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EXHIBIT 10.3
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
THERAPEUTIC PROTEIN ALLIANCE AGREEMENT
BETWEEN
LEXICON GENETICS INCORPORATED
AND
INCYTE GENOMICS, INC.
DATED AS OF JUNE 27, 2001
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THERAPEUTIC PROTEIN ALLIANCE AGREEMENT
THIS THERAPEUTIC PROTEIN ALLIANCE AGREEMENT (this "Agreement") is dated
as of June 27, 2001 (the "Effective Date") and is made by and between LEXICON
GENETICS INCORPORATED, a Delaware corporation ("Lexicon"), and INCYTE GENOMICS,
INC., a Delaware corporation ("Incyte"). Lexicon and Incyte are sometimes
referred to herein individually as a "party" and collectively as the "parties."
R E C I T A L S
WHEREAS, Lexicon owns or has rights to, and expertise in, certain
methods of producing and analyzing the phenotypes of gene knockout mice for the
discovery of gene and protein function;
WHEREAS, Incyte owns or has rights in certain genes that encode
secreted proteins and the proteins encoded by such genes;
WHEREAS, the parties desire to engage in a collaborative research
program to define the function and pharmaceutical utility of selected secreted
proteins for the discovery of Therapeutic Proteins (as hereinafter defined);
WHEREAS, each party is willing to grant to the other party (i) the
right to obtain exclusive licenses to commercialize Therapeutic Proteins and
(ii) non-exclusive licenses to commercialize Diagnostic Products (as hereinafter
defined) in connection with marketed Therapeutic Proteins, in each case that are
derived from such collaborative research on the terms and conditions set forth
below;
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article 1
shall have the respective meanings specified below:
1.1 "Affiliate" means any corporation, company, partnership, joint
venture and/or firm that controls, is controlled by or is under common control
with a party to this Agreement. For purposes hereof, "control" means (i) in the
case of corporate entities, direct or indirect ownership more than fifty percent
(50%) of the stock or shares entitled to vote for the election of directors; and
(ii) in the case of non-corporate entities, direct or indirect ownership of more
than fifty percent (50%) of the equity interest with the power to direct the
management and policies of such non-corporate entities. [**]
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1.2 "BLA" means a Biologics License Application, Product License
Application, New Drug Application, or similar application for marketing approval
of a Product for use in the Therapeutic Field submitted to the FDA, or its
foreign equivalent.
1.3 "Collaboration Term" means the period described in Section 11.1.1.
1.4 "Commercialization Field" means, collectively, the Diagnostic Field
and the Therapeutic Field.
1.5 "Confidential Information" means any information and data received
by a party (the "Receiving Party") from the other party or its Affiliates (the
"Disclosing Party") in connection with this Agreement (including, without
limitation, all information disclosed by the Parties under Section 2.2 and any
research, testing, clinical, regulatory, marketing or other scientific or
business information, plans, or data pertaining to any Product of the Disclosing
Party). Notwithstanding the foregoing, Confidential Information shall not
include any part of such information or data that:
(a) is or becomes part of the public domain other than by
unauthorized acts of the Receiving Party or its Affiliates;
(b) can be shown by written documents to have been already in
the possession of the Receiving Party or its Affiliates prior to
disclosure under this Agreement, provided such Confidential Information
was not obtained directly or indirectly from the Disclosing Party
pursuant to a confidentiality agreement;
(c) can be shown by written documents to have been disclosed to
the Receiving Party or its Affiliates by a Third Party, provided such
Confidential Information was not obtained directly or indirectly from
the Disclosing Party pursuant to a confidentiality agreement; or
(d) can be shown by written documents to have been
independently developed by the Receiving Party or its Affiliates
without use of, or access to, Confidential Information of the
Disclosing Party.
Specific Confidential Information of a Disclosing Party shall not be deemed to
come under the foregoing exceptions merely because it is embraced by more
general information that is or becomes part of the public domain, or is known
by, disclosed to or independently developed by the Receiving Party.
1.6 "Diagnostic Field" means [**].
1.7 "Diagnostic Product" means any product or service derived from or
directed to Research Program Gene Products or Licensed Gene Products for use in
the Diagnostic Field.
1.8 "Disclosing Party" has the meaning set forth in Section 1.5 hereof.
1.9 "Drug Product" means [**]; provided, however, that Drug Product
shall not include any Therapeutic Protein or antisense product.
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1.10 "Effective Date" means the date specified in the initial paragraph
of this Agreement.
1.11 "Eligible TP Gene Product" has the meaning set forth in Section
2.6 hereof. A Gene Product shall cease to be an Eligible TP Gene Product upon
the earlier to occur of (i) a party's selection of such Gene Product and
obtaining a license in the Commercialization Field under Section 2.10 or (ii)
the failure of either party to select such Gene Product and obtain a license in
the Commercialization Field within the time contemplated by Section 2.10.7.
1.12 "Event of Default" means an event described in Section 11.3
hereof.
1.13 "First Commercial Sale" means the first sale for use or
consumption by the general public of a Product in a country after all required
marketing and pricing or pricing reimbursement approvals to be granted by the
governing health authority of such country have been obtained. For the avoidance
of doubt, First Commercial Sale shall not include the sale of any Product for
use in clinical trials or for compassionate use prior to the approval of a BLA.
1.14 "FDA" means the United States Food and Drug Administration, or the
successor thereto.
1.15 "Gene Product" means [**].
1.16 "Homologous Recombination" means a method of making a mouse
containing a Selected Mutation in a particular portion of a gene using standard
homologous recombination techniques.
1.17 "Incyte Know-How" means [**].
1.18 "Incyte LifeSeq(R) Gold Database" has the meaning set forth in the
LifeSeq Gold Collaborative Agreement between Incyte and Lexicon of even date
herewith.
1.19 "Incyte Patent Rights" means [**].
1.20 "Incyte Technology" means the Incyte Know-How and the Incyte
Patent Rights.
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1.21 "IND" means an Investigational New Drug application filed with the
U.S. Food and Drug Administration or a similar application for the clinical
testing of a Product in human subjects filed with a foreign regulatory
authority.
1.22 "Invention" means any new and useful composition of matter,
process, product by process, machine or manufacture, including without
limitation, software or an arrangement or collection of data, or any new and
useful improvement thereof, whether or not patentable, which has been or is
discovered, conceived, developed or first reduced to practice by employees or
others acting on behalf of Lexicon or its Affiliates (either solely or jointly
with others), or by employees or others acting on behalf of Incyte or its
Affiliates (either solely or jointly with others), relating to a Research
Program Gene Product or Licensed Gene Product (including any Therapeutic Protein
or Diagnostic Product that incorporates or is derived from any such Research
Program Gene Product or Licensed Gene Product) or any use thereof.
1.23 "Joint Invention" means any new and useful composition of matter,
process, product by process, machine or manufacture, including without
limitation, software or an arrangement or collection of data, or any new and
useful improvement thereof, whether or not patentable, hereafter discovered,
conceived, made, developed or reduced to practice jointly by employees or others
acting on behalf of Incyte or its Affiliates, together with employees or others
acting on behalf of Lexicon or its Affiliates, relating to a Research Program
Gene Product or Licensed Gene Product (including any Therapeutic Protein or
Diagnostic Product that incorporates or is derived from any such Research
Program Gene Product or Licensed Gene Product) or any use thereof, for purposes
of which inventorship shall be determined in accordance with U.S. patent law.
1.24 "Joint Know-How" means all trade secrets and other rights in or to
Joint Inventions; provided, however, that the Joint Know-How excludes the Joint
Patent Rights. Joint Know-How shall constitute Confidential Information, as
defined in Section 1.5 and subject to the exceptions therein, of both parties.
1.25 "Joint Patent Rights" means (i) any United States and foreign patent
applications, including without limitation provisional patent applications,
hereafter owned, in whole or in part, by Lexicon or Incyte or having legal force
in any country, which claim a Joint Invention, (ii) any United States patents
and foreign patents issuing from such patent applications and (iii) any
substitutions, renewals, continuations, continuations-in-part, divisionals,
reissues, reexaminations or extensions of any of the foregoing.
1.26 "Lexicon Know-How" means [**].
1.27 "Lexicon Patent Rights" means [**].
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1.28 "Lexicon Technology" means the Lexicon Know-How and Lexicon Patent
Rights.
1.29 "Licensed Gene Product" means any Gene Product for which Incyte
and/or Lexicon is granted a license in the Commercialization Field pursuant to
Section 4.2 and/or 4.3, as applicable.
1.30 "Major Market" means the United States, the European Union (under
the centralized process or any other process), Germany, the United Kingdom,
France, Italy, Spain or Japan.
1.31 "Mutant Mouse" means mouse cell or mouse containing a Selected
Mutation in the murine ortholog of a Research Program Gene Product that is made
or produced by Lexicon under this Agreement. A "line of Mutant Mice" means
Mutant Mice having the same Selected Mutation.
1.32 "Net Sales" means, with respect to a Product, the gross amount
invoiced by Incyte, Lexicon, sublicensees of Incyte or Lexicon, and their
respective Affiliates for sales of such Product to customers which are not
Affiliates (or which are Affiliates but are end users of such Product), less:
(a) trade, quantity and cash discounts actually allowed;
(b) discounts, refunds, rebates, chargebacks, retroactive price
adjustments, billing errors and any other allowances (including,
without limitation, government-mandated and managed health
care-negotiated rebates) actually granted which effectively reduce the
net selling price;
(c) product returns credits and allowances actually granted;
(d) any tax imposed on the production, sale, delivery or use of
the product (excluding federal, state or local taxes based on income);
(e) freight, postage, shipping, customs duties, excises,
tariffs, surcharges, other governmental charges (excluding federal,
state or local taxes based on income) and insurance charges actually
allowed or paid for delivery of Products;
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(f) payments or rebates paid with respect to such Product in
connection with state or federal Medicare, Medicaid or similar programs
in the United States or in connection with similar programs in other
countries in which there are sales; and
(g) adjustments for bad debts.
Such amounts shall be determined from the books and records of Incyte, Lexicon,
sublicensees of Incyte or Lexicon, and their respective Affiliates, as the case
may be, maintained in accordance with the generally accepted accounting
principles, consistently applied.
In the event the Product is sold as part of a Combination Product (as
defined below), the Net Sales from the Combination Product, for the purposes of
determining royalty payments, will be determined by multiplying the Net Sales of
the Combination Product by the fraction, A/A+B where A is the average sale price
of the Product when sold separately in finished form and B is the average sale
price of the other active compounds or ingredients in the Combination Product
sold separately in finished form.
In the event that the average sale price of the Product can be
determined but the average sale price of the other active compounds or
ingredients cannot be determined, Net Sales for purposes of determining royalty
payments will be calculated by multiplying the Net Sales of the Combination
Product by the fraction C/C+D where C is the selling party's average sales price
of the Product and D is the difference between the average selling price of the
Combination Product and the average selling price of the Product. If the average
sale price of the other active compounds or ingredients can be determined but
the average price of the Product cannot be determined, Net Sales for purposes of
determining royalty payments will be calculated by multiplying the Net Sales of
the Combination Product by the following formula: one minus C/C+D where C is the
average selling price of the other product(s) and D is the difference between
the average selling price of the Combination Product and the average selling
price of the other active compounds or ingredients.
In the event that the average sales price of both the Product and the
other active compounds or ingredients in the Combination Product cannot be
determined, the Net Sales of the Product shall be negotiated in good faith by
the parties.
The Net Sales price for a Combination Product in a given country will
be calculated once each calendar year and such price will be used during all
applicable royalty reporting periods for the entire calendar year for such
country, absent extraordinary conditions or events. When determining the average
sale price of a Product or the other active compounds or ingredients in the
Combination Product, the average sale price will be calculated using data
arising from the twelve (12) months preceding the calculation of the Net Sales
price for the Combination Product. As used above, the term "Combination Product"
means any Product sold in conjunction with any other active component(s)
(whether packaged together or in the same therapeutic formulation).
If Incyte, Lexicon, sublicensees of Incyte or Lexicon, or any of their
respective Affiliates sells any Product to a customer which also purchases other
products or services from such seller or any of its Affiliates in a bundled,
combination or capitated transaction (a "Bundled Transaction"), and such seller
discounts the sales price of the Product to a greater degree than
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such seller or its Affiliates generally discount the price of its other products
to such customer, then the aggregate amount received with respect to such
Bundled Transaction shall be allocated to Net Sales pursuant to the formula set
forth in Exhibit 1.32 hereto. For purposes of the foregoing, "discounting"
includes establishing the list price at lower than the seller's normal pricing
level.
Free samples of Product and the disposition of Product for, or the use
of Product in, pre-clinical or clinical (Phase 1 - 3) trials or other
market-focused (Phase 4) trials in which Product is provided to patients without
any payment shall not result in any Net Sales.
1.33 "OmniBank" or "OmniBank Library" means Lexicon's proprietary
library of embryonic stem cell clones containing gene trap events in particular
mouse genes, which genes are identified by DNA sequence from the trapped gene,
and which clones may or may not have lox sites, as more fully described in
Exhibit 1.33 hereto.
1.34 "OmniBank Method" means the method of making or developing a mouse
containing a Selected Mutation using gene trap insertion techniques with
embryonic stem cells retrieved from the OmniBank Library.
