1.1. HYSEQ shall use [**]
efforts to submit additional Submitted Genes under this Agreement during such
[***] period to replace Rejected Submitted Genes that DELTAGEN has rejected
under this Section 4.1.1 until [***] Project Genes have been selected. HYSEQ
agrees to [***] when deciding which human gene sequences to include in the list
of Submitted Genes to be submitted to DELTAGEN. Any submission of Submitted
Genes subsequent to such [***] period shall be subject to the approval of the
Steering Committee. All Submitted Genes submitted by HYSEQ to the Steering
Committee under this Section 4.1 shall be accompanied by at least a partial
murine ortholog gene sequence believed by HYSEQ to correspond to the gene
sequence of such Submitted Gene (unless HYSEQ is unable to identify such an
orthologous partial murine gene sequence for a Submitted Gene, in which case
HYSEQ shall report such results to the Steering Committee) and DELTAGEN shall
notify HYSEQ as to whether or not, [***] as of the date of its submission by
HYSEQ. If any of the Submitted Genes have [***], HYSEQ shall provide this
information promptly to the Steering Committee with its information under
Section 4.1.3 and HYSEQ hereby expressly acknowledges and agrees that if the
Steering Committee designates such a Submitted Gene as a Proposed Gene or a
Project Gene, as between DELTAGEN and HYSEQ that HYSEQ is [***], while such
Proposed Gene or Project Gene, as applicable,
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COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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remains under this Agreement, and HYSEQ shall not [***] except as provided in
Section 2.1.4(b) for a Rejected Project Gene.
4.1.2 PROPOSED GENES. DELTAGEN shall notify HYSEQ within thirty
(30) days after its receipt of the Submitted Gene and, if applicable, its
accompanying murine ortholog sequence, whether DELTAGEN accepts or rejects such
Submitted Gene, such acceptance or rejection being within DELTAGEN's sole
discretion.
(a) Any such accepted Submitted Gene for which
notification has been provided shall be deemed a Proposed Gene. Within [***]
after such written notification, HYSEQ will provide to DELTAGEN the supporting
information for such Proposed Gene in accordance with Section 4.1.3.
(b) If DELTAGEN rejects a Submitted Gene such Submitted
Gene shall be deemed a Rejected Submitted Gene. With respect to any such
Rejected Submitted Gene, any of HYSEQ's rights under HYSEQ's Patents or HYSEQ
Know-How related solely to such Submitted Gene shall return to HYSEQ under this
Agreement and shall not be subject to further restriction under this Agreement
other than DELTAGEN's obligations of confidentiality under Article 9 of this
Agreement. Each of the Parties shall perform no additional services under this
Agreement with regard to such Rejected Submitted Gene. Each of the Party's
right, title and interest in and to such Rejected Submitted Gene shall remain
with and vest fully in that Party, and the other Party shall have no right,
title, or interest therein or thereto.
4.1.3 SUPPORTING INFORMATION AND DISCLOSURES. Together with each
written list of Submitted Genes, HYSEQ shall fully disclose to the Steering
Committee in writing or electronic form, with respect to each such Submitted
Gene, the information actually known to HYSEQ regarding such Submitted Gene's
murine ortholog sequence and the results of HYSEQ's Initial Murine Gene
Analysis. With respect to each Proposed Gene, HYSEQ shall disclose to the
Steering Committee in writing or in electronic form the following information
actually known to HYSEQ: (i) any and all Technical Information and Patents
(including but not limited to HYSEQ Patents and HYSEQ Know-How) covering such
Proposed Gene that are owned or controlled by HYSEQ, (ii) any restrictions on
the use of such Proposed Gene, (iii) [***], (iv) any and all facts and
information which are limiting or preventing, or that could or would limit or
prevent,
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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HYSEQ's right or ability to grant the license to DELTAGEN pursuant to Section
2.1, or are causing, [***], and (iv) [***] under this Agreement, including the
following:
(a) any pre-existing or other rights, interests and/or
options in or to, or any other encumbrances (including any liens) on, such
Proposed Gene and/or any HYSEQ Patents or HYSEQ Know-How covering or relating to
such Proposed Gene;
(b) any licenses or other agreements with any Person
relating to such Proposed Gene (including any in-licensed technology relating to
such Proposed Gene), or relating to the HYSEQ Patents or HYSEQ Know-How covering
or relating to such Proposed Gene; and
(c) any [***] of such Proposed Gene and/or any HYSEQ
Patents or HYSEQ Know-How covering or relating to such Proposed Gene. HYSEQ
shall also provide further information, as may reasonably be requested by the
Steering Committee, and if requested, shall make available to the Steering
Committee the appropriate technical and other HYSEQ employees to answer
questions posed by the Steering Committee with respect to the Proposed Genes and
the information and disclosures submitted under this Section 4.1.3. With respect
to a Proposed Gene, if HYSEQ makes a [***] in writing pursuant to this Section
4.1.3 of [***], prior to or concurrently with its submission to the Steering
Committee of such Proposed Gene, HYSEQ [***]; provided that DELTAGEN shall have
the right to refuse to conduct any activities with respect to such Proposed
Gene, if DELTAGEN, in its sole discretion, so chooses, under this Section 4.1.3
or Section 4.1.1 above, either due to HYSEQ's inability to provide information,
or as a result of the information provided by HYSEQ or information DELTAGEN
acquires independently of HYSEQ. If DELTAGEN chooses to not conduct any
activities with respect to such Proposed Gene under this Section 4.1.3, such
Proposed Gene shall become a Rejected Proposed Gene in accordance with the terms
and conditions of Section 4.3 of this Agreement. DELTAGEN may also choose not to
continue with a Proposed Gene under this Agreement if technical obstacles make
it commercially reasonable not to proceed. In such event, DELTAGEN shall notify
the Steering Committee, and the Steering Committee may vote affirmatively to
continue with such Proposed Gene as a Project Gene with a [***] sharing between
the Parties of all costs arising from such technical obstacles.
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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4.2 SELECTION OF PROJECT GENES. After reviewing a Proposed Gene and the
information and disclosures received from HYSEQ pursuant to Sections 4.1.1 and
4.1.3, and the information and reports received from DELTAGEN, and if
applicable, HYSEQ, pursuant to Sections 4.1.3 with respect to such Proposed
Gene, the Steering Committee members shall vote on whether to include such
Proposed Gene as a "project gene" hereunder. If the Steering Committee members
vote affirmatively to include a Proposed Gene as a "project gene" under this
Agreement, then upon such vote, such Proposed Gene shall become a Project Gene.
4.3 REJECTED PROPOSED GENES. Unless otherwise decided by the Parties or
the Steering Committee, any Proposed Gene which (i) DELTAGEN has notified HYSEQ
it shall not work on under this Agreement (ii) the Steering Committee members
have voted to reject as a "project gene," and/or (iii) the Steering Committee
members have not voted affirmatively to include as a "project gene" under this
Agreement within ninety (90) days after submission of information regarding the
Proposed Gene to the Steering Committee pursuant to Section 4.1.3, shall be a
"Rejected Proposed Gene." Each of the Parties shall perform no additional
services under this Agreement with regard to such Rejected Proposed Gene. Each
of the Party's right, title and interest in and to such Rejected Proposed Gene
(if any) shall remain with and vest fully in that Party, and the other Party
shall have no right, title, or interest therein or thereto.
ARTICLE 5
HYSEQ FUNDING AND DEVELOPMENT PROGRAM ACTIVITIES
5.1 HYSEQ DEVELOPMENT FUNDING. As partial consideration for the research
and development activities to be conducted by DELTAGEN under this Agreement,
HYSEQ shall pay DELTAGEN as follows:
(a) within [***] after the Effective Date, HYSEQ shall pay
to DELTAGEN [***] U.S. Dollars (U.S.$[***]) ("Payment One");
(b) within [***] of the Effective Date, HYSEQ shall pay to
DELTAGEN [***] U.S. Dollars (U.S.$[***]) ("Payment Two") if the Steering
Committee has designated [***] two hundred (200) Project Genes within [***]
after the Effective Date; provided, however, if the Steering Committee has
designated [***] as provided for under this Agreement, but the
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Steering Committee has designated [***] designated during such period, plus
[***] as represented by the following formula:
[***];
(c) within [***] of the Effective Date, HYSEQ shall pay to
DELTAGEN [***] U.S. Dollars (U.S.$[***]) ("Payment Three") if DELTAGEN has
created two hundred (200) ES cell lines for Project Genes; provided, however,
that if DELTAGEN has [***], as represented by the following formula:
[***]; and
(d) within twenty-four (24) months after the Effective
Date, HYSEQ shall pay to DELTAGEN the remaining amount of a pro-rated Ten
Million U.S. Dollars (U.S.$10,000,000) ("Total Payment") calculated by the
following formula:
[***].
