EXHIBIT 10.51
MASTER DEVELOPMENT AGREEMENT
This Master Development Agreement (the "AGREEMENT") is made and entered
into as of October 28, 2004 (the "EFFECTIVE DATE") by and between Solexa
Limited, a company registered in England and Wales having its principal place of
business at Chesterford Research Park, Little Chesterford, XX Xxxxxxx Walden,
Essex, Great Britain CB10 1XL (the "COMPANY"), and Lynx Therapeutics, Inc., a
Delaware corporation having its principal place of business at 00000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ( "LYNX"). The Company and Lynx desire to
enter into this Agreement to set forth the terms and conditions pursuant to
which Lynx will provide certain product design and development to the Company.
In consideration of the mutual promises and obligations contained herein, the
parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the following meanings:
"COMPANY BACKGROUND INTELLECTUAL PROPERTY" means all Intellectual Property
Rights and Inventions owned or controlled by the Company as of the Effective
Date of this Agreement, or developed, conceived of or reduced to practice by the
Company other than in connection with a Statement of Work.
"LYNX BACKGROUND INTELLECTUAL PROPERTY" means all Intellectual Property
Rights and Inventions owned or controlled by Lynx as of the Effective Date of
this Agreement, or developed, conceived of or reduced to practice by Lynx other
than in connection with a Statement of Work.
"DELIVERABLES" means (a) any products, product designs, hardware, software
(in source code or object code form), materials and other information developed
or provided by Lynx to the Company in connection with a Statement of Work.
"FTE" means a full-time equivalent employee (i.e., one fully-committed or
multiple partially-committed employees aggregating to one full-time employee)
employed by Lynx and assigned to perform specified work, with such commitment of
time and effort to constitute the work of one full-time employee.
"INTELLECTUAL PROPERTY RIGHTS" means all (i) rights in patents, utility
models and the like, (ii) copyrights, moral rights and other rights in works of
authorship, (iii) mask work rights, (iv) trade secret rights, (v) trademark,
service xxxx, trade names and trade dress rights, (vi) other intellectual
property rights, current or future, under the laws of any jurisdiction, in each
case together with all applications therefor and registrations thereof.
"INVENTION" means any procedure, process, idea, design, concept, technique,
invention, discovery, work of authorship, modification, improvement or
derivative work.
"PROJECT INTELLECTUAL PROPERTY" means any Intellectual Property Rights or
Inventions that are conceived, developed, authored or reduced to practice by
either the Company or Lynx (or their respective affiliates), or jointly by any
of them, in connection with any Statement of Work.
"STATEMENT OF WORK" means the Specifications, Deliverables and terms and
conditions agreed to in writing by the parties with respect to development
projects undertaken by Lynx hereunder, each of which will be attached separately
as Appendix A hereof.
"SPECIFICATIONS" means the specifications for any Deliverable as set forth
in the applicable Statement of Work.
2. MASTER AGREEMENT; SERVICES.
Lynx shall provide to the Company certain development services in
connection with development and
commercialization of the Company's products, as set forth in one or more
statements of work (each, a "STATEMENT OF WORK") agreed to in writing by the
parties and attached hereto. In the event of any actual conflict between the
terms and conditions in any Statement of Work and this Agreement, this Agreement
shall control, except to the extent the Statement of Work expressly references
this Agreement and provides that the Statement of Work controls. No Statement of
Work or material change to any existing Statement of Work will be binding on the
parties unless signed by both parties.
3. INTELLECTUAL AND PHYSICAL PROPERTY RIGHTS
3.1 Ownership; License to Deliverables. As between the parties, Lynx will
retain all right, title and interest in and to the Lynx Background Intellectual
Property. As between the parties, the Company will retain all right, title and
interest in and to the Company Background Intellectual Property. Subject to the
foregoing, as between the parties, the Company shall own all right, title and
interest in and to any Project Intellectual Property. To the extent that any
Deliverable incorporates any Lynx Background Intellectual Property or any third
party Intellectual Property Rights ("LICENSED IP"), Lynx shall acquire, and
hereby grants to the Company, a nonexclusive, worldwide, royalty-free license
under the Licensed IP to use, reproduce, modify and create derivative works and
modify the Deliverables, solely for the Company's internal research and
development efforts. Lynx agrees to negotiate, on commercially reasonable terms
and conditions, a commercial license to the Licensed IP upon the Company's
written request during or after the term of this Agreement.