1.35 "Phase 2 Trial" means a human clinical trial in any country that
is intended to initially evaluate the effectiveness of a Product for a
particular indication or indications in patients with the disease or indication
under study or that would otherwise satisfy requirements of 21 CFR 312.21(b), or
its foreign equivalent. For purposes of this Agreement, "commencement of a Phase
2 Trial" for a Product shall mean the first introduction of such Product into a
human patient in a Phase 2 Trial.
1.36 "Phase 3 Trial" means a pivotal human clinical trial in any
country the results of which could be used to establish safety and efficacy of a
Product as a basis for a BLA or that would otherwise satisfy the requirements of
21 CFR 312.21(c) or its foreign equivalent. For purposes of this Agreement,
"commencement of a Phase 3 Trial" for a Product shall mean the introduction of
such Product into a human patient in a Phase 3 Trial.
1.37 "PMA" shall mean a Pre-Market Approval Application, 510(k) notice
or similar application for marketing approval of a product for use in the
Diagnostic Field submitted to the FDA, or its foreign equivalent.
1.38 "Product" means (i) any Therapeutic Protein that incorporates or
is derived from a Licensed Gene Product, (ii) any Diagnostic Product which uses,
is based on or incorporates a Licensed Gene Product (for purposes of which, a
product or service shall be deemed to be based on a Licensed Gene Product if it
measures the presence or activity of any such Licensed Gene Product), and (iv)
any Drug Product that [**].
1.39 "Product Patent Rights" means (i) the United States and foreign
patents owned by or licensed (with rights to sublicense) to Incyte, Lexicon or
their respective Affiliates which claim a composition, method, or process
relating to a Product, (ii) the United States and foreign patent applications,
heretofore or hereafter filed by Incyte, Lexicon or their respective Affiliates
or having legal force in any country, which claim a composition, method, or
process relating to a
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Product, (iii) any United States patents and foreign patents issuing from such
patent applications and (iv) any substitutions, renewals, continuations,
continuations-in-part, divisionals, reissues, reexaminations or extensions of
any of the foregoing.
1.40 "Project Coordinator" has the meaning specified in Section 3.1
hereof.
1.41 "Receiving Party" has the meaning set forth in Section 1.5 hereof.
1.42 "Regulatory Approval" means, with respect to any country in the
world, applications or approvals of any national, supra-national, regional,
state or local regulatory agency, department, bureau, commission, council or
other governmental entity, necessary for the lawful manufacture, distribution,
use, import, export or sale of Product(s) in such country.
1.43 "Research Field" means use by Incyte, Lexicon and their respective
Affiliates, at the internal research facilities of Incyte, Lexicon and their
respective Affiliates, for research directed toward the discovery,
identification, selection, or characterization of Products.
1.44 "Research Program Gene Product" means any Gene Product that is
selected for research by the Steering Committee in accordance with Section 2.3,
including an Eligible TP Gene Product. A Gene Product shall cease to be a
Research Program Gene Product upon (i) the Steering Committee's selection of a
replacement for such Gene Product in accordance with Section 2.5.2, 2.5.3 or
2.5.4 or (ii) such Gene Product becoming a Licensed Gene Product, except that if
such Gene Product remains an Eligible TP Gene Product, it shall remain a
Research Program Gene Product for purposes of Therapeutic Protein research until
it is licensed as a Therapeutic Protein or ceases to be an Eligible TP Gene
Product.
1.45 "Selected Mutation" means a specific mutation in a particular
portion of a gene of a mouse embryonic stem cell that is created using the
OmniBank Method or Homologous Recombination.
1.46 "Steering Committee" has the meaning specified in Section 3.1
hereof.
1.47 "Territory" means all countries and jurisdictions throughout the
world.
1.48 "Therapeutic Field" shall mean the prevention or treatment of any
disease, state or condition in humans.
1.49 "Therapeutic Protein" shall mean any product or service, including
gene therapy, which uses a protein, peptide or polypeptide which is a Gene
Product in the treatment or prevention of any disease, state or condition in
humans.
1.50 "Third Party" means any person or entity other than Lexicon or
Incyte and their respective Affiliates.
1.51 "Valid Claim" means either (i) a claim of an issued and unexpired
patent which has not been held permanently revoked, unenforceable or invalid by
a decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal and that is not
admitted to be invalid or unenforceable through reissue,
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disclaimer or otherwise, or (ii) a claim of a pending patent application that
[**]and that has not been abandoned or finally rejected without the possibility
of appeal or refiling.
ARTICLE 2. RESEARCH PROGRAM
2.1 Scope of Research Program. During the Collaboration Term, Incyte
and Lexicon will designate an aggregate of up to two hundred fifty (250)
Research Program Gene Products from Incyte's LifeSeq(R) Gold Database for
potential development as Therapeutic Proteins. Lexicon will develop Mutant Mice
for each Gene Product designated as a Research Program Gene Product and will
conduct analyses directed toward the determination of the pharmaceutical utility
of such Research Program Gene Products, as provided herein. Each party shall
have rights to select and obtain exclusive licenses in the Commercialization
Field for Therapeutic Proteins that incorporate or are derived from Research
Program Gene Products, and each party shall obtain non-exclusive licenses in the
Commercialization Field to Research Program Gene Products (including any
Diagnostic Product that incorporates or is derived from any such Research
Program Gene Product, as well as Drug Products discovered by a party through use
of any such Research Program Gene Products), in each case on the terms set forth
herein.
2.2 Proposal of Gene Products for Research Program. During the
Collaboration Term, Incyte and Lexicon will evaluate Gene Products from Incyte's
LifeSeq Gold Database for potential designation as Research Program Gene
Products. Upon the proposal by either party that a Gene Product be considered
for designation as a Research Program Gene Product, Incyte and Lexicon shall
provide the Steering Committee with the following information:
(a) all relevant scientific data in Incyte's possession (and
which Incyte has the right to disclose to Lexicon) and all relevant
scientific data in Lexicon's possession (and which Lexicon has the
right to disclose to Incyte) relating specifically to such Gene
Product, including, without limitation, any bioinformatics and
expression analyses and mouse phenotypic information conducted by (i)
Incyte with respect to such Gene Product, to the extent such data is
not accessible through Incyte's LifeSeq Gold Database or (ii) Lexicon
with respect to such Gene Product to the extent data is not accessible
through Lexicon's LexVision Database;
(b) whether such Gene Product (and/or any Therapeutic Protein
or Diagnostic Product that incorporates or is derived from any such
Gene Product) is the subject of a Valid Claim within the Incyte Patent
Rights or the Lexicon Patent Rights, respectively;
(c) whether such Gene Product is subject to an outstanding
option or license granted by Incyte under the Incyte Patent Rights for
the development and commercialization of Therapeutic Proteins;
(d) whether Incyte has the right to retain for itself and/or
grant to Lexicon, under the Incyte Patent Rights and Incyte Know-How
related to such Gene Product, an exclusive option and license under
Incyte Patent Rights in the Commercialization Field with respect to
Therapeutic Proteins;
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(e) whether Lexicon has the right to retain for itself and/or
grant to Incyte, under the Lexicon Patent Rights and Lexicon Know-How
related to such Gene Product, an exclusive option and license under
Lexicon Patent Rights in the Commercialization Field with respect to
Therapeutic Proteins; and
(f) whether Incyte (independent of information gained from
customers and collaborators) or Lexicon (independent of information
gained from customers and collaborators), respectively, has knowledge
of any patent or published patent application owned by any Third Party
that may claim such Gene Product (including any Therapeutic Protein or
Diagnostic Product that incorporates or is derived from any such Gene
Product) or any use thereof (and, in the event Incyte or Lexicon,
respectively, has knowledge of any such patent or published patent
application, such party shall provide copies thereof to the Steering
Committee).
2.3 Selection of Research Program Gene Products.
2.3.1 The Steering Committee shall evaluate the information
contemplated by Section 2.2 with respect to each Gene Product proposed by a
party for designation as a Research Program Gene Product, and shall select and
designate Gene Products as Research Program Gene Products on the following
schedule:
AGGREGATE MINIMUM NUMBER OF
DEADLINE RESEARCH PROGRAM GENE PRODUCTS DESIGNATED
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*]
The Steering Committee may designate a greater number of Research Program Gene
Products at any time (up to the aggregate total of 250 Research Program Gene
Products contemplated hereby), and Lexicon may, in its discretion, initiate the
development of Mutant Mice for such greater number of Research Program Gene
Products; provided that Lexicon shall be obligated to initiate the development
of Mutant Mice for no more than the minimum number to be designated within any
time period.
2.3.2 It is the intent of the parties that all Research Program Gene
Products be designated by consensus among the members of the Steering Committee.
In the event the Steering Committee is unable, using good faith efforts, to
reach agreement on the full minimum number of Research Program Gene Products to
be designated in any period, however, the members of the Steering Committee
appointed by Incyte and the members of the Steering Committee appointed by
Lexicon, respectively, shall each be entitled to designate an equal number of
Gene Products from Incyte's LifeSeq Gold database as Research Program Gene
Products until the minimum number of Research Program Gene Products for such
period has been designated. Such designation shall be made in writing, delivered
to the other party no later than [**] following the applicable designation
deadline.
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2.4 Exclusivity for Research Program Gene Products. To the extent that
Incyte has the right to do so under its existing contractual arrangements, upon
the designation of a Gene Product as a Research Program Gene Product, Incyte
shall reserve for itself or grant to Lexicon, under and for purposes of this
Agreement, an exclusive option to obtain an exclusive license in the
Commercialization Field with respect to Therapeutic Proteins under the Incyte
Patent Rights related to such Gene Product, such that the rights so reserved or
subject to such option shall be unavailable to subscribers to Incyte's LifeSeq
Gold database during the period of time that such Gene Product remains a
Research Program Gene Product. The parties acknowledge that Incyte has granted
non-exclusive rights under the Incyte Patent Rights and Incyte Know-How in the
Commercialization Field with respect to Drug Products and Diagnostic Products
and under Incyte Know-How with respect to Therapeutic Proteins related to any
such Gene Product, and has contractual obligations to subscribers to Incyte's
LifeSeq Gold database under which Incyte may not reserve exclusive rights with
respect thereto.
2.5 Development of Mutant Mice for Research Program Gene Products.
2.5.1 Within [**] after the designation of a Research Program
Gene Product, subject to the terms of this Agreement, Lexicon shall
commence the development of a line of Mutant Mice containing a Selected
Mutation for such Research Program Gene Product. Lexicon shall generate
such Mutant Mice by the OmniBank Method if the selected Research
Program Gene Product is represented in OmniBank, and will generate such
Mutant Mice by Homologous Recombination if the selected Research
Program Gene Product is not represented in OmniBank.
2.5.2 Lexicon shall use reasonable efforts to develop a line of
Mutant Mice for each Research Program Gene Product within [**] of the
designation of such Research Program Gene Product and to complete the
development of such line of Mutant Mice within [**] thereafter.
Development of a line of Mutant Mice shall be deemed complete when (i)
Lexicon has obtained a sufficient number of Mutant Mice that are
homozygous at the Selected Mutation to conduct the analyses of such
homozygous Mutant Mice contemplated by Section 2.6 or (ii) the Steering
Committee has determined that it is not reasonably practicable to
obtain such homozygous Mutant Mice and Lexicon has obtained a
sufficient number of Mutant Mice that are heterozygous at the Selected
Mutation to conduct analyses of such heterozygous Mutant Mice. Incyte
recognizes that the production of Mutant Mice involves a number of
technologically complex steps and that technical obstacles may prevent
Lexicon from producing Mutant Mice or may delay the production of
Mutant Mice beyond the schedule provided for herein. Lexicon shall
promptly notify the Steering Committee in writing of any such technical
obstacle encountered, the basis for such obstacle, its analysis of
whether the obstacle can be overcome and the time required to do so.
If, after consultation with the Steering Committee, Lexicon determines
that production and completion of Level 1 Analysis of a line of Mutant
Mice for a Research Program Gene Product is not feasible, using
commercially reasonable efforts, within [**] after the designation of
such Research Program Gene Product, the Steering Committee may
designate an alternative Research Program Gene Product in replacement
of such Research Program Gene Product.
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2.5.3 Lexicon shall not be obligated to develop a line of
Mutant Mice where Lexicon reasonably believes, with the advice of its
counsel and the Steering Committee, that such action would infringe
upon the intellectual property rights of a Third Party. In such event,
the Steering Committee shall adopt an acceptable solution including,
but not limited to, the designation of an alternative Research Program
Gene Product.
2.5.4 At any time prior to Lexicon's initiation of a project
for the development of a line of Mutant Mice for a Research Program
Gene Product, the Steering Committee may elect to substitute a new
Research Program Gene Product for a previously-designated Research
Program Gene Product if it is determined that a Third Party holds a
patent or patent application claiming the composition of matter of the
full-length gene comprising such previously-designated Research Program
Gene Product with a priority date earlier than that of any patent or
patent application within the Incyte Patent Rights.
2.5.5 Subject to the provisions of Sections 2.5.3 and 2.5.4
(and any designation of replacement Research Program Gene Products
under Section 2.5.2), and without prejudice to its other obligations
under this Section 2.5, Lexicon will use (i) reasonable efforts to
develop lines of Mutant Mice for all Research Program Gene Products
designated under this Agreement and (ii) reasonable best efforts to
develop lines of Mutant Mice for no fewer than [**] of the Research
Gene Products designated under this Agreement; provided that if a line
of Mutant Mice developed by Lexicon for a Research Program Gene Product
is embryonic lethal or recessive lethal, Lexicon shall nevertheless,
for purposes of this Section 2.5.5, be deemed to have completed the
development of a line of Mutant Mice for such Research Program Gene
Product.