HYSEQ acknowledges and agrees that the payments payable to DELTAGEN pursuant to
this Section are non-refundable, and may be used and disposed of as DELTAGEN, in
its reasonable business judgment, determines is appropriate in accordance with
the terms and conditions of this Agreement.
5.2 INITIATION OF PROJECTS; AND PERFORMANCE AND DELAYS. The Steering
Committee shall determine which Projects to submit to DELTAGEN to initiate work
on such Projects under the Development Program. Each Party shall use reasonable
commercial efforts to fulfill their obligations with respect to each Project as
set forth herein (including the Work Plan), and to perform its other obligations
under this Agreement; provided that, with respect to DELTAGEN's activities under
the Development Program, HYSEQ acknowledges and agrees that the performance of
such activities may involve a number of technologically complex steps and that
any time periods for performance, whether set out in the Work Plan or elsewhere
in this Agreement, may be subject to change due to potential technological
difficulties encountered, and any such delays or technical issues shall not be
considered a breach by DELTAGEN under this Agreement. If a Project is delayed
because either Party determines that there are any technical issues with respect
to a Project of a material nature, it shall notify the Steering Committee in
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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writing describing the delayed task and the reasons for such delay. After
receiving such notice, if necessary, the Steering Committee shall meet to review
the reason for such delays and any technical issues raised by the notifying
Party, to consider how best to proceed and whether to modify the Work Plan
(including to adjust any timelines contained therein), if and to the extent
necessary. If requested by the Steering Committee, the Parties shall provide
information to the Steering Committee to assist it in its review of the Project.
The Steering Committee may vote at any time to discontinue or suspend a Project
if the Steering Committee determines that it is commercially reasonable or
necessary to do so. DELTAGEN may determine, in its reasonable business judgment,
to [***] Project [***]; provided, however, that DELTAGEN shall notify HYSEQ in
writing within three (3) business days of such determination and shall [***]
Project [***]. Upon such decision by the Steering Committee or DELTAGEN, as
applicable, to [***] Project, the applicable Project Gene shall immediately
become a Rejected Project Gene.
5.3 GENERATION AND TESTING OF PROJECT KNOCK-OUT MICE; AND FIRST PASS
PHENOTYPIC ANALYSIS; AND UPDATES AND REPORTS.
5.3.1 CERTAIN DELTAGEN ACTIVITIES. For each Project initiated by
the Steering Committee pursuant to Section 5.2, DELTAGEN shall, as set out in
the Work Plan, use [***] efforts to: (i) [***] to create and generate a
corresponding Project Knock-Out Mouse, (ii) generate Project Knock-Out Mice
[***] Project Knock-Out Mouse [***] using the Project Murine Gene that is
orthologous to the Project Gene which is the subject of the Project; and (iii)
conduct a First Pass Phenotypic Analysis of such Project Knock-Out Mice. Exhibit
A may be reasonably modified in writing from time to time [***] to add tests,
observations and/or analyses to be performed by DELTAGEN at any time under this
Agreement and DELTAGEN shall notify HYSEQ of such changes as part of its report
regarding First Pass Phenotypic Analysis.
5.3.2 UPDATES. Within ten (10) days after the end of each
calendar quarter, DELTAGEN shall provide all Steering Committee members with a
written report describing the status, and expected completion date, of its work
on each Project under the Work Plan and with data from any portion(s) of the
First Pass Phenotypic Analysis completed on a Project during the just-ended
Calendar Quarter, if any, and if it has not already provided such information to
the Steering Committee. If and as reasonably requested by the Steering
Committee, DELTAGEN
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shall make persons working on its behalf on a Project available during normal
business hours for a reasonable number of consultations with the Steering
Committee regarding such Project. Such consultations will either be in-person at
such person's place of employment or via videoconference or teleconference.
5.3.3 FIRST PASS PHENOTYPIC ANALYSIS REPORT. Once DELTAGEN
completes the First Pass Phenotypic Analysis on a Project under the Work Plan,
it shall (to the extent not already provided pursuant to Section 5.3.2) submit
to the Steering Committee for the Steering Committee's review a final report of
the results of such Project.
5.4 ADDITIONAL TESTING; COSTS.
5.4.1 ADDITIONAL TESTING. If, at any time during this Agreement,
HYSEQ or DELTAGEN believes an additional test, observation, or analysis not
included in the First Pass Phenotypic Analysis, or covered by the Work Plan
would be useful to a Project, the Party may submit its proposal to the Steering
Committee for the Steering Committee's approval. If the Steering Committee
approves any such additional tests, observations, or analysis requested by
either Party, or if the Steering Committee determines that it is necessary to
assist it with determining whether to designate as a "secreted protein
candidate," a Secreted Protein produced by the Project Gene that is the subject
of such Project, the Steering Committee may request that DELTAGEN or HYSEQ
perform additional assays, including phenotypic tests, observations, or analyses
not included in the First Pass Phenotypic Analysis on such Project
(collectively, "Additional Tests"). DELTAGEN or HYSEQ, as applicable, shall
perform the Additional Tests, as requested by the Steering Committee pursuant to
this Section; provided that the Parties shall share the costs as set forth in
Section 5.4.2. Once DELTAGEN or HYSEQ, as applicable, has completed such
Additional Tests on a Project, DELTAGEN or HYSEQ, as applicable, shall submit to
the Steering Committee for the Steering Committee's review of the Project under
Section 5.5 a report of the results of such additional services.
5.4.2 SHARING OF COSTS. HYSEQ or DELTAGEN, as applicable, shall
reimburse the Party performing the Additional Tests for [***] of the reasonable
costs (including FTEs) and reasonable out-of-pocket expenses incurred in
performing the Additional Tests, within thirty (30) days of HYSEQ's or
DELTAGEN's, as applicable, receipt of an invoice from
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the Party performing the Additional Tests, including reasonable supporting
documentation, covering such costs and out-of-pocket expenses incurred in
connection with conducting such activities under this Agreement. In the event
there is a good faith dispute over an amount owed by a Party under this Section
5.4.2, the disputed portion of the payment may be delayed, and such payment
shall not be considered delinquent pending a resolution of the Parties' dispute.
5.5 DESIGNATION OF SECRETED PROTEIN CANDIDATES; DESIGNATION GUIDELINES.
5.5.1 DESIGNATION OF SECRETED PROTEIN CANDIDATES. After reviewing
the information provided to it pursuant to Sections 3.2.4, 5.3 and 5.4, with
respect to a Project, the Steering Committee members shall vote whether to
designate the Secreted Protein produced by the Project Gene which is the subject
of such Project, together with its Derivative Proteins, as a "secreted protein
candidate." If the Steering Committee members vote affirmatively, within [***]
after receiving such information provided to it regarding a Secreted Protein, a
Secreted Protein shall be a Secreted Protein Candidate hereunder. If less than
[***] of the Steering Committee members vote affirmatively to designate a
Secreted Protein as a Secreted Protein Candidate or if the Steering Committee
fails to vote affirmatively within such [***] period to designate a Secreted
Protein as a Secreted Protein Candidate, then the Project Gene that produced
such Secreted Protein shall immediately become a Rejected Project Gene.
5.5.2 DESIGNATION GUIDELINES. A Steering Committee member's
standard for voting to designate a Project Gene's Secreted Protein as a
"secreted protein candidate" shall be a good faith belief that, based on the
First Pass Phenotypic Analysis (and any additional testing, observation, and
analysis requested by the Steering Committee pursuant to Section 5.4), the
Project Knock-Out Mice that is the subject of such Project (whether at the
heterozygous or homozygous gene knock-out stage) manifest, either [***], a
morphological, physiological, or pathophysiological phenotypic change that [***]
Secreted Protein. Examples of a morphological, physiological, or
pathophysiological phenotypic change that [***] Secreted Protein [***].
5.5.3 REJECTED PROJECT GENE. Unless otherwise decided by the
Parties or the Steering Committee, any Project Gene which (i) the Steering
Committee members have voted to [***]," (ii) the Steering Committee members have
not voted [***] under this Agreement within
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[***] of its submission to the Steering Committee pursuant to Section 5.5.1,
and/or (iii) has been [***] Steering Committee, [***] "Rejected Project Gene."
Neither Party shall [***] Affiliates or Third Parties any of the Project
Intellectual Property [***] Project Gene [***] Rejected Project Gene [***]
Restriction Term.
5.5.3.1 DURING RESTRICTION TERM. If, during the Restriction Term,
either Party obtains [***] on a Rejected Project Gene, such Party may present
such Rejected Project Gene to the Steering Committee for another vote on whether
to designate such Rejected Project Gene as a Secreted Protein Candidate. At the
time of presentation of a Rejected Project Gene to the Steering Committee, each
of the Parties must disclose to the other Party the [***] Rejected Project
Gene,[***] performed during the Restriction Term.