3.2 Further Assurances. Lynx will assist the Company, or its designee, at
the Company's expense, in every proper way to secure the Company's ownership
rights in the Project Intellectual Property. If the Company, after reasonable
efforts, is unable to secure Lynx's signature to apply for or to pursue any
application for any United States or foreign patents or copyright registrations
or other applications or registrations for Project Intellectual Property, then
Lynx hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as its agent and attorney in fact, to act for and
in its behalf and stead to execute and file any such applications and
registrations and to do all other lawfully permitted acts to further the
prosecution of such applications and registrations and the issuance of patent or
copyright registrations thereon with the same legal force and effect as if
executed by Lynx.
3.3 Physical Property. The Company shall own all right, title and interest
in and to (a) the Deliverables (subject to Lynx' rights in Section 3.1 above),
(b) the Purchased Materials (as defined in Section 4.2 below), and (c) to any
prototypes or designs (at any stage of development) produced pursuant to this
Agreement or a Statement of Work (all of the foregoing, the "PHYSICAL
PROPERTY"). Lynx agrees to assist the Company in filing a UCC-1 or any other
documents to perfect the Company's rights in the Physical Property.
4. CONSIDERATION.
4.1 Development Fees. During the term of this Agreement, Lynx will
dedicate the number of FTEs set forth in a Statement of Work to perform its
obligations thereunder. The Company will reimburse Lynx for such FTEs at a rate
of $4,000 per week per FTE for the documented time spent by such FTEs in
connection with a Statement of Work ("DEVELOPMENT FEES"), as provided in Section
4.3 below.
4.2 Expenses. The Company will reimburse Lynx at cost for its documented
out-of-pocket expenses incurred in connection with the performance of services
pursuant to this Agreement ("EXPENSES") including the documented out-of-pocket
cost of purchased materials and equipment (for example, parts purchased for
prototypes), printed circuit boards and designs, and any other outside services
(together, the "PURCHASED MATERIALS"). Any Expenses in excess of $1,000 will
require the prior written approval of the Company.
4.3 Invoices; Maximum Fees and Expenses. Lynx will invoice the Company
periodically for time spent and Expenses incurred. All invoices will include
reasonable supporting documentation. Invoices will be due and payable upon
receipt. Notwithstanding any other provision in this Agreement or in a Statement
of Work, in no event will the Company's total liability for Development and
Expenses, in the aggregate, exceed $500,000 during the Term of this Agreement,
except as otherwise agreed in a written amendment hereto.
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5. REPRESENTATIONS; WARRANTIES
5.1 By the Company. The Company represents and warrants (a) it has the
right, power and authority to enter into this Agreement and to grant the rights
and licenses contemplated by this Agreement, without the need for any consents,
approvals or immunities not yet obtained and without any conflict with, breach
of or default under its articles of incorporation, bylaws, other charter
documents or any contract or obligation to which it is a party or by which it is
bound, and (b) it will comply with all applicable laws, rules and regulations in
the performance of its obligations hereunder.
5.2 By Lynx. Lynx represents and warrants that (a) all Deliverables
(including any Lynx Background Intellectual Property contained or embodied
therein) have been or will be created by employees or contractors of Lynx during
the course of their employment or consulting activities, and who have executed
valid and enforceable written agreements assigning to Lynx all right, title and
interest (including all Intellectual Property Rights) in and to any such
inventions or works of authorship, (b) no software in any Deliverable contains
any virus, trojan horse, worm, malicious code or feature that allows it to be
accessed, modified or disabled by unauthorized persons, (c) it will comply with
all applicable laws, rules and regulations in the performance of its obligations
hereunder, (d) all work performed by employees and contractors of Lynx will be
performed in a professional and workmanlike manner , and (e) it has the right,
power and authority to enter into this Agreement and to grant the rights and
licenses contemplated by this Agreement, without the need for any consents,
approvals or immunities not yet obtained and without any conflict with, breach
of or default under its articles of incorporation, bylaws, other charter
documents or any contract or obligation to which it is a party or by which it is
bound.
6. INDEMNIFICATION.
6.1 By Lynx. Lynx will defend, indemnify, and hold the Company and its
officers, directors and employees harmless from all liabilities, damages, losses
and expenses (including without limitation reasonable attorney's fees and court
costs) incurred by any of them in connection with any breach or alleged breach
by Lynx of any of its representations or warranties in Section 5 of this
Agreement.
6.2 By Company. Company will defend, indemnify and hold Lynx and its
officers, directors and employees harmless from all liabilities, damages, losses
and expenses (including without limitation reasonable attorney's fees and court
costs) incurred by any of them in connection with (a) any breach or alleged
breach by Company of any of its representations or warranties in Section 5 of
this Agreement.