2.6 Analysis of Mutant Mice for Research Program Gene Products.
Promptly following the completion of development of a line of Mutant Mice as
provided in Section 2.5, Lexicon shall use reasonable best efforts to conduct
the analyses of such line of Mutant Mice contemplated by the research plan
described in Exhibit 2.6. Lexicon shall conduct one or more ▇▇▇▇▇ ▇ analyses of
Mutant Mice as contemplated by the research plan described in Exhibit 2.6 for
[**] of all Research Program Gene Products. Lexicon shall provide the results of
the analyses for a Research Program Gene Product to the Steering Committee,
together with any supporting data reasonably requested by any member to the
Steering Committee, promptly following the completion of such analyses by
Lexicon. Upon Lexicon's delivery of such results to the members of the Steering
Committee, such Research Program Gene Product shall be an "Eligible TP Gene
Product" for purposes of Section 2.10 and a Licensed Gene Product for purposes
of Section 4.3.
2.7 Option to Obtain Mutant Mice upon Request by Incyte for Research
Program Gene Products. Following Lexicon's delivery to the members of the
Steering Committee of the results contemplated by Section 2.6 with respect to a
Research Program Gene Product, Incyte shall have the option, exercisable by
delivery to Lexicon of a signed material transfer agreement in the form attached
hereto as Exhibit 2.7, to obtain Mutant Mice for a Research Program Gene Product
on the terms contemplated by such material transfer agreement; provided that
Incyte's option to obtain such Mutant Mice shall expire if not exercised within
[**] after the time such Research Program Gene Product becomes an Eligible TP
Gene Product.
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2.8 Additional Preclinical Research of Research Program Gene Products.
During the Collaboration Term, each party may conduct, in its sole discretion,
such additional preclinical research in the Research Field with respect to
Research Program Gene Products (including any Therapeutic Protein or Diagnostic
Product that incorporates or is derived from any such Research Program Gene
Product) as such party reasonably desires; provided, however, that (i) such
party shall give prior written notice to the other party of the nature and scope
of such additional preclinical research prior to commencing such research and
(ii) shall provide the results of such additional preclinical research to the
Steering Committee, together with any supporting data reasonably requested by
any member to the Steering Committee, promptly following the completion of such
additional preclinical research and in any event prior to the next Selection
Meeting (as defined in Section 2.10 below).
2.9 Reports. Lexicon shall keep the Steering Committee reasonably
informed of the progress of its activities under this Article 2. At a minimum,
within [**] following the last day of each calendar quarter during the
Collaboration Term, Lexicon shall prepare, and provide to the Steering
Committee, a reasonably detailed written summary report which shall describe the
work performed by Lexicon during the preceding calendar quarter, including,
without limitation, the status of Lexicon's development of Mutant Mice and the
conduct of the analyses of Research Program Gene Products contemplated by
Section 2.6. Upon request by any member of the Steering Committee for data that
supports the summary report, Lexicon shall promptly submit such data to the
Steering Committee in writing.
2.10 Process to Obtain Commercial Licenses for Therapeutic Proteins. At
each regularly scheduled quarterly meeting of the Steering Committee at which
there have existed [**] Research Program Gene Products that (i) have been
Eligible TP Gene Products for a period of at least [**] and (ii) were not
Eligible TP Gene Products at the prior Selection Meeting (a "Selection
Meeting"), the parties (acting through their Steering Committee representatives)
shall have the right to select Eligible TP Gene Products to become Licensed Gene
Products and obtain licenses with respect to Therapeutic Protein(s)
corresponding to such Eligible TP Gene Product in the Commercialization Field
pursuant to Section 4.2 as follows:
2.10.1 At the first Selection Meeting, Incyte shall have the
first right to select [**} Eligible TP Gene Product to become a
Licensed Gene Product and obtain a commercial license under Section 4.2
with respect thereto.
2.10.2 At the first Selection Meeting, after Incyte has
selected, or elected not to select (under Section 2.10.5 below), [**]
Eligible TP Gene Product to become a Licensed Gene Product and to
receive a commercial license under Section 4.2 below with respect
thereto, Lexicon shall have the next right to select up to [**]
Eligible TP Gene Products to become a Licensed Gene Product(s) and
obtain a commercial license(s) under Section 4.2 with respect thereto.
2.10.3 At each Selection Meeting, after a party has selected
since the last selection of an Eligible TP Gene Product by the other
party (other than selections made under Section 2.10.5 below) [**]
Eligible TP Gene Products to become Licensed Gene Products and to
receive commercial licenses under Section 4.2 with respect thereto, the
other party shall have the next right to select [**] Eligible TP
Gene Products to
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become Licensed Gene Products and obtain commercial licenses under
Section 4.2 with respect thereto.
2.10.4 At any Selection Meeting, if there exist less than [**]
Eligible TP Gene Products that were not Eligible TP Gene Products at
the prior Selection Meeting, then the party with the right to make the
next selection of an Eligible TP Gene Product shall have the right to
suspend further selection until the next Selection Meeting.
2.10.5 At any Selection Meeting, if there exist [**] Eligible
TP Gene Products that were not Eligible TP Gene Products at the prior
Selection Meeting, and the party (the "Delaying Party") with the right
to make the next selection under this Section 2.10 elects not to make
such selection prior to the end of such Selection Meeting, then the
other party (the "Non-Delaying Party") shall have the right at such
Selection Meeting, in its discretion, to accelerate its right to select
up to [**] Eligible TP Gene Products to become Licensed Gene Products
and obtain commercial licenses under Section 4.2 with respect thereto.
Each Eligible TP Gene Product selected by the Non-Delaying Party shall
be counted against the number of Eligible TP Gene Products that may be
selected by the Non-Delaying Party in accordance with Section 2.10.3 in
future Selection Meetings. After the Non-Delaying Party has completed
such accelerated selection(s), further selections shall be suspended
until the next Selection Meeting, at which time the parties' rights to
select Eligible TP Gene Products shall resume in accordance with
Section 2.10.3.
2.10.6 If any Eligible TP Gene Product fails to become a
Licensed Gene Product under Section 4.2 within [**] after such Research
Program Gene Product becomes an Eligible TP Gene Product, the senior
business development officers of each party, together with such other
persons as they mutually agree, shall meet to discuss development and
commercialization opportunities (including, without limitation, through
joint development or licensing efforts) for such Eligible TP Gene
Product and Therapeutic Protein(s) corresponding to such Eligible TP
Gene Product directed thereto, and whether the time period specified in
Section 2.10.7 should be extended to permit the parties to pursue such
opportunities.
2.10.7 Unless otherwise agreed in writing by the parties, each
Eligible TP Gene Product that fails to become a Licensed Gene Product
under Section 4.2 within [**] after such Gene Product becomes an
Eligible TP Gene Product shall thereafter cease to be a Research
Program Gene Product or an Eligible TP Gene Product. Following such
time, neither party shall thereafter have the right to select such Gene
Product as a Licensed Gene Product under Section 4.2. [**]
ARTICLE 3. STEERING COMMITTEE
3.1 Members of Steering Committee; Project Coordinators. The parties
shall establish a steering committee (the "Steering Committee"), which shall
comprise three representatives designated by each party (or such other number as
the parties may agree). The initial members of the Steering Committee are set
forth on Exhibit 3.1. The members of the
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Steering Committee appointed by each party shall include at least one senior
scientific executive. Members of the Steering Committee may be represented at
any meeting by a designee appointed by such member for such meeting who has
authority to act on behalf of such member. The chairperson of the Steering
Committee shall be designated annually on an alternating basis between the
parties. The initial chairperson shall be selected by Incyte and is designated
on Exhibit 3.1. The party not designating the chairperson shall designate one of
its representative members as secretary to the Steering Committee for such year.
Each party shall designate an individual (a "Project Coordinator"), who may, but
need not, be a member of the Steering Committee to coordinate, on its behalf,
the day-to-day interaction of and communication between the parties under this
Agreement. Each Project Coordinator shall possess the education, training and
experience necessary to make him or her reasonably technically qualified to
serve as a Project Coordinator. The initial Project Coordinators are set forth
on Exhibit 3.1. Each party shall be free to replace its representative members
of the Steering Committee and its Project Coordinator with new appointees who
have authority to act on behalf of such party, on notice to the other party.
3.2 Responsibilities of Steering Committee. The Steering Committee shall
be responsible for overseeing and directing the parties' interaction and
performance of their respective obligations under this Agreement. Without
limiting the generality of the foregoing, its duties shall include:
(a) selection and designation of Gene Products from Incyte's
LifeSeq Gold database as Research Program Gene Products;
(b) prioritizing and reviewing Lexicon's efforts to develop
Mutant Mice and conduct analyses of Research Program Gene Products;
(c) reviewing and, if appropriate, modifying the research plan
contemplated by Section 2.6 for specific Research Program Gene
Products;
(d) reviewing the results of the analyses of Research Program
Gene Products; and
(e) addressing issues and resolving differences that may arise
between the parties.
3.3 Meetings of Steering Committee. The Steering Committee shall meet
at least once every calendar quarter, and more frequently as the parties deem
appropriate, on such dates and at such times as the parties shall agree, on ten
(10) days' written notice to the other party unless such notice is waived by the
parties. The first meeting of the Steering Committee shall take place within
thirty (30) days after the Effective Date, at Incyte's facility in Palo Alto,
California. The Steering Committee may convene or be polled or consulted from
time to time by means of telecommunications, videoconferences or correspondence,
as deemed necessary or appropriate by the parties. To the extent that meetings
are held in person, they shall alternate between the offices of the parties
unless the parties otherwise agree. The chairperson shall be responsible for
sending notices of meetings to all members.
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3.4 Decisions.
3.4.1 Quorum; Voting. A quorum for a meeting of the Steering
Committee shall require the presence of at least one Lexicon member (or
designee) and at least one Incyte member (or designee) in person or by
telephone. All decisions made or actions taken by the Steering
Committee shall be made unanimously by its members, with the Lexicon
members cumulatively having one vote and the Incyte members
cumulatively having one vote.
3.4.2 Dispute Resolution. Except as provided in Section 2.3.1,
in the event that unanimity cannot be reached by the Steering Committee
with respect to a matter that is a subject of its decision-making
authority, then the matter shall be referred for further review and
resolution to the Chief Executive Officer of Incyte, or such other
similar position designated by Incyte from time to time, and the Chief
Executive Officer of Lexicon, or such other similar position designated
by Lexicon from time to time. The designated officers of each party
shall use reasonable efforts to resolve the matter within [**] after
the matter is referred to them. If the designated officers cannot
resolve any matter described in Section 3.2 within such [**] period,
the matter shall be decided by the designated officer of Lexicon in
good faith, taking into account the reasonable commercial interests of
Incyte and the express provisions of this Agreement.
3.5 Minutes. Within fifteen (15) days after each Steering Committee
meeting, the secretary of the Steering Committee shall prepare and distribute
minutes of the meeting, which shall provide a description in reasonable detail
of the discussions had at the meeting and a list of any actions, decisions or
determinations approved by the Steering Committee. The secretary shall be
responsible for circulation of all draft and final minutes. Draft minutes shall
be first circulated to the chairperson, edited by the chairperson and then
circulated in final draft form to all members of the Steering Committee
sufficiently in advance of the next meeting to allow adequate review and comment
prior to the meeting. Minutes shall be approved or disapproved, and revised as
necessary, at the next meeting. Final minutes shall be distributed to the
members of the Steering Committee.
3.6 Term. The Steering Committee shall exist until the termination or
expiration of the Collaboration Term and for such longer period as necessary to
perform the responsibilities assigned to it under this Agreement.
3.7 Expenses. Each party shall be responsible for all travel and
related costs for its representatives to attend meetings of, and otherwise
participate on, the Steering Committee.
ARTICLE 4. GRANTS OF RIGHTS
4.1 Grant of Rights and Licenses in the Research Field.
4.1.1 By Incyte. Subject to the terms of this Agreement, during
the Collaboration Term, Incyte hereby grants to Lexicon and its
Affiliates, within the Territory, a non-exclusive right and license
(without any right to sublicense) under the Incyte Patent Rights and
Incyte Know-How with respect to Research Program Gene
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Products and, to the extent licensed to Lexicon in the
Commercialization Field, Licensed Gene Products solely in the Research
Field.
4.1.2 By Lexicon. Subject to the terms of this Agreement,
during the Collaboration Term, Lexicon hereby grants to Incyte and its
Affiliates, within the Territory, a non-exclusive right and license
(without any right to sublicense) under the Lexicon Patent Rights and
Lexicon Know-How with respect to Research Program Gene Products and, to
the extent licensed to Incyte in the Commercialization Field, Licensed
Gene Products solely in the Research Field.
4.1.3 Restrictions on Clinical Development of Therapeutic
Proteins. Neither party nor their respective Affiliates shall submit an
IND for any Therapeutic Protein that incorporates or is derived from
any Research Program Gene Product, or administer to humans any such
Therapeutic Protein, unless and until such party has received a license
under Section 4.2 for such Gene Product in the Commercialization Field.
4.2 Grant of Rights and Licenses to Therapeutic Proteins in the
Commercialization Field.