5.5.3.2 EXPIRATION OF RESTRICTION TERM. Upon expiration of
the Restriction Term for any Rejected Project Gene, each Party must disclose to
the other Party the [***] Rejected Project Gene [***] Restriction Term, and the
Steering Committee shall determine if such Rejected Project Gene shall be
further analyzed and studied under the Development Program.
5.5.3.3 STEERING COMMITTEE VOTE ON REJECTED PROJECT GENE.
If the Steering Committee votes to return a Rejected Project Gene to the
Development Program, the license grants under Sections 2.1.3 and 2.3.1 shall
again become effective in accordance with their terms. If the Steering Committee
cannot reach an agreement on a Rejected Project Gene presented to it under this
Section 5.5.3, the Chief Executive Officers of the Parties shall make such
determination. If the Chief Executive Officers cannot reach an agreement on such
Rejected Project Gene, then such determination shall not be subject to the
dispute resolution procedure set forth in Section 13.5, but rather: (a) if
DELTAGEN votes not to return such Rejected Project Gene to the Development
Program and HYSEQ votes to return such Rejected Project Gene to the Development
Program, then DELTAGEN hereby grants to HYSEQ a worldwide, royalty-free,
perpetual, non-exclusive license under DELTAGEN Project Intellectual Property
and DELTAGEN Knock-Out Technology relating to such Rejected Project Gene to use
Project Knockout Mice and to make, have made, use, sell, distribute, import, and
market products that contains as an active ingredient a Rejected Project Gene, a
protein encoded by such Rejected
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Project Gene (or portion thereof), or an agonist or antagonist (including,
without limitation, anti-sense, antibodies and small molecules) of a protein
encoded by such Rejected Project Gene; or (b) if HYSEQ votes not to return such
Rejected Project Gene to the Development Program and DELTAGEN votes to return
such Rejected Project Gene to the Development Program, then HYSEQ hereby grants
to DELTAGEN a worldwide, royalty-free, perpetual, non-exclusive license under
HYSEQ Know-How, HYSEQ Patents and HYSEQ Project Intellectual Property relating
to such Rejected Project Gene to use Project Knockout Mice and to make, have
made, use, sell, distribute, import, and market products that contains as an
active ingredient a Rejected Project Gene, a protein encoded by such Rejected
Project Gene (or portion thereof), or an agonist or antagonist (including,
without limitation, anti-sense, antibodies and small molecules) of a protein
encoded by such Rejected Project Gene. If the Party that obtains a non-exclusive
license pursuant to this Section 5.5.3.3 wishes to obtain an exclusive license
to such Rejected Project gene, the Parties shall negotiate in good faith
concerning reasonable commercial terms for such an exclusive license, including,
without limitation, commercially reasonable royalty rates and milestone
payments.
5.5.3.4 MAINTENANCE OF PROJECT KNOCK-OUT MICE. If HYSEQ desires
to maintain the line of a Rejected Project Gene's Project Knock-Out Mouse beyond
the Restriction Term, it shall so notify DELTAGEN in writing prior to the
expiration of the Restriction Term. The Parties shall use good faith efforts to
agree upon an appropriate manner to preserve the Project Knock-Out Mouse, its ES
cells or frozen sperm sufficient to regenerate such Project Knock-Out Mouse, at
HYSEQ's sole cost and expense.
5.5.3.5 RIGHT OF FIRST REFUSAL. If, during the Restriction Term,
a Third Party approaches a Party ("Approached Party") and presents a [***], such
Approached Party shall [***]
ARTICLE 6
COMMERCIALIZATION AND OTHER ACTIVITIES
6.1 FURTHER RESEARCH AND DEVELOPMENT OF A SECRETED PROTEIN CANDIDATE.
6.1.1 FURTHER DEVELOPMENT ACTIVITIES. Once a Secreted Protein
Candidate has been designated by the Steering Committee pursuant to Section 5.5,
the Steering Committee
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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shall either modify the Work Plan, or create a separate work plan, if and as may
be appropriate, to outline the scope of development activities and the
responsibilities of the Parties with respect thereto and the Parties shall enter
into a separate agreement with respect to development and commercialization of
such Secreted Protein Candidate Product derived therefrom. Unless otherwise
decided by the Parties, the Parties shall [***] share all costs (including FTEs)
and out-of-pocket expenses associated with conducting such research and
development activities on a [***] basis, in accordance with the procedures set
forth in Section 6.1.2.
6.1.2 ACCOUNTING OF SHARED COST; AND REPORTS. All costs and
out-of-pocket expenses that are to be shared by the Parties on a [***] basis
pursuant to Section 3.1.2, ("Shared Costs") shall be reviewed by the Parties
each calendar quarter to determine the amount of Shared Costs incurred by each
Party for such calendar quarter hereunder. Within sixty (60) days of the end of
each calendar quarter (or as otherwise mutually agreed by the Parties), each
Party shall provide to the other Party and the Steering Committee a report
detailing the total Shared Costs incurred by it, with respect to Section 6.1.1
on a Secreted Protein Candidate-by-Secreted Protein Candidate basis and for
Products incorporating such Secreted Protein Candidate whose apportionment of
costs are not otherwise the subject of a separate agreement between the Parties
(or, if applicable, between a Party and its Affiliate and/or a Third Party), on
a Product-by-Product basis, and:
(a) if DELTAGEN incurred more than [***] of the total
Shared Costs for a calendar quarter, then DELTAGEN shall invoice HYSEQ for the
amount representing the difference between the percentage paid by DELTAGEN and
the [***] (the "HYSEQ Deficiency") and HYSEQ shall pay DELTAGEN the HYSEQ
Deficiency within thirty (30) days of its receipt of such invoice; or
(b) if HYSEQ incurred more than [***] of the total Shared
Costs for a calendar quarter, then DELTAGEN shall pay HYSEQ the amount
representing the difference between the percentage paid by HYSEQ and the [***]
(the "DELTAGEN Deficiency") within thirty (30) days of notifying HYSEQ of the
total Shared Costs incurred by the Parties. In the event there is a good faith
dispute over an amount owed by HYSEQ under this Section 6.1.2, the disputed
portion of the payment may be delayed, and such payment shall not be
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
27
considered delinquent pending a resolution of the Parties' dispute, other than
with respect to the terms and conditions of Section 13.7.
6.2 COMMERCIALIZATION OF SECRETED PROTEIN CANDIDATES AND PRODUCTS. If
the Steering Committee decides not to conduct further development activities
with respect to a Secreted Protein Candidate or any Products identified by
either Party under the Development Program that utilize such Secreted Protein
Candidate, the Parties shall, through the Steering Committee, hold good faith
discussions to determine how, and whether, to proceed with further development
and/or commercialization of any such Secreted Protein Candidate (and/or any
identified Products that utilize such Secreted Protein Candidate), either
themselves or through or with any Affiliate and/or Third Parties. Any such
development and/or commercialization activities shall be conducted pursuant to
the terms and conditions of a separate agreement to be negotiated between the
Parties and any other relevant parties to such agreement(s). If the Parties
decide not to proceed under this Section 6.2, and if neither of the Parties
invokes the provisions of Section 6.3 below, then upon the expiration of the
[***] period provided for in Section 6.3.1 the applicable Project Gene shall
become a Rejected Project Gene under this Agreement.
6.3 DEADLOCK.
6.3.1 SUBMISSION OF TERM SHEET TO STEERING COMMITTEE. If the
Steering Committee is unable to agree on how to proceed with respect to a
Secreted Protein Candidate (or any Products identified by either Party under the
Development Program that utilize such Secreted Protein Candidate) pursuant to
Section 6.2 within [***] of first considering such Secreted Protein Candidate
(or its corresponding Product(s)), then within [***] of such DATE, each Party
may, if it so chooses, present to the Steering Committee a proposed term sheet (
a "Proposed Term Sheet") that sets out terms and conditions under which such
Party wishes to develop and commercialize such Secreted Protein Candidate
(and/or any Products identified by either Party under the Development Program
that utilize such Secreted Protein Candidate) which the submitting Party would
like to pursue itself or with or through an Affiliate and/or Third Party. Any
such Proposed Term Sheet submitted to the Steering Committee by a Party shall
include commercially reasonable terms and conditions and shall provide for
sufficient consideration to the other Party (the "non-Participating Party") for
its contributions under this
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Agreement and for any licenses to any Project Intellectual Property and/or
Project Patents that such Party may request from the non-Participating Party,
including commercially reasonable royalties, development and marketing
milestones and sublicensing revenue shares and objective performance
obligations. The Steering Committee shall review and consider any Proposed Term
Sheet submitted by a Party and shall use good faith efforts to approve one of
the Party's Proposed Term Sheet (but shall have no obligation to do so). If the
Steering Committee votes and approves a Party's Proposed Term Sheet, such Party
is authorized to negotiate an agreement based upon such Proposed Term Sheet, the
Party may proceed with such negotiations, but shall provide the Steering
Committee with a copy of the Agreement prior to signing for final review and
approval (such approval not to be unreasonably withheld or delayed). Subject to
any confidentiality obligations to which a Party may be bound, such Party shall
keep the Steering Committee updated with respect to such negotiations, if and as
reasonably requested by the Steering Committee. If at any time during the Term,
each Party agrees to submit a Proposed Term Sheet to the Steering Committee
under this Section 6.3.1, and the Steering Committee rejects both, or does not
approve either, Party's Proposed Term Sheets, then either Party may initiate the
mediation procedure under Section 6.3.2 upon written notice to the other Party.