6.3 Indemnification Procedures. Each party's indemnification obligations
under this Section 6 are subject to the following requirements: (a) the
indemnified party will provide the indemnifying party with prompt written notice
of any claim; (b) the indemnified party will permit the indemnifying party to
assume and control the defense of any action; (c) the indemnified party will not
enter into any settlement or compromise of any claim or action without the
indemnifying party's prior written consent; and (d) the indemnified party may,
at its own expense, participate in its defense of any claim or action.
7. TERM AND TERMINATION
7.1 Term. The term of this Agreement will commence on the Effective Date
and unless earlier terminated pursuant to Section 7.2 below or extended in a
writing signed by both parties, will continue in effect until the earlier of (a)
the closing of the contemplated merger between the Company and a wholly-owned
subsidiary of Lynx, or (b) December 31, 2004 (the "TERM").
7.2 Termination. Either party may, at its option, terminate this Agreement
or any Statement of Work at any time, with or without cause, upon 10 days' prior
written notice to the other party. Termination of this Agreement shall terminate
all existing Statement of Works. No payments shall be owed by the Company to
Lynx for services rendered under any validly executed and in-progress Statement
of Work after the date of termination of the applicable Statement of Work or of
this Agreement. In the event of termination of this Agreement or a Statement of
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Work, the Company will be liable for, and will reimburse Lynx for, all
non-cancelable Expenses and all FTE fees for services rendered up to the date of
termination upon receipt of a final invoice from Lynx. Upon payment of any
amounts owing by the Company hereunder, Lynx will promptly: (a) furnish to the
Company, in addition to any other report or Deliverable due prior to the date of
termination or expiration, a brief report summarizing the status of the services
rendered under any in-progress Statement of Work; and (b) furnish to the Company
any Deliverables, regardless of completion, under each Statement of Work
in-progress.
7.3 Survival of Certain Terms. The provisions of Sections 3 and 5 through
10, together with any accrued but unpaid payment obligations shall survive any
termination or expiration of this Agreement. Upon any termination of this
Agreement, Lynx shall provide the Company with a final invoice with supporting
documentation for services provided through the date of termination, which
Company shall pay as provided herein. All other rights and obligations of the
parties cease upon termination of the Agreement.
8. CONFIDENTIALITY
8.1 Confidential Information. The term "CONFIDENTIAL INFORMATION" means
any non-public information which is disclosed by one party (the "DISCLOSING
PARTY") to the other (the "RECEIVING PARTY"), whether in written or oral form,
including without limitation software source code, trade secrets, engineering
know how, product research, product design, product operation, product plans,
product costs, product prices, or product names.
8.2 Nondisclosure of Confidential Information. Each party agrees that
during the term of this Agreement and for a period of five (5) years thereafter,
it will treat as confidential all Confidential Information of the other party
and will not use such Confidential Information except as expressly set forth
herein. Without limiting the foregoing, each party will use at least the same
procedures and degree of care that it uses to prevent the disclosure of its own
confidential information of like importance to prevent the disclosure of
Confidential Information disclosed to it by the other party under this
Agreement, but in no event less than reasonable care.
8.3 Exceptions. The foregoing restrictions will not apply to information
that is (a) approved for release or disclosure by a Receiving Party to any third
party by prior express written consent of a Disclosing Party, (b) already known
to a Receiving Party, without obligation to keep it confidential, at the time of
its receipt from a Disclosing Party, (c) received by a Receiving Party in good
faith from a third party lawfully in possession thereof and having no similar
obligation to keep such information confidential, (d) publicly known to a
Receiving Party at or after the time of its receipt by a Receiving Party from a
Disclosing Party through no fault of such Receiving Party, (e) furnished to a
third party by a Disclosing Party without a similar restriction, (f)
independently developed by a Receiving Party without use of the Disclosing
Party's Confidential Information, or (g) disclosed pursuant to the requirement
of a governmental agency or as required by operation of law.
9. LIMITATION OF LIABILITY
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR (A) ANY LOSS OF PROFITS, LOSS
OR INTERRUPTION OF BUSINESS, INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR
CONSEQUENTIAL DAMAGES OF ANY KIND, ARISING UNDER THIS AGREEMENT OR IN CONNECTION
WITH THE PERFORMANCE HEREOF OR (B) AMOUNTS IN EXCESS OF THE AGGREGATE AMOUNT
PAID OR PAYABLE UNDER THIS AGREEMENT OR FOR BREACH OF THIS AGREEMENT WHETHER IN
CONTRACT OR TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY OTHER LEGAL
THEORY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
10. MISCELLANEOUS. The parties are independent contractors, and nothing in this
Agreement is intended to create any agency, partnership or joint venture
relationship between them. This Agreement is governed and interpreted in
accordance with the laws of the State of California without reference to
conflicts of laws principles. Neither party may assign this Agreement, or any of
its rights or obligations hereunder, by operation of law or otherwise, without
the other party's prior written consent. Any purported assignment by either
party other than as
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provided in this Section 10 will be null and void. No failure by either party to
enforce any of its rights under this Agreement will act as a waiver of such
rights. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard thereto, and supersedes any and all other
written or oral agreements existing between the parties hereto regarding the
subject matter of this Agreement. This Agreement may not be modified without the
prior written consent of both parties.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
SOLEXA LIMITED LYNX THERAPEUTICS, INC.