4.2.1 By Incyte. Subject to the terms of this Agreement, with
respect to Gene Products selected for a Therapeutic Protein license by
Lexicon in accordance with Section 2.10, Incyte hereby grants to
Lexicon and its Affiliates, within the Territory, (i) a non-exclusive
license, with the right to sublicense under Incyte Know-How with
respect to Licensed Gene Products to discover, develop, make, have
made, import, use, have used, offer for sale, sell and have sold
Therapeutic Proteins in the Commercialization Field and (ii) an
exclusive license, with the right to sublicense, under the Incyte
Patent Rights and Incyte's interest in any Joint Patent Rights and
Joint Know-How with respect to Licensed Gene Products (including any
Therapeutic Protein that incorporates or is derived from any such
Licensed Gene Product) to discover, develop, make, have made, import,
use, have used, offer for sale, sell and have sold Therapeutic Proteins
in the Commercialization Field. Any sublicense under this Section 4.2.1
shall be set forth in a written agreement containing confidentiality,
non-use, ownership of intellectual property and audit provisions
consistent with and no less restrictive than those contained herein,
shall be subject and subordinate to the terms and conditions of this
Agreement, and shall obligate the sublicensee to make the milestone and
royalty payments required hereunder; provided that Lexicon shall remain
responsible for all payments due to Incyte hereunder. Lexicon shall
provide Incyte with a copy of each sublicense agreement promptly after
executing the same; provided, however, that subject to the exceptions
set forth in Section 1.6, each such sublicense agreement shall be
Confidential Information of Lexicon.
4.2.2 By Lexicon. Subject to the terms of this Agreement, with
respect to Gene Products selected for a Therapeutic Protein license by
Incyte in accordance with Section 2.10, Lexicon hereby grants to Incyte
and its Affiliates, within the Territory, an exclusive license, with
the right to sublicense, under the Lexicon Patent Rights, Lexicon
Know-How and Lexicon's interest in any Joint Patent Rights and Joint
Know-How with respect to Licensed Gene Products (including any
Therapeutic Protein that incorporates or is
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derived from any such Licensed Gene Product) to discover, develop,
make, have made, import, use, have used, offer for sale, sell and have
sold Therapeutic Proteins in the Commercialization Field. Any
sublicense under this Section 4.2.2 shall be set forth in a written
agreement containing confidentiality, non-use, ownership of
intellectual property and audit provisions consistent with and no less
restrictive than those contained herein, shall be subject and
subordinate to the terms and conditions of this Agreement, and shall
obligate the sublicensee to make the milestone and royalty payments
required hereunder; provided that Incyte shall remain responsible for
all payments due to Lexicon hereunder. Incyte shall provide Lexicon
with a copy of each sublicense agreement promptly after executing the
same; provided, however, that subject to the exceptions set forth in
Section 1.6, each such sublicense agreement shall be Confidential
Information of Incyte.
4.3 Grant of Rights and Licenses to Products Other than Therapeutic
Proteins in the Commercialization Field.
4.3.1 By Incyte. Subject to the terms of this Agreement, Incyte
hereby grants to Lexicon and its Affiliates, within the Territory, a
non-exclusive license, with the limited right to sublicense subject to
the conditions of Section 4.3.3, under the Incyte Patent Rights, Incyte
Know-How and Incyte's interest in any Joint Patent Rights and Joint
Know-How with respect to Licensed Gene Products (including any
Diagnostic Product that incorporates or is derived from any such
Licensed Gene Product) to discover, develop, make, have made, import,
use, have used, offer for sale, sell and have sold Diagnostic Products
and Drug Products in the Commercialization Field.
4.3.2 By Lexicon. Subject to the terms of this Agreement,
Lexicon hereby grants to Incyte and its Affiliates, within the
Territory, a non-exclusive license, with the limited right to
sublicense subject to the conditions of Section 4.3.3, under the
Lexicon Patent Rights, Lexicon Know-How and Lexicon's interest in any
Joint Patent Rights and Joint Know-How with respect to Licensed Gene
Products (including any Diagnostic Product that incorporates or is
derived from any such Licensed Gene Product) to discover, develop,
make, have made, import, use, have used, offer for sale, sell and have
sold Diagnostic Products and Drug Products in the Commercialization
Field.
4.3.3 Conditions for Grant of Sublicenses. The parties and
their respective Affiliates shall have the limited right to grant
sublicenses under the licenses granted under this Section 4.3, on a
Licensed Gene Product-by-Licensed Gene Product basis; provided,
however, that without the prior written consent of the party granting a
license under this Section 4.3, no such sublicense with respect to a
Licensed Gene Product (including any Diagnostic Product that
incorporates or is derived from any such Licensed Gene Product) may be
granted to any Third Party in the absence of (i) a corresponding
license or sublicense of rights to a given Drug Product discovered,
researched and under bona fide commercial development (at least through
the stage of the demonstration of pre-clinical efficacy in animal
studies) by the party granting such sublicense and (ii) the license or
sublicense of patent rights pertaining thereto owned by, licensed to or
controlled by the party granting such sublicense. Except as provided in
this Section 4.3.3 (and the relevant provisions of Section 4.3.1 or
4.3.2, as applicable), neither party nor any
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of their Affiliates shall have any right to grant any sublicense under
the licenses granted to such party under this Section 4.3.
4.4 No Grant of Other Technology or Patent Rights. Except as otherwise
expressly provided in this Agreement, under no circumstances shall a party
hereto, as a result of this Agreement, obtain any ownership interest in or other
right to any technology, know-how, patents, patent applications, gene or genomic
▇▇▇▇▇▇▇▇ ▇▇▇▇ or information, products, or biological materials of the other
party, including items owned, controlled or developed by, or licensed to, the
other party, or transferred by the other party to said party, at any time
pursuant to this Agreement.
ARTICLE 5. PAYMENTS
5.1 Research Funding. In consideration for and as a contribution toward
the Lexicon's costs of development and analysis of Mutant Mice relating to
Research Program Gene Products, Incyte shall provide Lexicon with research
funding on the following schedule:
(a) [**} payable [**], for the research to be conducted during
[**] of the Collaboration Term;
(b) [**] on [**], for the research to be conducted during [**]
of the Collaboration Term;
(c) [**] for the research to be conducted during the [**] of
the Collaboration Term, payable [**]; and
(d) [**]for the research to be conducted during [**] of the
Collaboration Term, payable [**].
In the event of termination of the Collaboration Term on the third anniversary
of the Effective Date pursuant to Section 11.1.1, then the payments specified
under Section 5.1(c) and (d) above shall not be due to Lexicon.
5.2 Milestone Payments for Therapeutic Proteins and Drug Products.
5.2.1 The party that holds a commercial license under Section
4.2 and/or 4.3 with respect to a given Licensed Gene Product (the
"Product Licensee") shall pay the other party (the "Product Licensor")
the following milestone payments for each Therapeutic Protein that
incorporates or is derived from such Licensed Gene Product, and each
Drug Product that is discovered, identified, developed, made, selected,
characterized or determined to have utility using such Licensed Gene
Product:
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MILESTONE AMOUNT OF MILESTONE PAYMENT
--------- ---------------------------
THERAPEUTIC PROTEIN DRUG PRODUCT
------------------- ------------
[*
*]
5.2.2 Each Product Licensee shall promptly notify the Product
Licensor of the first occurrence of any milestone with respect to each
Therapeutic Protein that incorporates or is derived from such Licensed
Gene Product, and each Drug Product that is discovered, identified,
developed, made, selected, characterized or determined to have utility
using such Licensed Gene Product, and milestone payments shall be made
within [**] after such occurrence. Milestone payments shall be made
only once with respect to any given Product, regardless of the number
of indications sought (or approvals obtained) for such Product, whether
alone or in combination with other products, and regardless of any new
dosage strengths, preparations or forms of administration for such
Product.
5.2.3 If the Product Licensee with respect to a given Licensed
Gene Product develops a back-up Product for a Product (of the same
category; e.g., a Drug Product may be a back up Product for another
Drug Product, but may not be a back-up or follow-on Product for a
Therapeutic Protein) on which such Product Licensee is already making
milestone payments, then such Product Licensee may conduct clinical
development on such back-up or follow-on Products and shall not be
obligated to make any milestone payments with respect to any such
back-up or follow-on Product, except as otherwise provided below. In
the event that a particular Product is dropped from active clinical
development work or marketing for safety or efficacy reasons and is
specifically replaced with a different Product, such new Product shall
be deemed a "Replacement Product." A Product Licensee shall not be
obligated to make milestone payments that were earlier made with
respect to a dropped Product and replaced by a Replacement Product
(provided that the replacement Product is of the same category as the
dropped Product, as described above), but, subject to Section 5.2.2,
such Product Licensee shall pay all milestone payments for milestone
events achieved by such Replacement Product that had not been achieved
by such dropped Product.
5.3 Royalties Payable for Products.
5.3.1 Royalties on Net Sales. In consideration of the licenses
granted under Sections 4.2 and/or 4.3, as applicable, a Product
Licensee shall pay to the Product Licensor the following royalty on
cumulative Net Sales of each Product by the Product Licensee, its
sublicensee(s) and their respective Affiliates:
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THERAPEUTIC PROTEIN DRUG PRODUCT DIAGNOSTIC PRODUCT
------------------- ------------ ------------------
[*
*]
[**]
5.3.2 Royalty Reports; Exchange Rates. During the term of this
Agreement following the First Commercial Sale of any Product, the
Product Licensee shall, within [**] after each calendar quarter,
furnish to the Product Licensor a written quarterly report showing: (i)
the gross sales and Net Sales of Products sold during the reporting
period and the calculation of Net Sales from such gross sales; (ii) the
royalties payable in United States dollars which shall have accrued
hereunder in respect of such Net Sales; (iii) withholding taxes, if
any, required by law to be deducted in respect of such royalties; (iv)
the dates of the First Commercial Sales of Products in any country
during the reporting period; and (v) the exchange rates used in
determining the amount of United States dollars payable hereunder.
Royalties payable on sales in countries other than the United States
shall be calculated in accordance with the standard exchange rate
conversion practices used by the Product Licensee for financial
accounting purposes. If no royalty or payment is due for any royalty
period hereunder, the Product Licensee shall so report. Each Product
Licensee shall keep, and shall require its sublicensees to keep (all in
accordance with generally accepted accounting principles, consistently
applied), complete and accurate records in sufficient detail to
properly reflect all gross sales and Net Sales and to enable the
royalties payable hereunder to be determined.
5.3.3 Audits. Upon the written request of a Product Licensor,
the Product Licensee shall permit an independent certified public
accountant selected by the Product Licensor and acceptable to the
Product Licensee, which acceptance shall not be unreasonably withheld,
to have access, at reasonable times and during normal business hours,
to such records of the Product Licensee as may be reasonably necessary
to verify the accuracy of the royalty reports described herein, in
respect of any fiscal year ending not more than [**] prior to the date
of such request. The Product Licensor and the Product Licensee shall
use commercially reasonable efforts to schedule all such verifications
within [**] after the Product Licensor makes its written request. All
such verifications shall be conducted not more than once in, or with
respect to, each calendar year. The report of the Product Licensor's
independent certified public accountant shall be made available to both
parties. Subject to the Product Licensee's rights under Section 12.6,
in the event the Product Licensor's independent certified public
accountant concludes that additional royalties were owed to the Product
Licensor for such period, the additional royalty shall be paid by the
Product Licensee within [**] of the date the Product Licensor delivers
to the Product Licensee such independent certified public accountant's
written report so concluding, unless such report contains manifest
error. In the event the Product Licensor's independent certified public
accountant concludes that there was an overpayment of royalties to the
Product Licensor during such period, the overpayment shall be repaid by
the Product Licensor within [**] of the date the Product Licensor
received such independent certified public accountant's written report
so
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concluding, unless such report contains manifest error. The fees
charged by such independent certified public accountant shall be paid
by the Product Licensor unless such audit discloses an underpayment of
more than [**] of the amount due under this Agreement for the period in
question, in which case the Product Licensee will bear the full cost of
such audit. The Product Licensee shall include in each agreement with
each applicable sublicensee a provision requiring such sublicensee to
make reports to the Product Licensee, to keep and maintain records of
sales made pursuant to such agreement and to grant access to such
records by the Product Licensor's independent certified public
accountant to the same extent required of the Product Licensee under
this Agreement. The Product Licensor agrees that all information
subject to review under this Section 5.3.3 or under any agreement with
a sublicensee of the Product Licensee is confidential and that the
Product Licensor shall cause its independent certified public
accountant to retain all such information in confidence. The Product
Licensor's independent certified public accountant shall only report to
the Product Licensor as to the computation of the royalties and other
payments due to the Product Licensor under this Agreement and shall not
disclose to the Product Licensor any other information of the Product
Licensee or its sublicensee.
5.3.4 Royalty Payment Terms. Royalty payments for each calendar
quarter shall be due at the time the Product Licensee's report under
Section 5.3.2 for such calendar quarter shall be due.
5.4 Withholding Taxes. In the event that any royalties or other
payments due to a Product Licensor are subject to withholding tax required by
law to be paid to the taxing authority of any foreign country, the amount of
such tax may be withheld from the applicable royalties or other payment due the
Product Licensor. The Product Licensee shall promptly pay such tax on behalf of
the Product Licensor and shall furnish the Product Licensor with a certificate
of withholding tax so deducted for the Product Licensor's avoidance of duplicate
taxation in United States. The Product Licensee may not deduct any other
withholding or any other governmental charges from the payments agreed upon
under this Agreement, except to the extent same are paid on behalf of, or for
the benefit of, the Product Licensor. The Product Licensee shall maintain
official receipts of payment of any such withholding taxes and shall forward
such receipts to the Product Licensor.