If only one Party submits a Proposed Term Sheet to the Steering Committee, and
the Steering Committee rejects such Party's Proposed Term Sheet, or neither
Party submits a Proposed Term Sheet, then neither Party may initiate the
mediation procedure under Section 6.3.2 or proceed or conduct any development or
commercialization activities with respect to such Secreted Protein Candidate (or
any Products that utilize such Secreted Protein Candidate) except as authorized
by the Steering Committee or as mutually agreed by the Parties in writing;
provided that if the Parties both agree at a later date to submit Proposed Term
Sheets to the Steering Committee covering the development and/or
commercialization of such Secreted Protein Candidate (or any Products that
utilize such Secreted Protein Candidate) under this Section, then the Parties
can at that time initiate the mediation procedure under Section 6.3.2 on written
notice to the other Party if the Steering Committee rejects both, or does not
approve either, Party's Proposed Term Sheets.
6.3.2 THIRD PARTY MEDIATION. Upon a Party's receipt of a notice
from the other Party initiating the mediation procedures under this Section, the
Parties shall meet to attempt in
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
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AMENDED.
29
good faith to resolve this matter through face-to-face negotiations between
senior executives of HYSEQ and DELTAGEN, including consideration of any Proposed
Term Sheets. If the matter is not resolved within thirty (30) days (or such
other period of time mutually agreed upon by the Parties) of commencing such
face-to-face negotiations, or if the Party against which a claim has been
asserted refuses to attend such negotiations or does not otherwise participate
in such negotiations within thirty (30) days (or such other period of time
mutually agreed upon by the Parties) from the date of notice of to the other
Party under this Section 6.3.2, then either Party may initiate the procedures
set forth on Exhibit B upon notice to the other Party.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 HYSEQ REPRESENTATIONS AND WARRANTIES. As of the Effective date and
during the Term (unless expressly stated in this Section 7.1), HYSEQ hereby
represents and warrants the following to DELTAGEN:
7.1.1 HYSEQ is (i) a company duly organized, validly existing,
and in good standing under the laws of Nevada with its respective principal
place of business as indicated in the first paragraph of this Agreement; (ii)
duly qualified as a corporation and in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, where the failure to be so qualified would
have a material adverse effect on its financial condition or its ability to
perform its obligations hereunder; (iii) has the requisite corporate power and
authority and the legal right to conduct its business as now conducted and
hereafter contemplated to be conducted; (iv) has all necessary licenses,
permits, consents, or approvals from or by, and has made all necessary notices
to, all governmental authorities having jurisdiction, to the extent required for
such ownership and operation; and (v) is in compliance with its certificate of
incorporation and by-laws.
7.1.2 The execution, delivery and performance of this Agreement
by HYSEQ and all documents to be delivered by HYSEQ hereunder: (i) are within
the corporate power of HYSEQ; (ii) have been duly authorized by all necessary or
proper corporate action; (iii) are not in contravention of any provision of the
certificate of incorporation or by-laws of HYSEQ; (iv) will not violate any law
or regulation or any order or decree of any court of governmental
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
30
instrumentality; (v) will not violate the terms of any indenture, mortgage, deed
of trust, lease, agreement, or other instrument to which HYSEQ is a party or by
which HYSEQ or any of its property is bound; and (vi) do not require any filing
or registration with or the consent or approval of, any governmental body,
agency, authority or any other Person, which has not been made or obtained
previously.
7.1.3 This Agreement has been duly executed and delivered by
HYSEQ and constitutes a legal, valid and binding obligation of both HYSEQ,
enforceable against both and either of HYSEQ in accordance with its terms.
7.1.4 Except as expressly provided on Exhibit D, (which may be
modified in accordance with the terms and conditions of this Agreement for a
particular Submitted Gene up until the time that information is submitted for a
Proposed Gene under Section 4.1.3), HYSEQ is the sole and exclusive owner of the
entire right, title and interest in and to the HYSEQ Patents and the HYSEQ
Know-How, free and clear of any liens or other encumbrances, and no other Person
(including any government or university) has any license, claim or other right
or interest in or to any HYSEQ Patents or the HYSEQ Know-How. The HYSEQ Patents
and the HYSEQ Know-How may be co-exclusively licensed to DELTAGEN hereunder, and
as contemplated under Article 6 under a separate agreement to commercialize
Secreted Protein Candidate and/or Products, without payment of any royalty, fee
or incurring any other obligation to any other Person (including any government
or university).
7.1.5 HYSEQ has disclosed or made available to DELTAGEN, to the
extent of HYSEQ's actual knowledge, all information relevant to [***].
7.1.6 HYSEQ has disclosed or made available to DELTAGEN, to the
extent of HYSEQ's actual knowledge, [***].
7.1.7 HYSEQ has disclosed or made available to DELTAGEN, to the
extent of HYSEQ's actual knowledge, all information regarding whether [***]
covered by any HYSEQ Patents or which utilizes any HYSEQ Know-How or any
Proposed Gene (subject to any disclosures made by HYSEQ in writing pursuant to
Section 4.1.3 with respect to any such Proposed Gene), Project Gene, Secreted
Protein or Derivative [***].
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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7.1.8 HYSEQ is not aware of any infringement of the HYSEQ
Patents, or any misappropriation of the HYSEQ Know-How by any Third Party.
7.1.9 Except as provided in the information under Section 4.1.3
submitted for a Proposed Gene pursuant to this Agreement, all of the research
and development work performed in connection with any of the HYSEQ Know-How or
any Submitted Gene, Proposed Genes (subject to any disclosures made by HYSEQ in
writing pursuant to Section 4.1.3 with respect to any such Proposed Gene), or
Project Genes prior to the Effective Date was [***] and was performed in
accordance with applicable law and in compliance with all applicable regulatory
requirements, and all such rights have been properly assigned to HYSEQ including
any and all rights of any consultants of HYSEQ.
7.1.10 HYSEQ follows reasonable commercial practices common in
the industry to protect its proprietary and confidential information, including
requiring its , consultants and agents to be bound in writing by obligations of
confidentiality and non-disclosure, and requiring its employees to assign to it
any and all inventions and discoveries discovered by such employees made within
the scope of, and during their employment, and only disclosing proprietary and
confidential information to Third Parties pursuant to written confidentiality
and non-disclosure agreements.
7.1.11 HYSEQ has not, up through and including the Effective
Date, [***] concerning the activities contemplated by this Agreement which would
be [***] with such information [***] during the Term of this Agreement.
7.2 DELTAGEN REPRESENTATIONS AND WARRANTIES. As of the Effective date
and during the Term(unless expressly stated in this Section 7.2), DELTAGEN
hereby represents and warrants the following to HYSEQ:
7.2.1 DELTAGEN is (i) a company duly organized, validly existing,
and in good standing under the laws of Delaware with its respective principal
place of business as indicated in the first paragraph of this Agreement; (ii)
duly qualified as a corporation and in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, where the failure to be so qualified would
have a material adverse effect on its financial condition or its ability to
perform its obligations
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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hereunder; (iii) has the requisite corporate power and authority and the legal
right to conduct its business as now conducted and hereafter contemplated to be
conducted; (iv) has all necessary licenses, permits, consents, or approvals from
or by, and has made all necessary notices to, all governmental authorities
having jurisdiction, to the extent required for such ownership and operation;
and (v) is in compliance with its certificate of incorporation and by-laws.