By: /s/ Xxxx Xxxx By:/s/ Xxxxx X. Xxxxxxxx
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Name: Xxxx Xxxx Name: Xxxxx X. Xxxxxxxx
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Title: Chief Executive Officer Title: President and Chief Executive Officer
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SIGNATURE PAGE TO MASTER DEVELOPMENT AGREEMENT
APPENDIX A-1
STATEMENT OF WORK
This Statement of Work dated October 28, 2004 governs the partial
development of a biochemistry and associated instrumentation and software to the
specifications of Solexa Limited. It will be attached to and made part of the
Master Development Agreement dated October 28, 2004, between Solexa Limited, a
company registered in England and Wales (the "COMPANY") , and Lynx Therapeutics,
Inc., a Delaware corporation ("LYNX").
LYNX BACKGROUND TECHNOLOGY:
Lynx has developed a short-read DNA sequencing biochemistry called MPSS,
and implemented it on a bead-based format. It has also designed and manufactured
a set of Generation III ("Gen III") instruments to implement bead-based MPSS.
These instruments are used in Lynx's service laboratory for commercial analysis
of customer samples. The Gen III instruments use a white-light epifluorescence
optical configuration and are supported by software for data capture and
analysis.
Lynx has begun the design of a Gen IV instrument to implement its MPSS
biochemistry on DNA clusters. The Gen IV is a largely new design (both hardware
and software), but incorporates elements of the Gen III instruments. Also based
on a white-light epifluorescence optical configuration, the Gen IV instrument
designs have not, in large part, yet been prototyped. Lynx has sought to develop
the biochemistry of clusters on commercially available biochemical surfaces.
SOLEXA BACKGROUND TECHNOLOGY:
Solexa has developed a short-read DNA sequencing biochemistry called SBS
and intends to implement it commercially on DNA clusters. Solexa has prototyped
an optical system based on total internal reflection fluorescence (TIRF). It has
also developed a proprietary surface chemistry to be used with SBS and clusters.
DESCRIPTION OF DEVELOPMENT SERVICES:
Solexa is contracting Lynx to modify its Gen IV designs to work with
Solexa's SBS chemistry, with Solexa's TIRF optical approach, and with Solexa's
surface chemistry. As these design changes are done, Lynx will proceed with
prototyping the designs, testing and debugging them, with the eventual goal of
completing the development of manufacturable commercial products. This will
require both engineering and biochemical development work. As a part of this
work, Lynx will modify a number of its Gen III instruments to support
preliminary experiments with clusters. Except with respect to Purchased
Materials, if any, used in modifying such Gen III instruments, the modified Gen
III instruments will not be Physical Property under this Agreement.
SPECIFICATIONS:
The funding under this statement of work is insufficient to complete the
development project described above. This funding is to enable the work to
commence, with the understanding that successful progress at this funding level
may lead to further funding or other arrangements in the future to continue the
work begun here.
This work at Lynx is to be closely collaborative with work being done by
employees of Solexa. Detailed guidance of the work is to be provided by the
technical leads of the two companies: Dr. Xxxx Xxxxx (Solexa) and Xx. Xxxx
Xxxxxxxx (Lynx), or alternates as might be designated if necessary in the
future.
Funding authorized under this Statement of Work is as follows :
1. 100 person-week FTE's at $4,000 / person week for a maximum of
$400,000.
2. $ 80,000 in purchased parts and outside services (e.g. for printed
circuit board layout) at Lynx cost.
3. $20,000 to cover travel and other out of pocket expenses required to
meet at Solexa's offices in the UK.
Total not to exceed $ 500,000.
SIGNATURES:
SOLEXA LIMITED LYNX THERAPEUTICS, INC.
By: /s/ Xxxx Xxxx By:/s/ Xxxxx X. Xxxxxxxx
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Name: Xxxx Xxxx Name: Xxxxx X. Xxxxxxxx
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Title: Chief Executive Officer Title: President and Chief Executive Officer
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