5.5 No Duplication of Milestone Payments or Royalties. Milestone and
royalty payments made by either party with respect to Drug Products and
Diagnostic Products under this Agreement shall be in lieu of any milestone or
royalty payments that might otherwise be payable (i) by Incyte under the
LexVision Database and Collaboration Agreement between Lexicon and Incyte of
even date herewith and (ii) by Lexicon under the LifeSeq Gold Collaborative
Agreement between Lexicon and Incyte of even date herewith.
5.6 Blocked Currency. If by law, regulation, or fiscal policy of a
particular country, conversion into United States dollars or transfer of funds
of a convertible currency to the United States is restricted or forbidden, the
Product Licensee shall give the Product Licensor prompt written notice and shall
pay the royalty due under this Article 5 through such means or methods as are
lawful in such country as the Product Licensor may reasonably designate. Failing
the designation by the Product Licensor of such lawful means or methods within
[**] after such
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written notice is given to the Product Licensor, the Product Licensee shall
deposit such royalty payment in local currency to the credit of the Product
Licensor in a recognized banking institution designated by the Product Licensor,
or if none is designated by the Product Licensor within the [**] period
described above, in a recognized banking institution selected by the Product
Licensee and identified in a written notice to the Product Licensor by the
Product Licensee, and such deposit shall fulfill all obligations of the Product
Licensee to the Product Licensor with respect to such royalties.
5.7 Interest on Late Payments. A Product Licensor shall have the right
to seek to collect interest on any payments that are not paid on or before [**]
after the date such payments are due under this Agreement at a rate of [**] per
month, calculated on the total number of days payment is delinquent; provided,
however, that interest shall not accrue pursuant to this Section 5.7 on any
amounts payable under this Agreement with respect to which payment is disputed
in good faith; provided, further that interest shall accrue pursuant to this
Section 5.7 in the event such dispute has been resolved in the Product
Licensor's favor if payment is not made promptly thereafter.
5.8 Manner of Payment. Except as provided in Section 5.6, payments to
be made by a Product Licensee to the Product Licensor under this Agreement shall
be payable in United States dollars and shall be paid by check delivered to the
Product Licensor at its principal office at the address for notice indicated in
this Agreement or bank wire transfer in immediately available funds to such bank
account in the state in which such principal office is located as is designated
in writing by the Product Licensor from time to time.
ARTICLE 6. PRODUCT DEVELOPMENT DILIGENCE
6.1 Diligence Obligations.
6.1.1 Each party shall use commercially reasonable efforts to
actively research, develop and obtain regulatory approvals to market
Products in major markets throughout the world as expeditiously as
possible, and following such approval to maximize Net Sales of such
Products.
6.1.2 Without limiting the generality of the obligations set
forth in Section 6.1.1 above, each party that holds a commercial
license under Section 4.2 with respect to a given Licensed Gene
Product, its sublicensee(s) or their respective Affiliates shall file
an IND with the FDA for at least one (1) Therapeutic Protein that
incorporates or is derived from such Licensed Gene Product within [**]
after the effective date of the commercial license therefor. After the
filing of such IND, such party, its sublicensee or their respective
Affiliates shall have an active IND and be actively and diligently
conducting clinical trials in pursuit of regulatory approval in the
United States for a Therapeutic Protein that incorporates or is derived
from such Licensed Gene Product until at least one (1) such Therapeutic
Protein may be sold in the United States for use in the
Commercialization Field.
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6.2 Effect of Failure to Satisfy Diligence Obligations.
6.2.1 With respect to each Licensed Gene Product for which the
licensee fails to timely satisfy its diligence obligations under
Section 6.1 above, at the option of the other party as its sole and
exclusive remedy therefor, (i) the commercial licenses granted under
Section 4.2 with respect to such Licensed Gene Product shall terminate,
(ii) the licensee shall deliver to the other party copies of all data,
information, registrations and applications therefor relating to
Therapeutic Proteins that incorporate or are derived from such Licensed
Gene Product, and (iii) the other party shall have the right, within
the period of [**] following the licensee's delivery of such copies, to
obtain a commercial license under Section 4.2 for such Gene Product by
delivering written notice thereof to the licensee. If the other party
fails to exercise such right within the applicable time period, neither
party shall thereafter have the right to select such Gene Product as a
Licensed Gene Product under Section 4.2. 6.2.2 With respect to each
Gene Product for which a party exercises its right, under Section
6.2.1, to obtain a commercial license regarding such Gene Product, the
other party promptly shall deliver to such party all materials and
copies of all data and information, and shall assign and transfer to
such party registrations and applications therefor relating to
Therapeutic Proteins that incorporate or are derived from such Licensed
Gene Product.
6.3 Research and Development Reports. Each party shall keep complete
and accurate records of its activities conducted under this Agreement and the
results thereof. Within [**] after the end of each calendar year following the
end of the Collaboration Term, each party shall prepare and provide the other
party with a reasonably detailed written report of the activities conducted
under this Agreement, and the results thereof, through such date with respect to
the development and/or commercialization of Products.
ARTICLE 7. INTELLECTUAL PROPERTY
7.1 Ownership of Intellectual Property.
7.1.1 Ownership by Incyte of the Incyte Technology. Subject to
the rights and licenses granted under this Agreement, Incyte (and its
licensors, as applicable) shall own and retain all rights to the Incyte
Technology.
7.1.2 Ownership by Lexicon of the Lexicon Technology. Subject
to the rights and licenses granted under this Agreement, Lexicon (and
its licensors, as applicable) shall own and retain all rights to the
Lexicon Technology.
7.1.3 Ownership of Mutant Mice and Progeny. Subject to the
rights and licenses granted under this Agreement, Lexicon shall own and
retain all rights to the Mutant Mice and any successive
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generations thereof, including without limitation the right to use,
produce, breed, sell or license the Mutant Mice or any successive
generations thereof, and to use any cells derived by Lexicon from the
Mutant Mice or any successive generations thereof; provided, however,
that nothing in this Section 7.1.3 shall give Lexicon any ownership or
sublicensing rights in any Incyte Technology. To the extent that
Lexicon makes commercially available Mutant Mice and any successive
generations thereof, Lexicon shall provide Incyte access to such Mutant
Mice under terms substantially similar to those offered by Lexicon to
third parties generally.
7.1.4 Ownership of Inventions Arising from Analysis of Mutant
Mice. Subject to the rights and licenses granted under this Agreement,
Lexicon shall own and retain all rights to any Invention that is
conceived or first reduced to practice by Lexicon or any of its
Affiliates during the course of any analysis of Mutant Mice performed
under this Agreement, including, without limitation, during the course
of the analyses contemplated by Section 2.6 and the research plan
contemplated by Exhibit 2.6. Subject to the rights and licenses granted
under this Agreement, (i) each party shall own and retain all rights to
all Inventions which are not Joint Inventions and which are conceived
or reduced to practice solely by its employees, Affiliates or agents,
and (ii) the parties shall jointly own all Joint Inventions, and each
owner of a Joint Invention shall have and retain sole and exclusive
title to its interest in such Joint Invention, in each case that are
conceived or first reduced to practice by such party or any of its
Affiliates as a result of research conducted by such party, using
Mutant Mice or progeny thereof, outside the scope of the work performed
by Lexicon under this Agreement; provided, that, the responsibility for
patent filing with respect to each Joint Invention developed hereunder
shall be as set forth in Section 7.2.
7.1.5 Ownership of Other Intellectual Property. Subject to
Article 4 and Sections 7.1.1 through 7.1.4, (i) each party shall own
and retain all rights to all Inventions which are not Joint Inventions
and which are conceived or reduced to practice solely by its employees,
Affiliates or agents, and (ii) the parties shall jointly own all Joint
Inventions, and each owner of a Joint Invention shall have and retain
sole and exclusive title to its interest in such Joint Invention;
provided, that, the responsibility for patent filing with respect to
each Joint Invention developed hereunder shall be as set forth in
Section 7.2.
7.2 Responsibility for Patents.
7.2.1 Solely Owned Inventions. Each party shall have the right,
but not the obligation, at its sole expense, to prepare, file,
prosecute and maintain any patent applications, patents, registration
of copyrights or other intellectual property rights directed to any
Invention owned solely by such party. Notwithstanding the foregoing, in
the event that a party has granted the other party an exclusive license
under Section 4.2 under patent applications, patents, registration of
copyrights or other intellectual property rights directed to an
Invention owned solely by such party, such party shall keep the other
party reasonably informed of, and consulting with the other party with
respect to, all significant actions relating thereto, and permitting
the other party to reasonably participate, at its own expense, therein.
In the event such party elects not to continue to prosecute or maintain
any patent application or patent directed to such Invention, the other
party shall have the right to assume such responsibility at its own
expense, keeping the first party reasonably informed of, and consulting
with such party with respect to, all
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significant actions relating thereto, and permitting such party to
reasonably participate, at its own expense, therein.
7.2.2 Jointly Owned Inventions. The Steering Committee shall
determine whether, and in what jurisdictions, to seek patent protection
with respect to any Joint Invention that is not exclusively licensed to
a party. Lexicon shall have the first right to assume responsibility at
its sole expense for the preparation, filing, prosecution and
maintenance of any patent applications and patents, or registration of
copyright or other intellectual property rights directed to such Joint
Inventions, keeping Incyte reasonably informed of, and consulting with
Incyte with respect to, all significant actions relating thereto. In
addition, Lexicon shall permit Incyte to reasonably participate, at its
own expense, in preparation, filing, prosecution and maintenance of any
patent applications and patents, or registration of copyright or other
intellectual property rights directed to such Joint Inventions. If
Lexicon elects not to assume such responsibility, Incyte shall have the
right to do so at its sole expense, keeping Lexicon reasonably informed
of, and consulting with Lexicon with respect to, all significant
actions relating thereto. In addition, Incyte shall permit Lexicon to
reasonably participate, at its own expense, in preparation, filing,
prosecution and maintenance of any patent applications and patents, or
registration of copyright or other intellectual property rights
directed to such Joint Inventions. Notwithstanding the foregoing, in
the event that a party has granted the other party an exclusive license
under Section 4.2 under patent applications, patents, registration of
copyrights or other intellectual property rights directed to a Joint
Invention, the party holding the exclusive license shall have the first
right to assume responsibility at its sole expense for the preparation,
filing, prosecution and maintenance of any patent applications and
patents, or registration of copyright or other intellectual property
rights directed to such Joint Invention, keeping the licensing party
reasonably informed of, and consulting with such other party with
respect to, all significant actions relating thereto. In addition, the
party assuming such responsibility shall permit the other party to
reasonably participate, at its own expense, in preparation, filing,
prosecution and maintenance of any patent applications and patents, or
registration of copyright or other intellectual property rights
directed to such Joint Invention. In the event the party holding the
exclusive license elects not to assume such responsibility, or elects
not to continue to prosecute or maintain any patent application or
patent directed to such Joint Invention, the licensing party shall have
the right to assume such responsibility at its own expense, keeping the
party holding the exclusive license reasonably informed of, and
consulting with such party with respect to, all significant actions
relating thereto, and permitting such party to reasonably participate,
at its own expense, therein.
7.3 Patent Enforcement; Infringement. Each party shall have the right,
but not the obligation, to take action against any Third Party who is, or is
allegedly, infringing any patent contemplated by this Agreement that such party
owns or, in the field of an exclusive license granted hereunder, that such party
exclusively licenses hereunder. Each party shall promptly inform the other party
of any such infringement or alleged infringement of such other party's patents,
to the extent the first party is aware of same. In the event a party's exercise
of any of the rights granted to it hereunder gives rise to a claim of
infringement of a patent owned by a Third Party, the Steering Committee (or, if
no Steering Committee is then in existence, the Chief Executive
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Officer of Incyte, or such other appropriate officer of Incyte, and the Chief
Executive Officer of Lexicon, or such other appropriate officer of Lexicon)
shall confer and agree upon the best method for responding to and/or defending
against such claim and how the costs thereof and the payment of any damages
(and, in the event of any counterclaims, the receipt of any damages) with
respect thereto shall be allocated between the parties. Any such determination
shall take into account each party's significant interest in controlling any
defense of a claim made against itself and the respective parties'
indemnification obligations under Article 10.
ARTICLE 8. CONFIDENTIALITY
8.1 Nondisclosure Obligations.
8.1.1 General. Except as otherwise provided in this Article 8,
during the term of this Agreement and for a period of five years
thereafter, each Receiving Party shall maintain the Confidential
Information of each Disclosing Party in confidence and use it only for
purposes specifically authorized under this Agreement.
8.1.2 Limitations. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under
this Agreement and subject to advance written notification to the
Disclosing Party: (i) a party may disclose to Third Parties
Confidential Information it is otherwise obligated not to disclose
under this Section 8.1, to its Affiliates, sublicensees, consultants,
outside contractors and clinical investigators, on a strict
need-to-know basis for the purposes contemplated by this Agreement and
on condition that such entities or persons agree to keep the
Confidential Information confidential for the same time periods and to
the same extent as such party is required to keep the Confidential
Information confidential hereunder; and (ii) a party or its
sublicensees may disclose, using appropriate measures to preserve
confidentiality, such Confidential Information to government or other
regulatory authorities to the extent that such disclosure is reasonably
necessary to obtain authorizations to conduct clinical trials of, and
to commercially market, Products pursuant to this Agreement.
Furthermore, a Receiving Party may request permission from the
Disclosing Party to disclose such Confidential Information to the
extent that such disclosure is reasonably necessary to obtain patents
which such Receiving Party is permitted to obtain hereunder, which
permission shall not be unreasonably withheld or delayed.