7.2.2 The execution, delivery and performance of this Agreement
by DELTAGEN and all documents to be delivered by DELTAGEN hereunder: (i) are
within the corporate power of DELTAGEN; (ii) have been duly authorized by all
necessary or proper corporate action; (iii) are not in contravention of any
provision of the certificate of incorporation or by-laws of DELTAGEN; (iv) will
not violate any law or regulation or any order or decree of any court of
governmental instrumentality; (v) will not violate the terms of any indenture,
mortgage, deed of trust, lease, agreement, or other instrument to which DELTAGEN
is a party or by which DELTAGEN or any of its property is bound; and (vi) do not
require any filing or registration with or the consent or approval of, any
governmental body, agency, authority or any other Person, which has not been
made or obtained previously.
7.2.3 This Agreement has been duly executed and delivered by
DELTAGEN and constitutes a legal, valid and binding obligation of both DELTAGEN,
enforceable against both and either of DELTAGEN in accordance with its terms.
7.2.4 DELTAGEN [***] to protect its proprietary and confidential
information, including requiring its consultants and agents to be bound in
writing by obligations of confidentiality and non-disclosure, and requiring its
employees to assign to it any and all inventions and discoveries discovered by
such employees made within the scope of, and during their employment, and only
disclosing proprietary and confidential information to Third Parties pursuant to
written confidentiality and non-disclosure agreements.
7.2.5 DELTAGEN has not, up through and including the Effective
Date, [***], concerning the activities contemplated by this Agreement which
would be [***] with such information [***] during the Term of this Agreement.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION. Each Party agrees to indemnify and hold forever
harmless the other Party and its Affiliates and each of their agents, directors,
officers, employees, consultants, contractors and (sub)licensees from and
against any loss, damage, action, proceeding, cost, expense or liability
(including reasonable attorneys' fees) (collectively, "Loss") arising from or in
connection with any Third Party claim or action relating to or arising from (a)
the breach of any representation, warranty or covenant of the indemnifying Party
under this Agreement; or (b) the [***] of the indemnifying Party or any its
Affiliates or any of its or its Affiliates' agents, directors, officers,
employees, consultants, contractors and/or (sub)licensees.
8.2 PROCEDURE. The indemnities set forth in this Article 8 are subject
to the condition that the Party seeking indemnity shall (a) promptly notify the
indemnified Party under Section 8.1 (the "Indemnifying Party") on being notified
or otherwise made aware of a suit, action or claim; (b) tender to the
Indemnifying Party control of any proceedings regarding such matter [***];
provided that the Indemnifying Party may not settle the suit or otherwise
consent to any judgment in such suit without the written consent of the
Indemnified Party [***]. The Indemnifying Party has no obligation hereunder in
connection with any settlement made without the Indemnifying Party's written
consent (provided that such consent was not unreasonably withheld). The
non-Indemnifying Party shall cooperate with the Indemnifying Party in the
defense of any Third Party claim, as reasonably requested by the Indemnifying
Party.
8.3 LIMITATIONS ON LIABILITY. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
SECTION 8.1 WITH RESPECT TO THIRD PARTY CLAIMS, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES,
INCLUDING ANY LOSS OF PROFITS OR LOSS OF ANY BUSINESS OPPORTUNITY.
8.4 DISCLAIMERS.
8.4.1 EXCEPT FOR THE WARRANTIES SET FORTH IN ARTICLE 7, NEITHER
PARTY MAKES ANY WARRANTIES HEREUNDER AND EXPRESSLY DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING ANY
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR
PURPOSE.
8.4.2 WITHOUT LIMITING SECTION 8.4.1, HYSEQ HEREBY ACKNOWLEDGES
AND AGREES THAT THE PROJECT KNOCK-OUT MICE AND ANY DERIVATIVES OR PROGENY
THEREOF ARE PROVIDED "AS IS," WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. FURTHERMORE, DELTAGEN MAKES NO REPRESENTATION OR WARRANTY THAT THE USE
OF THE PROJECT KNOCK-OUT MICE AND ANY DERIVATIVES OR PROGENY THEREOF WILL NOT
INFRINGE, MISAPPROPRIATE OR OTHERWISE CONFLICT WITH ANY PATENT OR OTHER
PROPRIETARY RIGHTS OF ANY OTHER PERSON.
ARTICLE 9
CONFIDENTIALITY, PRESS RELEASES AND OTHER DISCLOSURES
9.1 NONDISCLOSURE.
9.1.1 During the Term and for [***] thereafter without regard to
the means of termination, neither DELTAGEN nor HYSEQ shall use for any purpose
other than the purpose of this Agreement or reveal or disclose to any Third
Party information and materials disclosed by, or obtained from, the other Party
(whether prior to or during the Term), and which is marked as "Confidential" or
for information or materials disclosed or obtained orally or otherwise in a
non-written form, which is described or summarized in a writing identified as
"Confidential" and forwarded to the other Party within thirty (30) days of such
disclosure ("Confidential Information") without first obtaining the written
consent of the other Party, except (i) as required by law or court order
(subject to prior notification to the other Party and seeking redaction and
confidential treatment where available); (ii) as required in connection with any
filings made with, or by the disclosure policies of a stock exchange (subject to
prior notification to the other Party and seeking redaction and confidential
treatment where available); and (iii) as expressly permitted under this
Agreement, including as permitted under Section 10.3.5.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
35
9.1.2 The obligations of confidentiality set forth in this
Section 9.1 shall not apply to such information which (a) is or becomes a matter
of public knowledge, through no fault of the receiving Party; (b) is already
rightfully in the possession of the receiving Party without an obligation of
confidentiality at the time of disclosure, as reasonably evidenced by the
receiving Party; (c) is disclosed non-confidentially to the receiving Party by a
Third Party having lawful possession of such information and the right to do so;
or (d) is subsequently and independently developed by employees of the receiving
Party or Affiliates thereof without reference to or knowledge of the
Confidential Information disclosed, as reasonably evidenced by the receiving
Party. The Parties shall take reasonable measures to assure that no unauthorized
use or disclosure is made by others to whom access to such information is
granted.
9.1.3 HYSEQ and DELTAGEN each agree to limit the disclosure of
any Confidential Information of the other Party received or obtained hereunder
to such of its Affiliates and its and its Affiliates' employees, consultants,
sublicensees permitted under Article 2 and agents, as are necessary to carry out
the provisions of this Agreement and who are likewise bound by written
obligations of confidentiality which are comparable to, or more stringent than,
the provisions of this Article 9. Each Party agrees to provide the other Party
with written notice of any such consultants, sublicensees, or agents.
9.2 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Neither Party shall
otherwise issue any press releases or other publicity materials, or make any
public announcements relating to the terms or conditions of this Agreement or
relating to the Development Program or any Confidential Information of the other
Party without the prior written consent of the other Party. This restriction
shall not apply to disclosures required by law or regulation, including as may
be required in connection with any filings made with, or by the disclosure
policies of a stock exchange (subject to prior notification to the other Party
and seeking redaction and confidential treatment where available).
9.3 PUBLICATIONS AND PRESENTATIONS. Without limiting Section 9.2,
neither Party shall make any publications or presentations relating to any
Proposed Genes (unless and until it is a Rejected Proposed Gene), Project Genes,
Project Knockout Mice, Project Murine Genes, Secreted Proteins, Derivative
Proteins, Secreted Protein Candidates or Products or otherwise
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
36
relating to the Development Program or any activities thereunder, including any
of the results or data arising from the activities conducted under Development
Program or containing, disclosing or relating to any Confidential Information of
the other Party, without the other Party's prior written consent.
9.4 TERMINATION. The Parties agree that if this Agreement is terminated,
neither Party shall disclose to any Third Party [***] without the express
written consent of the other Party, and the Parties shall agree on statements
for public disclosure, such agreement not to be unreasonably withheld or
delayed. This restriction shall not apply to disclosures required by law or
regulation.