8.1.3 Required Disclosure. A Receiving Party may disclose
Confidential Information pursuant to interrogatories, requests for
information or documents, subpoena, civil investigative demand issued
by a court or governmental agency or as otherwise required by law;
provided, however, that the Receiving Party shall notify the Disclosing
Party promptly upon receipt thereof, giving (where practicable) the
Disclosing Party sufficient advance notice to permit it to oppose,
limit or seek confidential treatment for such disclosure; and provided,
further, that the Receiving Party shall furnish only that portion of
the Confidential Information which it is advised by counsel is legally
required whether or not a protective order or other similar order is
obtained by the Disclosing Party.
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8.2 Injunctive Relief. The parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 8 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 8.
8.3 Publication. Incyte and/or Lexicon (each, a "Submitting Party") may
each publish or present data and/or results relating to a Research Program Gene
Product or a Licensed Gene Product or Product for which the Submitting Party
holds a license in the Commercialization Field, subject to the prior review of
the proposed disclosure by the other party (each, a "Reviewing Party"), solely
to determine (i) whether the proposed disclosure contains the Confidential
Information of the Reviewing Party or (ii) whether the information contained in
the proposed disclosure should be the subject of a patent application to be
filed by the Reviewing Party prior to such disclosure. Each Submitting Party
shall provide the Reviewing Party with the opportunity to review any proposed
abstract, manuscript or presentation which discloses the results of research
relating to the Research Program Gene Product, Licensed Gene Product or Product
by delivering a copy thereof to the Reviewing Party no less than [**] before its
intended submission for publication or presentation. The Reviewing Party shall
have [**] from its receipt of any such abstract, manuscript or presentation in
which to notify the Submitting Party in writing of any specific objections to
the disclosure, based on either the need to seek patent protection or concern
regarding the specific disclosure of the Confidential Information of the
Reviewing Party. In the event the Reviewing Party objects to the disclosure, the
Submitting Party agrees not to submit the publication or abstract or make the
presentation containing the objected-to information until the Reviewing Party is
given a reasonable additional period of time (not to exceed an additional [**])
to seek patent protection for any material in the disclosure which the Reviewing
Party believes is patentable (subject, in all events, to Section 8.2) or, in the
case of Confidential Information, to allow the Submitting Party to delete any
Confidential Information of the Reviewing Party from the proposed disclosure.
The Submitting Party agrees to delete from the proposed disclosure any
Confidential Information of the Reviewing Party upon request.
ARTICLE 9. REPRESENTATIONS AND WARRANTIES
9.1 Representations, Warranties and Covenants of Lexicon. Lexicon
represents and warrants to and covenants with Incyte that:
9.1.1 Lexicon is a corporation duly organized, validly existing
and in corporate good standing under the laws of
Delaware;
9.1.2 Lexicon has the corporate and legal right, authority and
power to enter into this Agreement, and to extend the rights and
licenses granted to Incyte in this Agreement;
9.1.3 Lexicon has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
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9.1.4 upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of Lexicon,
enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
9.1.5 the performance of Lexicon's obligations under this
Agreement will not conflict with its charter documents or result in a
breach of any agreements, contracts or other arrangements to which it
is a party; and
9.1.6 Lexicon will not during the term of this Agreement enter
into any agreements, contracts or other arrangements that would be
inconsistent with its obligations under this Agreement.
9.2 Representations, Warranties and Covenants of Incyte. Incyte
represents and warrants to and covenants with Lexicon that:
9.2.1 Incyte is a corporation duly organized, validly existing
and in corporate good standing under the laws of the state of
Delaware;
9.2.2 Incyte has the corporate and legal right, authority and
power to enter into this Agreement, and to extend the rights and
licenses granted to Lexicon in this Agreement;
9.2.3 Incyte has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
9.2.4 upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of Incyte
enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
9.2.5 the performance of its obligations under this Agreement
will not conflict with Incyte's charter documents or result in a breach
of any agreements, contracts or other arrangements to which it is a
party; and
9.2.6 Incyte will not after the Effective Date enter into any
agreements, contracts or other arrangements that would be inconsistent
with its obligations under this Agreement.
9.3 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY GENE PRODUCT,
MUTANT MOUSE, PATENT RIGHTS, GOODS, SERVICES OR
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ANY OTHER SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING. IN ADDITION,
LEXICON ACKNOWLEDGES THAT THE LIFESEQ GOLD DATABASE MAY CONTAIN INFORMATION THAT
IS COVERED BY ONE OR MORE VALID PATENTS OF THIRD PARTIES, AND INCYTE
ACKNOWLEDGES THAT THE GENERATION OR USE OF A MUTANT MOUSE MAY BE COVERED BY ONE
OR MORE VALID PATENTS OF THIRD PARTIES. EACH PARTY ACKNOWLEDGES THAT EXERCISE BY
IT OF THE RIGHTS AND LICENSES GRANTED TO IT PURSUANT TO ARTICLE 4 HEREOF MAY BE
COVERED BY ONE OR MORE VALID PATENTS OF THIRD PARTIES.
9.4 Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT
OR OTHERWISE TO THE CONTRARY, NEITHER LEXICON NOR INCYTE WILL BE LIABLE WITH
RESPECT TO ANY MATTER ARISING UNDER THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY
PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS.
ARTICLE 10. INDEMNITY
10.1 Incyte Indemnity Obligations. Incyte agrees to defend, indemnify
and hold Lexicon, its Affiliates and their respective employees and agents
harmless from all claims, losses, damages or expenses (including reasonable
attorneys' fees and costs of litigation) arising as a result of: (i) actual or
asserted violations of any applicable law or regulation by Incyte, its
sublicensees and their respective Affiliates by virtue of which any Products
manufactured, distributed or sold hereunder shall be alleged or determined to be
adulterated, misbranded, mislabeled or otherwise not in compliance with any
applicable law or regulation; (ii) claims for bodily injury, death or property
damage attributable to the manufacture, distribution, sale or use of any
Products by Incyte, its sublicensees and their respective Affiliates; (iii) a
Product recall ordered by a governmental agency or required by a confirmed
Product failure as reasonably determined by the parties hereto; or (iv) Incyte's
breach of any of its representations, warranties or covenants hereunder.
10.2 Lexicon Indemnity Obligations. Lexicon agrees to defend, indemnify
and hold Incyte, its Affiliates and their respective employees and agents
harmless from all claims, losses, damages or expenses (including reasonable
attorneys' fees and costs of litigation) arising as a result of: (i) actual or
asserted violations of any applicable law or regulation by Lexicon, its
sublicensees and their respective Affiliates by virtue of which any Products
manufactured, distributed or sold hereunder shall be alleged or determined to be
adulterated, misbranded, mislabeled or otherwise not in compliance with any
applicable law or regulation; (ii) claims for bodily injury, death or property
damage attributable to the manufacture, distribution, sale or use of any
Products by Lexicon, its sublicensees and their respective Affiliates; (iii) a
Product recall ordered by a governmental agency or required by a confirmed
Product failure as reasonably determined by the parties hereto; or (iv)
Lexicon's breach of any of its representations, warranties or covenants
hereunder.
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10.3 Limitation on Indemnity Obligations. Neither party, its Affiliates
or their respective employees and agents shall be entitled to the indemnities
set forth in Sections 10.1 or 10.2, respectively, to the comparative extent the
claim, loss, damage or expense for which indemnification is sought was caused by
a grossly negligent, reckless or intentional act or omission by such party, its
directors, officers, employees or authorized agents.
10.4 Procedure. If a party or any of its Affiliates or their respective
employees or agents (collectively, the "Indemnitee") intends to claim
indemnification under this Article 10, the Indemnitee shall promptly notify the
other party (the "Indemnitor") of any loss, claim, damage, liability or action
in respect of which the Indemnitee intends to claim such indemnification, and
the Indemnitor shall assume the defense thereof with counsel selected by the
Indemnitor and reasonably acceptable to the Indemnitee, provided, however, that
an Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitee, if representation of such Indemnitee by
the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other party
represented by such counsel in such proceedings. The Indemnitor shall have the
right to settle or compromise any claims for which it is providing
indemnification under this Article 10, provided that the consent of the
Indemnitee (which shall not be unreasonably withheld or delayed) shall be
required in the event any such settlement or compromise would adversely affect
the interests of the Indemnitee. The indemnity agreement in this Article 10
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor. The failure to deliver notice to the Indemnitor within a reasonable
time after the commencement of any such action, if prejudicial to the
Indemnitor's ability to defend such action, shall relieve such Indemnitor of any
liability to the Indemnitee under this Article 10, but the omission so to
deliver notice to the Indemnitor will not relieve it of any liability that it
may have to any Indemnitee otherwise than under this Article 10. The Indemnitee
under this Article 10, its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action,
claim or liability covered by this indemnification.
10.5 Insurance. Each party shall maintain appropriate product liability
insurance (and/or self-insurance) with respect to development, manufacture and
sale of Products by such party in such amount as such party customarily
maintains with respect to sales of its other products. Each party shall maintain
such insurance for so long as it continues to manufacture or sell Products, and
thereafter for so long as such party customarily maintains insurance with
respect to sales of its other products.
ARTICLE 11. EXPIRATION AND TERMINATION
11.1 Collaboration Term.
11.1.1 Expiration. Unless this Agreement is sooner terminated
in accordance with the provisions of this Article 11, the Collaboration
Term shall commence on the Effective Date and shall expire on the fifth
anniversary thereof; provided that either party shall have the right,
in its sole discretion, to terminate the Collaboration Term on the
third anniversary of the Effective Date by delivering [**] advance
written notice of such
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termination; and provided, further, that the Collaboration Term may be
extended upon the election of both parties by a written agreement
having terms mutually agreeable to both parties.
11.1.2 Effect of Expiration of Collaboration Term. Following
the expiration of the Collaboration Term, Lexicon shall have no further
obligation under this Agreement to perform additional research relating
to Gene Products, except for the completion of Lexicon's research
contemplated by Section 2.6 regarding Research Program Gene Products
for which the development of Mutant Mice had been completed prior to
the expiration of the Collaboration Term. The rights and obligations of
Incyte and Lexicon under Sections 2.7 through 2.10 and Section 4.1
shall continue with respect to Gene Products that remain Eligible TP
Gene Products at the end of the Collaboration Term (or that become
Eligible TP Gene Products upon completion of Lexicon's research
contemplated by Section 2.6 regarding Research Program Gene Products
for which the development of Mutant Mice had been completed prior to
the expiration of the Collaboration Term) until such Gene Products are
no longer Eligible TP Gene Products. The rights and obligations of
Incyte and Lexicon under this Agreement shall continue with respect to
Licensed Gene Products for which such party has been granted rights
under Sections 4.2 and/or 4.3 (including Gene Products that become
Licensed Gene Products upon completion of Lexicon's research
contemplated by Section 2.6 regarding Research Program Gene Products
for which the development of Mutant Mice had been completed prior to
the expiration of the Collaboration Term), subject to such party's
compliance with the surviving terms and conditions of this Agreement.
11.2 Expiration. Unless this Agreement is sooner terminated in
accordance with the provisions of this Article 11, this Agreement shall expire
and the licenses granted by each party to the other party hereunder shall become
fully paid, on a Licensed Gene Product-by-Licensed Gene Product and
country-by-country basis, on the latest to occur of (i) [**] after the Effective
Date, (ii) [**] after the First Commercial Sale of a Product relating to such
Licensed Gene Product or (iii) upon the last to expire of any Valid Claim
included in the Product Patent Rights, or the Lexicon Patent Rights or Incyte
Patent Rights claiming the Licensed Gene Product relating thereto, in such
country.
11.3 Events of Default. An Event of Default by either party shall have
occurred upon (i) the occurrence of a material breach of this Agreement if such
party fails to remedy such breach within [**] after written notice thereof by
the non-breaching party ([**] in the event of a party's failure to make a
payment required hereunder) or, if remediation of such breach in [**] is not
practicable, if such party fails to commence and diligently pursue such
remediation during such [**] period, or (ii) the commencement of any proceeding
in or for bankruptcy, insolvency, dissolution or winding up by or against such
party that is not dismissed or otherwise disposed of within [**] thereafter.
11.4 Effect of an Event of Default. In the event of an Event of
Default, the non-defaulting party shall have the right, at its option
exercisable in its sole discretion, in addition to any other rights or remedies
available to it at law or in equity and subject to the limitations set forth in
Sections 3.4.2, 9.4 and 12.6 hereof, to terminate this Agreement upon [**]
notice thereof to the other party, in which case (i) the licenses granted to the
defaulting party pursuant to Article
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4 shall terminate and (ii) the defaulting party shall return to the
non-defaulting party or, upon the non-defaulting party's written instruction,
destroy all information, materials or documentation provided by the
non-defaulting party pursuant to this Agreement, including, without limitation,
any materials relating to Gene Products and all information relating thereto and
any copies thereof (including electronic copies); provided that such termination
shall apply to the rights and licenses granted to the defaulting party under
Section 4.2 and/or 4.3 with respect to a Licensed Gene Product and related
Products only in the event, and to the extent, that such Event of Default
relates to such specific Licensed Gene Product or related Products. In the event
of a termination by Incyte of this Agreement during the Collaboration Term as a
result of an Event of Default relating to Lexicon, Lexicon will refund to Incyte
that portion of the research funding previously paid by Incyte for the periods
during the Collaboration Term following such termination, pro rated equally over
the period of the Collaboration Term for which Incyte made such payment. The
rights and licenses granted to the defaulting party under Section 4.2 and/or 4.3
with respect to any Licensed Gene Product and related Products with respect to
which no Event of Default has occurred shall, subject to such party's
obligations to pay milestones and royalties pursuant to Article 5, continue.
11.5 Effect of Expiration or Termination of Agreement. The expiration
or termination of this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination. The provisions of Articles 7,
8, 9, 10 and 11, and Sections 12.2 through 12.6 hereof shall survive the
expiration or termination of this Agreement. The provisions of Sections 5.2
through 5.8 hereof and Article 6 shall survive any termination of this Agreement
under which a party, its sublicensees or their respective Affiliates retains the
right to sell Products until such time as this Agreement would have expired with
respect to any Product, as the case may be, in any country pursuant to Section
11.2 hereof had this Agreement not been earlier terminated.
ARTICLE 12. MISCELLANEOUS
12.1 Force Majeure. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any obligation under
this Agreement when such failure or delay is caused by or results from causes
beyond the reasonable control of the affected party, including but not limited
to fire, floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority; provided, however, that the party so affected shall use
reasonable commercial efforts to avoid or remove such causes of nonperformance,
and shall continue performance hereunder with reasonable dispatch whenever such
causes are removed. Either party shall provide the other party with prompt
written notice of any delay or failure to perform that occurs by reason of force
majeure. The parties shall mutually seek a resolution of the delay or the
failure to perform as noted above.
12.2 Assignment. This Agreement may not be assigned or otherwise
transferred, in whole or in part, by either party without the consent of the
other party; provided, however, that either Lexicon or Incyte may, without such
consent, assign its rights and obligations under this Agreement (i) to any
Affiliate, or (ii) in connection with a merger, consolidation or sale of such
portion of a party's assets that includes rights under this Agreement to an
unrelated Third Party;
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provided, further, that such party's rights and obligations under this Agreement
shall be assumed by its successor in interest in any such transaction and shall
not be transferred separate from all or substantially all of its other business
assets, including those business assets that are the subject of this Agreement.
Any purported assignment in violation of the preceding sentence shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement, unless the parties otherwise agree.
12.3 Severability. Each party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions in lieu of such invalid provisions. In case
such valid provisions cannot be agreed upon, the invalidity of one or several
provisions of this Agreement shall not affect the validity of this Agreement as
a whole, unless the invalid provisions are of such essential importance to this
Agreement that it is to be reasonably assumed that the parties would not have
entered into this Agreement without the invalid provisions.
12.4 Notices. Any consent, notice or report required or permitted to be given or
made under this Agreement by one of the notification parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.
If to Lexicon: Lexicon Genetics Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Ph.D.
President and Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Lexicon Genetics Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President and General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Incyte: Incyte Genomics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ____________
With a copy to:
Incyte Genomics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Executive Vice President and General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ____________
All such communications shall be effective upon receipt.
12.5 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of
Delaware, without reference to the
conflicts of law principles thereof.
12.6 Dispute Resolution. Subject to Section 3.4.2, the parties hereby
agree that they will first attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement promptly by negotiations. If
a controversy or claim should arise hereunder, the matter shall be referred to
an individual designated by the Chief Executive Officer (or the equivalent
position) of Lexicon and by the Chief Executive Officer (or the equivalent
position) of Incyte (the "Representatives"). If the matter has not been resolved
within [**] of the first meeting of the Representatives of the parties (which
period may be extended by mutual agreement) concerning such matter, the parties
shall be free to pursue all available recourse both at law and in equity.
12.7 Entire Agreement. This Agreement, together with the exhibits and
appendices hereto and any confidentiality agreement(s) executed in contemplation
of this Agreement, contains the entire understanding of the parties with respect
to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly merged in
and made a part of this Agreement. This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both parties
hereto.
12.8 Publicity. Lexicon and Incyte each agree not to disclose any terms
or conditions of this Agreement to any Third Party without consulting the other
party prior to such disclosure. Notwithstanding the foregoing, prior to
execution of this Agreement, Lexicon and Incyte shall agree upon the substance
of information that can be used as a routine reference in the usual course of
business to describe the existence and general nature of this transaction, and
Lexicon and Incyte may disclose such information without consulting the other
party. The parties may
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thereafter from time to time mutually agree on revisions to material to be used
as a routine reference, which revisions shall be submitted by one party for the
review and approval of the other party at least ten (10) days prior to the
anticipated use or disclosure of the revised material, such approval not to be
unreasonably withheld. The terms of this Agreement shall be treated as the
Confidential Information of Lexicon and Incyte, and, except to the extent
required by applicable law, shall not be disclosed to anyone (except for the
parties' respective employees, consultants, agents and attorneys assisting in
the review and negotiation of this Agreement who have a need to know the terms
of this Agreement) without the written permission of Incyte or Lexicon. If
either party desires to release a separate announcement relating to this
Agreement, it shall first allow the other party to approve in writing such
proposed announcement; provided that such approval shall not be unreasonably
withheld or delayed.
12.9 Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
12.10 No Partnership. It is expressly agreed that the relationship
between Lexicon and Incyte shall not constitute a partnership, joint venture or
agency. Neither Lexicon nor Incyte shall have the authority to make any
statements, representations or commitments of any kind, or to take any action,
which shall be binding on the other, without the prior consent of the other
party to do so.
12.11 Exports. The parties acknowledge that the export of technical
data, materials or products is subject to the exporting party receiving any
necessary export licenses and that the parties cannot be responsible for any
delays attributable to export controls which are beyond the reasonable control
of either party. Lexicon and Incyte agree not to export or re-export, directly
or indirectly, any information, technical data, the direct product of such data,
samples or equipment received or generated under this Agreement in violation of
any applicable export control laws or governmental regulations. Lexicon and
Incyte agree to obtain similar covenants from their licensees, sublicensees, or
corporate partners, as the case may be, and contractors with respect to the
subject matter of this Section 12.11.
12.12 Waiver. The waiver by either party hereto of any right hereunder
or the failure to perform or of a breach by the other party shall not be deemed
a waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
12.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
* * *
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IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute and deliver this Agreement as of the Effective Date.
LEXICON GENETICS INCORPORATED
By: Date:
----------------------------------------- -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Ph.D.
President and Chief Executive Officer
INCYTE GENOMICS, INC.
By: Date:
----------------------------------------- -------------------------
Name:
--------------------------------------
Title:
-----------------------------------
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EXHIBIT 1.32
ALLOCATION OF NET SALES IN BUNDLED TRANSACTION
With respect to Products sold in a Bundled Transaction in which Incyte,
Lexicon or any of their respective Affiliates or sublicensees discounts the
sales price of the Products to a greater degree than Incyte, Lexion, their
Affiliates or sublicensees, respectively, generally discounts the price of its
other products to such customer, the amount to be included in Net Sales of such
Products shall be calculated in accordance with the following formula:
ASP-P x N-P
NS-P = ---------------------------------------- x BTF
(SIGMA)=1 ASP-pi x N-pi
Where:
NS-P = Amount allocated to Net Sales of the Product
ASP-P = Average Selling Price (as defined below) per
unit, during the applicable period, of the Product
when sold alone
ASP-pi = Average Selling Price per unit, during the
applicable period, of each Product or each product
other than a Product in the Bundled Transaction
when sold alone
N-P = Total number of units of Product included in the
Bundled Transaction during the applicable period
N-pi = Total number of units (i.e., corresponding to
the same ASP-pi) of each Product or product other
than a Product included in the Bundled Transaction
during the applicable period
(SIGMA)=1 = The sum of the products of the formula ASP-pi ?
N-pi for each and every Product or product other
than a Product included in the Bundled Transaction
during the applicable period
BTF = The aggregate amounts paid to the seller for the
Bundled Transaction during the applicable period
The Average Selling Price shall be based on the actual average selling
price of the applicable Product or product other than a Product, as the case may
be, determined for the applicable period.
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If a Product or other product is not sold separately and no bona fide
list price exists for such Product or other product, the Parties shall agree
upon an imputed bona fide list price for such Product or other product, and Net
Sales with respect thereto shall be based on such imputed list price.
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EXHIBIT 1.33
DESCRIPTION OF THE OMNIBANK(R) LIBRARY
The OmniBank Library is a library of mouse embryonic stem ("ES") cell
clones each containing a gene trap in a single gene. The trapped gene is
identified by a sequence tag referred to as an OST, as defined herein, which
have an average length of approximately 250 base pairs (and no fewer than 100
base pairs). The OSTs identify exons of the trapped genes and are stored in a
searchable database. Once a gene of interest has been identified, the
corresponding ES cell clone, with a specified gene trap mutation, can be
microinjected into host blastocysts to produce knockout mice to study the gene's
function.
The OmniBank mutations are created using insertional mutagenesis based
on ▇▇▇▇▇▇▇ murine leukemia virus ("MoMuLV") and other vectors. The vectors
deliver a gene trap construct to the ES cells that allows the expression of a
selectable marker gene when the vector has inserted into and trapped exons from
a gene. The gene trap vectors also provide for the semi-automated acquisition of
OSTs.
As of the Effective Date, the OmniBank Library contains over 130,000 ES
cell clones.
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EXHIBIT 2.6
RESEARCH PLAN
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ will conduct "Level 1" analysis of Mutant Mice for all Research
Program Gene Products. Level 1 analysis is designed to identify primary
pathophysiological perturbations resulting from engineered mutations.
Level 1 analysis is intended as a first pass screen that may include:
o [*
*]
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ will conduct "Level 2" analysis of Mutant Mice for all Research
Program Gene Products for which it considers such analysis merited or
appropriate, based on findings from Level 1.
Level 2 analysis is designed as a continuation of the Level 1
preliminary analysis of the pathophysiological perturbations resulting from
engineered mutations. Level 2 analysis is focused on organ and physiologic
system function and represents an exhaustive analysis of organism physiology.
Phenotypic screen analysis under Level 2 may include any or all of the
following scientific experiments.
[**]
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EXHIBIT 2.7
MATERIAL TRANSFER AGREEMENT
THIS MATERIAL TRANSFER AGREEMENT (this "Agreement") is entered into
effective as of the date set forth on the signature page hereof (the "Effective
Date") by and between Lexicon Genetics Incorporated, a
Delaware corporation
("Lexicon"), and Incyte Genomics, Inc., a
Delaware corporation ("Incyte").
R E C I T A L S
WHEREAS, Lexicon and Incyte are parties to that certain
Therapeutic
Protein Alliance Agreement dated _____, 2001 (the "Alliance Agreement");
WHEREAS, Incyte has the right under Section 2.7 of the Alliance
Agreement to obtain Mutant Mice related to a Research Program Gene Product (in
each case as defined therein);
WHEREAS, Incyte desires to exercise such option with respect to the
line of Mutant Mice specified in Appendix A;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, Incyte agrees with Lexicon as follows:
1. DEFINITIONS
1.1 "Cre-Lox Patents" means United States patent number 4,959,317, any
foreign counterpart patents and patent applications of United States patent
number 4,959,317, any continuation-in-part, continuation or divisional
applications thereof, any patent granted on any aforesaid patent application and
any extension, revival, re-examination or reissue of any of such patent, and any
continuations, continuations-in-part, divisionals, reissues, extensions or
foreign counterparts of any of the foregoing, which Lexicon has the right to
sublicense hereunder. The terms "Cre" and "lox" (also referred to as "loxP")
have the meanings as described and embodied by the Cre-Lox Patents.
1.2 "Cre-Lox Technology" means all the inventions described, embodied
by and claimed in the Cre-Lox Patents.
1.3 "Lexicon Patent Rights" means (i) the United States and foreign
patent applications, excluding the Cre-Lox Patents, heretofore or hereafter
owned in whole or in part by or licensed to Lexicon, which claim a composition,
method or process relating to the Lexicon Technology, (ii) any United States
patents and foreign patents issuing from such patent applications and (iii) any
continuations, continuations-in-part, divisionals, reexamination certificates,
reissues or extensions of any of the foregoing.
1.4 "Lexicon Technology" means all inventions, discoveries,
improvements, know-how, technical information, data, or other technology,
relating to the generation or use of the Materials heretofore or hereafter
discovered, conceived, made, developed and/or reduced to practice solely or
jointly by employees or others acting on behalf of Lexicon or its Affiliates, or
owned in whole or in part by or licensed to Lexicon and which Lexicon has the
right to license hereunder, but excluding the Cre-Lox Technology.
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1.5 "Materials" means the Mutant Mice provided to Incyte under this
Agreement, any Progeny of such Mutant Mice and any derivative or expression
product thereof.
1.6 "Progeny" means mice, including successive generations thereof,
that are produced or developed by Incyte or Incyte using by breeding Mutant Mice
with other Mutant Mice or any other mice; provided that Progeny shall not
include any mouse that does not contain the same mutation as the Mutant Mice
delivered to Incyte.
1.7 "Research Field" means use by Incyte, at the internal research
facilities of Incyte, solely for the purposes of conducting research, including
research directed toward the development of human therapeutic and diagnostic
products. The Research Field specifically excludes (i) any activity associated
with higher plants or agricultural applications; (ii) the development of a
library of mouse embryonic stem cells; and (iii) the development, manufacture,
use, lease, sale (or other transfer for consideration) or importation of any
product for sale (or lease or other transfer of a product for consideration)
wherein the manufacture, use, sale or importation of such product would infringe
a Valid Claim of the Cre-Lox Patents, including, but not limited to, wherein the
product is manufactured using a composition or method that would infringe a
Valid Claim of the Cre-Lox Patents.