ARTICLE 10
OWNERSHIP AND RIGHTS
10.1 PROJECT INTELLECTUAL PROPERTY OWNERSHIP AND RIGHTS.
10.1.1 All right, title and interest in and to all inventions,
discoveries, know-how, derivatives and improvements and other Technical
Information (whether or not patentable), conceived, made, created, invented or
developed solely by DELTAGEN in connection with the activities conducted under
the Development Program or otherwise in connection with this Agreement
(including in connection with the selection of the Project Genes pursuant to
Section 4.1) shall be solely owned by DELTAGEN ("DELTAGEN Project Intellectual
Property"). All right, title and interest in and to all inventions, discoveries,
know-how, derivatives and improvements and other Technical Information (whether
or not patentable), conceived, made, created, invented or developed solely by
HYSEQ in connection with the activities conducted in connection with the
Development Program or otherwise in connection with this Agreement (including in
connection with the selection of the Project Genes pursuant to Section 4.1)
shall be solely owned by HYSEQ ("HYSEQ Project Intellectual Property"). All
right, title and interest in and to all inventions, discoveries, know-how,
derivatives and improvements and other Technical Information (whether or not
patentable), conceived, made, created, invented or developed jointly by DELTAGEN
and HYSEQ in connection with the activities conducted in connection with the
Development Program or in otherwise connection with this Agreement (including in
connection with the selection of the Project Genes pursuant to Section 4.1)
shall be jointly owned by
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
37
DELTAGEN and HYSEQ ("Joint Project Intellectual Property"); provided, however,
that Joint Project Intellectual Property relating to the DELTAGEN Knock-Out
Technology, including any methods or processes relating thereto, shall be owned
by, and shall vest solely in, DELTAGEN and shall be deemed "DELTAGEN Project
Intellectual Property". Patents covering HYSEQ Project Intellectual Property
shall be referred to as "HYSEQ Project Patents" and shall be owned by, and shall
vest in, HYSEQ and Patents covering DELTAGEN Project Intellectual Property shall
be referred to as "DELTAGEN Project Patents" and shall be owned by and shall
vest in, DELTAGEN. Patents covering Joint Project Intellectual Property shall be
referred to as "Joint Project Patents" and shall be jointly owned by, and
jointly vest in, the Parties. The Parties hereby agree that [***] for a Rejected
Project Gene they shall make [***] of Joint Project Intellectual Property,
including Joint Project Patents. If the Parties cannot mutually agree on such
[***], such Joint Project Intellectual Property and Joint Project Patents shall
remain jointly owned by the Parties.
10.1.2 Each Party shall [***] to advise the other Party and the
Steering Committee in writing of any Project Intellectual Property if and as it
arises under the Development Program.
10.1.3 Notwithstanding Section 10.1.1, as between HYSEQ and
DELTAGEN, all HYSEQ's Technical Information and other of HYSEQ's rights in and
to the Proposed Genes that became Rejected Proposed Genes pursuant to Section
4.3 that were identified, or submitted to, the Steering Committee and/or
DELTAGEN pursuant to Section 4.1, shall be solely owned by and remain vested in,
HYSEQ.
10.2 FURTHER ASSURANCES. Each Party shall execute, or cause to be
executed, any and all documentation, assignments, declarations, applications
and/or other instruments that may be reasonably necessary or desirable to effect
each Party's respective ownership rights as set forth in Section 10.1.1,
including each Party's respective rights in and to the Joint Project
Intellectual Property and the Joint Project Patents, as set forth in Section
10.1.1.
10.3 PATENT PROSECUTION AND MAINTENANCE
10.3.1 RESPONSIBLE PARTY AND COOPERATION. Each Party shall be
responsible for the preparation, filing, prosecution and maintenance of its
respectively solely owned Project
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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Patents (each a "Responsible Party"). Unless otherwise agreed pursuant to
Article 6 or Section 10.1.1, DELTAGEN shall be responsible for the preparation,
filing, prosecution and maintenance of all Joint Project Patents (in such case,
the "Responsible Party"), provided that DELTAGEN shall provide the Steering
Committee with access to all drafts of provisional and patent applications for
such Joint Project Patents. Upon the designation of a Project Gene as a Secreted
Protein Candidate, the Parties will use good faith efforts to include in the
joint development agreement: (i) the Responsible Party for prosecution of such
Joint Project Patents; (ii) that the Responsible Party shall consult with the
other Party with respect to Patent matters for which it is responsible under
this Section 10.3; and (iii) that the Parties shall meet (whether in person or
by video or telephone conference) on a regular basis to review and discuss, such
matters. Without limiting the foregoing, with respect to Deltagen Project
Patents and Joint Project Patents, DELTAGEN shall consult with HYSEQ as to where
and when to file patent applications which are included in the Patents for which
it is responsible under this Section, and concerning the preparation, filing,
prosecution, maintenance, and shall solicit HYSEQ's advice and provide HYSEQ
with sufficient time prior to DELTAGEN having to respond or take action with
respect to any such preparation, filing, prosecution, and maintenance of such
matter, and shall take into account HYSEQ's comments related thereto and
incorporate or act on such comments if and to the extent reasonable.
10.3.2 PATENT FILING AND PROSECUTION; AND UPDATES. If either
Party identifies any invention covered by the HYSEQ Know-How or the Project
Intellectual Property for which it would like to seek patent protection, it
shall notify the other Party, and the Parties shall review and discuss the
filing of a patent application covering such invention. If, after such
discussion, the Responsible Party decides to file a patent application covering
any such inventions, it shall prepare a patent application and provide the other
Party with a copy of such draft application together with a preliminary
determination of inventors and scope of claims. Each Party shall advise the
other Party within [***] of receiving any substantive action or development in
the prosecution of any patent application it is responsible for prosecuting
pursuant to this Section 10.3 (in particular any actions or developments
concerning which countries to continue prosecution of, questions of the scope,
issuance or rejection of, any interference involving, any such patent
application or any opposition to any such patent application or resulting
patent).
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
39
10.3.3 ELECTION NOT TO PROCEED. On a Patent-by-Patent basis, if a
Responsible Party, either prior or subsequent to filing any patent applications
for Project Patents, elects not to file, prosecute or maintain such patent
applications, or maintain any ensuing Project Patents, it shall notify the other
Party within [***] prior to allowing such Project Patent to lapse or become
abandoned or unenforceable, and the other Party may elect to prepare, file,
prosecute, maintain and enforce such Project Patent. Without limiting the
foregoing, if a Responsible Party plans to abandon any patent application in any
Territory relating to a Project Gene in a Project Patent, the Responsible Party
shall promptly notify the other Party, and shall not abandon such patent
application for [***] after such notification to allow the other Party, if it
chooses, to continue to prosecute such patent application solely at its own cost
and expense. The costs of filing, prosecuting, and maintaining any Project
Patent assumed by a Party pursuant to this Section 10.3.3 shall be the
responsibility of such Party (but only if and to the extent such Party, in its
sole discretion, decides to incur such costs), and shall not be considered a
Shared Patent Cost under Section 10.3.3(a).
(a) SHARED PATENT COSTS. Except for costs and expenses
incurred by a Party as set forth above in this Section 10.3.3, unless otherwise
mutually agreed by the Parties, all costs of prosecuting and maintaining Joint
Project Patents shall be shared [***] by the Parties on a [***] basis ("Shared
Patent Costs").
In the event there is a good faith dispute over an amount owed by either Party
under this Section 10.3.3(a), the disputed portion of the payment may be
delayed, and such payment shall not be considered delinquent pending a
resolution of the Parties' dispute other than with respect to the terms and
conditions of Section 13.7.
10.3.4 REPORTS. The Party performing the prosecution of any
patent application under this Section 10.3 shall provide the other Party with a
report no less frequently than once every six (6) month period (or as otherwise
mutually agreed by the Parties) listing all such patents and patent
applications, identifying them by country and patent or application number, and
briefly describing the status thereof.
10.3.5 OTHER COOPERATION AND ASSISTANCE. At the request of the
Party performing the prosecution of any patent application under this Section
10.3, the other Party
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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shall cooperate, as reasonably requested, in connection with the prosecution of
all such patent applications. Each Party shall make available to the other or
its respective authorized attorneys, agents or representatives such of its
employees as the other Party in its reasonable judgment deems necessary in order
to assist such other Party with the prosecution of such patents. Each Party
shall sign or use its best efforts to have signed and delivered at no charge to
the other Party all legal documents reasonably necessary in connection with such
prosecution and maintenance. Without in any way limiting anything contained in
this Section 10.3, (a) HYSEQ shall act in good faith to advise, and to consult
with, DELTAGEN in connection with the preparation and prosecution of the Patent
applications included in the HYSEQ Patents as they arise under this Agreement
and to mutually seek with DELTAGEN opportunities to prepare and file HYSEQ
Patents, with the Parties goal being in each instance to try, where appropriate,
to obtain the broadest Patent protection that is reasonably available; and (b)
DELTAGEN shall act in good faith to advise, and to consult with, HYSEQ in
connection with the preparation and prosecution of the Patent applications
included in the DELTAGEN Project Patents and Joint Project Patents as they arise
under this Agreement and to mutually seek with HYSEQ opportunities to prepare
and file DELTAGEN Project Patents and Joint Project Patents, with the Parties'
goal being in each instance to try, where appropriate, to obtain the broadest
Patent protection that is reasonably available. Without limiting the foregoing,
HYSEQ may use any Project data and results generated from any Project Knock-out
Mouse, including data from the First Pass Phenotypic Analysis, to support
prosecution of HYSEQ Patents as reasonably necessary for such prosecution, and
such use of data and results will not be considered a violation of the
confidentiality provisions of Article 9 provided that such data and results have
already been incorporated into a patent application by DELTAGEN.
10.3.6 HYSEQ AND DELTAGEN PROJECT PATENTS. For the avoidance of
doubt, as between DELTAGEN and HYSEQ, HYSEQ shall control all preparation,
filing, prosecution and maintenance of any and all HYSEQ Project Patents and/or
any Patents covering any HYSEQ Project Intellectual Property or HYSEQ Know-How,
and DELTAGEN shall control all preparation, filing, prosecution and maintenance
of any and all DELTAGEN Project Patents and/or any Patents covering any DELTAGEN
Project Intellectual Property or any other Technical Information owned or
controlled by DELTAGEN.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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ARTICLE 11
TERM AND TERMINATION
11.1 TERM. The term of this Agreement (the "Term") shall commence as of
the Effective Date and, unless sooner terminated by mutual agreement or pursuant
to any other provision of this Agreement, shall terminate upon the later to
occur of: (a) the expiry of the last Valid Claim relating to a Project Gene or a
Secreted Protein Candidate within the HYSEQ Patents or Project Patents, or (b)
five (5) years from the Effective Date. Upon expiration of this Agreement, the
Parties shall have the licenses expressly provided for in Sections 2.1.3 and
2.3.1 of this Agreement.
11.2 TERMINATION EVENTS.
11.2.1 HYSEQ FUNDING DEFAULT. If HYSEQ commits a material breach
of any term or condition of this Agreement solely as a result of its failure to
pay DELTAGEN amounts owed to DELTAGEN pursuant to Section 5.1, and HYSEQ fails
to cure such breach within ninety (90) days after receiving written notice of
the breach from DELTAGEN, DELTAGEN may immediately terminate this Agreement in
its entirety upon written notice to HYSEQ at the end of such ninety (90) day
period for the HYSEQ's uncured breach; provided, however, that in the event that
the amount or the obligation to pay such amount is the subject of a good faith
dispute between the Parties, such dispute shall be deemed as and treated as a
Dispute (as such term is defined in Section 13.5.1) for the purposes of this
Agreement and addressed by means of the dispute resolution provisions of Section
13.5 and until such time as the board of arbitrators, pursuant to Section 13.5,
renders a final decision with respect to such Dispute the Parties shall continue
to perform their obligations hereunder, except to the extent mutually agreed to
by the Parties or as directed by the arbitrators pursuant to Section 13.5.
11.2.2 OTHER DEFAULTS. Except as set forth in Section 11.2.1, if
either Party commits a material breach of any term or condition of this
Agreement, the non-breaching Party may give the other Party written notice of
the breach, and if the breach is not cured within ninety (90) days after
receiving written notice of the breach, the non-breaching Party shall (i) have
the right to terminate this Agreement upon written notice to the breaching
Party; and (ii) to submit the subject matter of the alleged breach to the
dispute resolution process pursuant to Section 13.5
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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within thirty (30) days of the end of such ninety (90) day period by giving the
other Party written notice requesting arbitration within such thirty (30) day
period. Unless this Agreement is terminated by the non-breaching Party pursuant
to this Section 11.2.2, the Parties shall continue to perform their obligations
hereunder during the pendency of such arbitration, except to the extent mutually
agreed otherwise by the Parties or except as directed by the arbitrators. The
arbitrators decision shall be binding upon the Parties except that in no event
shall the arbitrators have the power or authority to terminate this Agreement,
either in whole or in part.
ARTICLE 12
EFFECT OF EXPIRATION AND TERMINATION; AND SURVIVABILITY
12.1 EFFECT OF TERMINATION DUE TO HYSEQ FUNDING BREACH. In the event
that this Agreement is terminated by DELTAGEN pursuant to Section 11.2.1: (a)
HYSEQ shall terminate all activities, if any, undertaken by HYSEQ or its
Affiliates or any of their employees, consultants, agents or contractors
pursuant to or in connection with this Agreement in an orderly manner, as soon
as practical and in accordance with a schedule mutually agreed to by DELTAGEN
and HYSEQ; and (b) to the extent not already provided to DELTAGEN, HYSEQ shall
deliver to DELTAGEN all copies of all information and data generated (in paper
and, if available, electronic form) in connection with the activities conducted
by HYSEQ or its Affiliates or any of their respective employees, consultants,
agents or contractors under the Development Program. In addition to the
foregoing, HYSEQ hereby grants to DELTAGEN, a non-exclusive license, including
the right to grant sublicenses (which sublicenses may include the right to grant
further sublicenses), which license shall immediately and automatically be
effective upon termination of this Agreement by DELTAGEN pursuant to Section
11.2.1, under the HYSEQ Patents, HYSEQ Know-How, HYSEQ Project Patents, Joint
Project Patents, HYSEQ Project Intellectual Property and Joint Project
Intellectual Property, (i) to analyze and use the Project Genes and any
derivatives thereof, (ii) to use, make, create, generate, produce, breed, test,
and conduct research and development activities in connection with Project
Knock-Out Mice and progeny and other derivatives thereof with respect to the
Project Genes, (iii) to use, make, generate, produce, create, isolate, purify,
identify and conduct research and development activities in connection with any
Proposed Genes and/or Project Genes (and/or any
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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mutation, fragment allelic variant, analog, homolog or ortholog of any Proposed
Genes and/or Project Genes and/or any expression products (including any
Secreted Proteins, Derivative Proteins and/or Products) and/or derivatives
thereof, and (iv) to develop, make, use and sell Secreted Protein Candidates and
Products.
12.2 RETURN OF CONFIDENTIAL MATERIALS AND INFORMATION. Upon expiration
of this Agreement, upon the other Party's written request, each Party shall
either, as directed by the other Party, return to the other Party or certify in
writing to the other Party that it has destroyed all documents and other
tangible items provided by the other Party that contain or relate to
Confidential Information of the other Party (other than information that is
considered joint Confidential Information of both Parties), including abstracts
and summaries thereof; except if and to the extent, that the Parties have
otherwise expressly agreed in writing, including as the Parties may have agreed
pursuant to Article 6 with respect to the development and/or commercialization
of any Secreted Protein Candidate or any Products, either themselves, or through
or with any Affiliates or Third Parties.
12.3 SURVIVABILITY. Expiration or termination of this Agreement shall
not affect each Party's obligations to pay any amount accruing to the other
Party under the provisions of this Agreement while it was in effect. Further,
the expiration or termination of this Agreement shall not affect any rights and
obligations of the Parties under this Agreement which survive such termination.
Without limiting the generality of the foregoing, the following provisions of
this Agreement shall survive expiration or termination hereof: Articles 1, 2
(only as expressly provided therein with respect to license grants that have not
terminated by their terms), 7, 8, 9, 10, 12 and 13 and Section 5.5.3.3.
ARTICLE 13
MISCELLANEOUS
13.1 FORCE MAJEURE. If either Party is prevented from complying, either
totally or in part, with any of the terms or provisions of this Agreement (other
than a payment obligation), by reason of force majeure, including, but not
limited to fire, flood, earthquake, explosion, storm, strike, lockout or other
labor trouble, riot, war, rebellion, accident, acts of God and/or any other
cause or externally induced casualty beyond its reasonable control, whether
similar to the
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
44
foregoing matters or not, then, upon written notice by the Party liable to
perform to the other Party, the requirements of this Agreement or such of its
provisions as may be affected, and to the extent so affected, shall be suspended
during the period of such disability.
13.2 NO ASSIGNMENT. Neither Party shall, without the prior written
consent (not to be unreasonably withheld) of the other Party having been
obtained, assign or transfer this Agreement, or any right or obligation under
this Agreement, to any Person; provided, however, that each Party may assign or
transfer this Agreement to any successor by merger of such Party, or upon a sale
of all or substantially all of such Party's assets without the prior written
consent of the other Party hereto. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their successors and permitted
assigns.
13.3 NOTICES. Any notices required or permitted to be given hereunder
shall be in writing in the English language and shall be delivered in person or
by Federal Express (or other courier service requiring signature upon receipt)
or sent by air mail, postage prepaid, or facsimile (confirmed by a telephone
conversation with the recipient) to the addresses set forth below. The Parties
may change the address at which notice is to be given by giving notice to the
other Party as herein provided. All notices shall be deemed effective upon
receipt by the Party to whom it is addressed.
If to HYSEQ:
Hyseq Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: President & CEO
cc: General Counsel, at the same address
Fax: (000) 000-0000
Phone: (000) 000-0000
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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If to DELTAGEN:
Deltagen Inc.
000 Xxx Xxxx
Xxxxxxx Xxxx, XX 00000-0000
Attention: President
cc: General Counsel, at the same address
Fax: (000) 000-0000
Phone: (000) 000-0000
13.4 GOVERNING LAW. This Agreement and its execution, validity and
interpretation shall be interpreted in accordance with and governed in all
respects in accordance with the laws of the State of California, and all rights
and remedies shall be governed by such laws without regard to principles of
conflicts of law. Subject to Section 13.5, the Parties hereby consent to the
exclusive personal jurisdiction and venue of the Superior Court of the County of
Santa Xxxxx in the State of California or, as applicable, the United States
District Court for the Northern District of California, for all matters arising
under or in connection with this Agreement.
13.5 DISPUTE RESOLUTION.
13.5.1 The Parties shall initially attempt in good faith to
resolve any significant controversy, claim, or dispute arising out of or
relating to this Agreement or any significant breach thereof (hereinafter
collectively referred to as a "Dispute") through face-to-face negotiations
between senior executives of HYSEQ and DELTAGEN. If the Dispute is not resolved
within thirty (30) days (or such other period of time mutually agreed upon by
the Parties) of commencing such face-to-face negotiations, or if the Party
against which a claim has been asserted refuses to attend such negotiations or
does not otherwise participate in such negotiations within thirty (30) days (or
such other period of time mutually agreed upon by the Parties) from the date of
notice of a Dispute, then the Parties agree to submit the Dispute to arbitration
as provided herein. Unless otherwise mutually agreed by the Parties, only if the
Dispute is not resolved through face-to-face negotiations as set forth in this
Section 13.5.1, may a Party resort to arbitration.
13.5.2 Except as provided in Section 13.5.1 and Sections 3.3.4
and 6.3, all Disputes relating in any way to this Agreement shall be resolved
exclusively through arbitration
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
46
conducted under the auspices of the American Arbitration Association (the "AAA")
pursuant to its Commercial Dispute Resolution Procedures; provided, however,
that any disputes between the Parties concerning the infringement or validity of
any intellectual property right subject to this Agreement shall be heard by a
court of competent jurisdiction. The arbitration shall be conducted in the
English language before three (3) arbitrators, one selected by each Party and
the third to be selected by the other two. For any Dispute arising out of a
non-concurrence of the Steering Committee such arbitrators shall have the
appropriate technical and scientific background. Unless otherwise mutually
agreed by the Parties, any arbitration brought hereunder shall be brought only
and exclusively in the State of California. The arbitrators shall hear evidence
by each Party and resolve each of the issues identified by the Parties. The
arbitrators shall render a formal, binding non-appealable resolution and award
on each issue as expeditiously as possible, but not more than fifteen (15)
business days after the hearing. In any arbitration, the prevailing Party shall
be entitled to reimbursement of its reasonable attorneys' fees and the Parties
shall use all reasonable efforts to keep arbitration costs to a minimum.
13.5.3 Notwithstanding anything contained herein, in no event
shall arbitrators have the power or authority to terminate this Agreement in
whole or in part.
13.5.4 Nothing in this Agreement shall be deemed as preventing
either Party from seeking injunctive relief (or any other provisional remedy)
from any court having jurisdiction over the Parties and the subject matter of
the dispute as necessary to protect either Party's intellectual property.
13.6 LICENSE SURVIVAL DURING BANKRUPTCY. All rights and licenses granted
under or pursuant to this Agreement are, and shall otherwise be deemed to be,
for purposes of Paragraph 365(n) of the U.S. Bankruptcy Code, licenses of rights
to "intellectual property" as defined under Paragraph 101(35A) of the U.S.
Bankruptcy Code. The Parties agree that each Party, as a licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code, subject to performance by the other
Party of its preexisting obligations under this Agreement. The Parties further
agree that, in the event of the commencement of a bankruptcy proceeding by or
against a Party, including under the U.S. Bankruptcy Code, the other Party shall
be entitled to a complete duplicate of (or complete access
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
47
to, as appropriate) any such intellectual property, and all embodiments of such
intellectual property, shall be promptly delivered to the other Party upon any
such commencement of a bankruptcy proceeding upon written request therefor by
the other Party.
13.7 INTEREST. The Parties shall pay interest on any amounts overdue
under this Agreement at a rate of the lesser of the maximum allowed by
applicable law or [***] above the U.S. dollar prime or equivalent rate quoted by
Citibank N.A. or another mutually acceptable bank, as in effect during the
period from the date due until payment, including from the date any amounts
disputed in good faith by the Parties were originally due and payable hereunder.
This Section 13.7 shall apply to any amounts either Party may dispute under this
Agreement for any reason, even disputes initiated in good faith; provided,
however, that such amounts shall not be due and payable if a final decision by a
court of competent jurisdiction or AAA under Section 13.5 is rendered in favor
of the Party withholding the payment and such final decision declares such
disputed amounts not due under this Agreement.
13.8 INTERPRETATION. The parties hereby acknowledge and agree that they
each required that this Agreement and all documents and notices in connection
herewith be drawn up in English. This Agreement shall be deemed to comprise the
language mutually chosen by the Parties, has been prepared jointly and no rule
of strict construction shall be applied against either Party. In this Agreement,
the singular shall include the plural and vice versa and the word "including"
shall be deemed to be followed by the phrase "without limitation".
13.9 SEVERABILITY. In the event that any provision of this Agreement
shall be held to be unenforceable, invalid or in contravention of applicable
law, such provision shall be of no effect, and the Parties shall negotiate in
good faith to replace such provision with a provision which effects to the
extent possible the original intent of such provision.
13.10 COMPLETE AGREEMENT. This Agreement, including all Exhibits hereto,
supersedes all prior understandings, agreements, representations and warranties
between the Parties, oral or written with respect to the present subject matter,
and comprises the complete agreement between the Parties with respect to the
present subject matter.
13.11 MODIFICATIONS. No terms or provisions of this Agreement shall be
varied or modified by any prior or subsequent statement, conduct or act of
either of the Parties, except that
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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the Parties may amend this Agreement by written instruments specifically
referring to this Agreement and executed by a duly authorized officer of each of
the Parties.
13.12 NO AGENCY. Neither Party shall by virtue of this Agreement have
any power to make on behalf of the other Party any statements, representations
or commitments of any kind or to bind the other to any obligation nor shall this
Agreement create any relationship of agency, partnership or joint venture or any
fiduciary relationship between the Parties.
13.13 NO WAIVER. No term or condition of this Agreement shall be
considered waived unless reduced to writing and duly executed by a duly
authorized officer of the waiving Party. Any waiver by any Party of a breach of
any term or condition of this Agreement will not be considered as a waiver of
any subsequent breach of this Agreement, of that term or condition or any other
term or condition hereof.
13.14 COUNTERPARTS. The Agreement may be executed simultaneously in one
or more counterparts, each one of which need not contain the signature of more
than one Party but such counterparts taken together shall constitute one and the
same agreement.
* * * * *
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
HYSEQ, INC. DELTAGEN INC.
By: /s/ Xxx X. Love, M.D. By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------------
Name: Xxx X. Love, M.D. Name: Xxxx Xxxxx
---------------------------- -----------------------------------
Title: President & CEO Title: V.P. Intellectual Property
--------------------------- ----------------------------------
Date: 10/09/01 Date: 10/09/01
--------------------------- ----------------------------------
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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT A
[***]
[***]
[***]
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
A-1
[***]
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2
[***]
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
3
[***]
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
4
[***]
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
5
[***]
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
6
EXHIBIT B
SECTION 6. 3 MEDIATION
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
B-1
EXHIBIT C
WORK PLAN
1. Within [***] of the first Steering Committee meeting, HYSEQ will provide
to Deltagen [***]. Within [***] of the Effective Date, HYSEQ will
provide to Deltagen [***], in accordance with the terms and conditions
of this Agreement, [***] sufficient to allow the Steering Committee to
[***].
2. Deltagen will evaluate such [***] for conflict purposes and either
reject or accept each such Submitted Gene as a Proposed Gene within
[***] of its submission. Hyseq will provide supporting information and
disclosures as in paragraph 4.1.3 of the Agreement within [***] of
Deltagen's acceptance of a [***]. To maximize efficiency, each Party
will endeavour to provide information to the other party in [***].
3. The Steering Committee will vote on whether to designate a [***]. The
time periods for submissions of information and voting will be set so as
to allow [***] within [***] after the Effective Date.
4. Deltagen will create a [***] to create and generate a [***] within which
the [***] of the [***] has been [***].
5. The time periods for paragraph 4 will be set so that the targeting
strategy for generation of [***] for the first [***] has been created
and completed within [***] after these [***] have been designated. The
targeting strategy for generation of [***] for the remaining [***] will
be created and completed [***] after these [***] have been designated.
6. Deltagen will use the [***] to generate [***] and conduct a [***] as
described in Exhibit A. The Steering Committee will be kept informed of
the status of each project [***].
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
C-1
EXHIBIT D
DISCLOSURES
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
D-1