Capitalized terms used without definition in this Agreement shall have
the meanings given to such terms in the Alliance Agreement. Capitalized terms
defined in both this Agreement and the Alliance Agreement shall have the
meanings given to such terms in this Agreement.
2. REQUEST FOR AND DELIVERY OF MUTANT MICE
2.1 Request for Mutant Mice. Incyte hereby requests, pursuant to the
provisions of Section 2.7 of the Alliance Agreement and subject to the terms
thereof, that Lexicon deliver the Mutant Mice specified in Appendix A on the
terms specified in this Agreement.
2.2 Payment. In consideration of the rights and licenses granted under
this Agreement, Incyte shall pay Lexicon a fee of [**] within [**] of the
Effective Date.
2.3 Processing and Delivery of Mutant Mice. Upon Lexicon's receipt and
acceptance of an executed copy of this Agreement, and subject to the terms of
this Agreement, Lexicon will deliver [**] mice heterozygous for the mutant
allele, which will typically include at least one pair of animals of the
opposite sex.
2.4 Delivery Conditions for Mutant Mice. Incyte shall be responsible
for making shipping arrangements for all Mutant Mice shipped to Incyte from
Lexicon. Incyte shall also be responsible for complying with all customs,
regulations, veterinary handling procedures and protocols, and obtaining any and
all permits, forms or permissions that may be required for Incyte to accept
shipment of Mutant Mice from Lexicon. To facilitate timely compliance with such
requirements, a copy of a standard Lexicon Mutant Mouse shipping and transfer
report is available upon request. When the requested Mutant Mice are available
for shipment, Lexicon shall provide written notice to such effect to Incyte,
which notice shall further specify a shipping company located in the same
metropolitan area as Lexicon with which Incyte may make arrangements for
shipping and delivery of such Mutant Mice. Lexicon shall ship the requested
Mutant Mice to Incyte promptly following its receipt of written notice that
Incyte has completed the necessary shipping arrangements. If Incyte fails to
complete the necessary shipping arrangements and provide such notice within [**]
after Lexicon's delivery of notice that the requested Mutant Mice are available
for shipment, Incyte shall pay Lexicon a storage and maintenance charge of
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[**] per line of Mutant Mice for each day thereafter until Lexicon receives
notice of the completion of such shipping arrangements.
3. USE OF THE MATERIALS
3.1 Non-Exclusive License Grant to Materials. Subject to the terms and
conditions of this Agreement, Lexicon hereby grants to Incyte and its Affiliates
a non-transferable, non-exclusive right and license under the Lexicon Technology
to use the Materials solely for the purpose of conducting research in the
Research Field. Incyte agrees to use the Materials solely for internal research
purposes of Incyte in accordance with the terms and conditions of this
Agreement, and not to use the Materials for any purposes for any Third Party or
to transfer to or license the use of or make the Materials available to any
Third Party.
3.2 Non-Exclusive Rights Under the Cre-Lox Technology. The following
provisions shall apply to the extent that any Mutant Mice containing one or more
lox sites in their genomes (including any Progeny thereof containing one or more
lox sites in its genome, "Lox Mice") are provided to Incyte under this
Agreement:
(a) Subject to the terms of this Agreement, Lexicon hereby
grants to Incyte and its Affiliates the non-transferable, non-exclusive
right under the Cre-Lox Technology to use, breed and cross-breed any
Lox Mice solely in the Research Field; provided however, that Incyte
shall not manipulate the genetic information at any lox site of a Lox
Mouse by using the Cre-Lox Technology (including without limitation
cross-breeding a Lox Mouse with a mouse containing DNA capable of
expressing a Cre recombinase protein) or otherwise further practice
under the Cre-Lox Patents without first obtaining a license from DuPont
Pharmaceuticals Company.
(b) Incyte shall not transfer any Lox Mice or any progeny or
material in any way derived from such Lox Mice to any Third Party.
(c) No right is granted to Incyte to sell (or lease or
otherwise transfer for consideration) or develop or manufacture for
sale (or lease or other transfer for consideration) any product, the
manufacture, use, sale or importation of which would infringe a Valid
Claim of the Cre-Lox Patents, including but not limited to any product
which is manufactured using a composition or method which would
infringe a Valid Claim of the Cre-Lox Patents.
(d) Subject to the restricted non-exclusive license granted to
Incyte, Lexicon (and its licensors as applicable) shall retain all
rights to the Lox Mice.
3.3 No Further Rights. Except as expressly provided herein, no right,
title or interest is granted hereunder by Lexicon in, to or under any Lexicon
Patent Rights or Lexicon Technology. Without limiting the foregoing, (i) nothing
in this Agreement shall be deemed to restrict Lexicon's rights to use any
Materials or, subject to the nonexclusive rights and licenses granted to Incyte
hereunder, to sell, license or otherwise transfer any Materials to Third
Parties, and (ii) nothing in this Agreement shall be deemed to modify any of the
rights and obligations of Incyte under the Alliance Agreement.
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4. INTELLECTUAL PROPERTY RIGHTS AND OWNERSHIP
4.1 Ownership of the Materials. Subject to the non-exclusive rights and
licenses granted to Incyte hereunder, Lexicon shall own and retain all rights to
the Materials, including, without limitation, rights to use, produce, breed,
sell and license Mutant Mice.
4.2 Ownership of the Results of Research Using Materials. Subject to
the non-exclusive rights and licenses granted hereunder and the terms of the
Alliance Agreement, (i) Incyte shall own and have rights to all inventions,
discoveries, improvements, know-how, technical information, data or other
technology discovered, conceived, made, developed and/or reduced to practice
through the use of Materials solely or jointly by employees or others acting on
behalf of Incyte or its Affiliates, and (ii) Lexicon shall own and have rights
to all inventions, discoveries, improvements, know-how, technical information,
data or other technology discovered, conceived, made, developed and/or reduced
to practice through the use of Materials solely or jointly by employees or
others acting on behalf of Lexicon or its Affiliates.
4.3 Non-Exclusive License to Preserve OmniBank Freedom of Operation. In
consideration of the rights granted by Lexicon hereunder, to the extent that one
or more claims of an issued patent arising from the use by Incyte of Materials
would, absent a license from Incyte, prevent Lexicon from (i) using or
permitting others to use the OmniBank Database or any information therein, (ii)
using or breeding or permitting others to use or breed any Mutant Mouse or other
mutant mice or (iii) using or permitting others to use any embryonic stem cell
clones or other biological materials contained in the OmniBank Library
(collectively a "Incyte Blocking Patent"), then Incyte shall grant to Lexicon a
non-exclusive, royalty-free license, including the right to grant sublicenses,
under any such Incyte Blocking Patent (x) to use and permit others to use the
OmniBank Database and any information therein, (y) to use or breed or permit
others to use or breed Mutant Mice and other mutant mice and (z) to use or
permit others to use any embryonic stem cell clones or other biological
materials contained in the OmniBank Library.
5. TERM AND TERMINATION
5.1 Term. The term of this Agreement shall commence on the Effective
Date and shall remain in effect until the earlier of either (i) termination of
this Agreement pursuant to the terms hereof or (ii) the expiration of the
last-to-expire claim of any patent or patent application included in the Lexicon
Patent Rights licensed to Incyte under this Agreement.
5.2 Termination. Each party shall have the right to terminate this
Agreement at any time prior to Lexicon's delivery of Mutant Mice to Incyte
hereunder, upon thirty (30) days written notice to the other party, if such
party reasonably determines that the production, use or breeding of such Mutant
Mice infringes intellectual property rights of any Third Party, and Incyte
elects not to obtain a license under the necessary Third Party intellectual
property rights at its sole expense.
5.3 Events of Default. An event of default (an "Event of Default")
shall have occurred upon the occurrence of a material breach of this Agreement
if the breaching party fails to remedy such breach within [**] ([**] in the
event of the failure of a party to make any payments due hereunder) after
written notice thereof by the non-breaching party.
5.4 Effect of an Event of Default.
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(a) Remedies Available to Lexicon. If an Event of Default
occurs relating to Incyte, and Incyte fails to cure such default during
any applicable cure period, then Lexicon shall have the right, at its
option exercisable in its sole discretion, in addition to any other
rights or remedies available to it at law or in equity, to terminate
this Agreement upon notice thereof to Incyte, in which case (i) the
licenses granted to Incyte pursuant to Section 3 shall terminate, (ii)
Incyte shall return to Lexicon, or, upon Lexicon's written instruction,
destroy all information, materials or documentation provided or made
available by Lexicon pursuant to this Agreement, and any copies thereof
(including electronic copies), and (iii) Incyte shall return to
Lexicon, or, upon Lexicon's written instruction, destroy any Materials.
(b) Remedies Available to Incyte. If an Event of Default
occurs relating to Lexicon, and Lexicon fails to cure such default
during any applicable cure period, then Incyte shall have the right, at
its option exercisable in its sole discretion, in addition to any other
rights or remedies available to it at law or in equity and subject to
the limitations set forth in Section 6, to terminate this Agreement
upon notice thereof to Lexicon.
5.5 Effect of Expiration or Termination of Agreement. The expiration or
termination of this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination. The provisions of Sections 1,
3.3, 4, 6 and 7 hereof shall survive the expiration or termination of this
Agreement. The provisions of Sections 3.1 and 3.2 shall survive the expiration
or termination of this Agreement unless Lexicon terminates this Agreement
pursuant to Section 5.4(a).
6. DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY
6.1 Disclaimer of Warranties. THE MUTANT MICE AND OTHER MATERIALS ARE
BEING SUPPLIED TO INCYTE WITH NO WARRANTIES, EXPRESS OR IMPLIED. LEXICON HEREBY
DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
WITHOUT LIMITING THE FOREGOING, LEXICON MAKES NO WARRANTY OF MUTAGENICITY OR
GERMLINE TRANSMISSION OF ANY MUTANT ALLELE, OR THAT A MUTANT PHENOTYPE WILL BE
OBSERVED IN ANY MUTANT MICE OR PROGENY. LEXICON MAKES NO REPRESENTATION OR
WARRANTY THAT THE USE OF THE MATERIALS OR THE CONDUCT OF RESEARCH WITHIN THE
RESEARCH FIELD HEREUNDER WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY
RIGHTS OF THIRD PARTIES.
6.2 Experimental Nature of Materials. THE MATERIALS ARE EXPERIMENTAL IN
NATURE AND SHOULD BE USED WITH CAUTION SINCE ALL OF THEIR CHARACTERISTICS ARE
NOT KNOWN. INCYTE AND LEXICON AGREE TO COMPLY WITH ALL FEDERAL, STATE AND LOCAL
STATUTES, RULES AND REGULATIONS RELATING TO THE USE, HANDLING AND STORAGE OF THE
MATERIALS.
6.3 Limitation of Liability. Lexicon shall in no event be liable for
any use by Incyte of the Materials or any loss, claim, damage or liability, of
whatever kind or nature, which may arise from or in connection the use, handling
or storage of the Materials by Incyte. NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE TO THE CONTRARY, NEITHER LEXICON NOR INCYTE WILL BE
LIABLE WITH RESPECT TO ANY MATTER ARISING UNDER THIS AGREEMENT UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR
(I) ANY PUNITIVE, EXEMPLARY, INCIDENTAL OR
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CONSEQUENTIAL DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT OF SUBSTITUTE
GOODS, TECHNOLOGY OR SERVICES. WITHOUT IN ANY WAY LIMITING THE FOREGOING,
NEITHER LEXICON SHALL NOT, IN ANY EVENT, HAVE ANY LIABILITY WHATSOEVER IN
CONNECTION WITH THIS AGREEMENT IN EXCESS OF AN AMOUNT EQUAL TO THE FEES PAID TO
LEXICON BY INCYTE HEREUNDER.
7. INDEMNIFICATION
Except to the extent prohibited by law, Incyte shall assume all
liability for, and shall defend, indemnify and hold Lexicon, its Affiliates and
their respective employees and agents harmless from, all claims, losses, damages
or expenses (including reasonable attorneys' fees) arising as a result of the
use by Incyte or its Affiliates of the Materials, except for and to the extent
that any such liability results from the gross negligence or willful misconduct
of Lexicon.
8. MISCELLANEOUS
8.1 Entire Agreement. This Agreement, together with the Alliance
Agreement, constitutes the entire and exclusive agreement between the parties
with respect to the subject matter hereof and, with respect to any conflicting
terms from prior agreements between the parties, supersedes and cancels such
conflicting sections from all previous registrations, agreements, commitments
and writings in respect thereof. This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both parties
hereto.
8.2 Assignment and Waiver. This Agreement may not be assigned or
otherwise transferred by either party without the consent of the other party;
provided, however, that Lexicon or Incyte may, without such consent, assign its
rights and obligations under this Agreement (i) to any Affiliate or (ii) in
connection with a merger, consolidation or sale of such portion of its assets
that includes rights under this Agreement to an unrelated Third Party; provided,
however, that such assigning party's rights and obligations under this Agreement
shall be assumed by its successor in interest in any such transaction and shall
not be transferred separate from all or substantially all of its other business
assets, including those business assets that are the subject of this Agreement.
In the event of such a transaction with an unrelated Third Party,
notwithstanding the other provisions of this Agreement, the intellectual
property rights of such Third Party shall not be subject to the licenses granted
by Lexicon or Incyte under this Agreement. Any purported assignment in violation
of the provisions of this Section 8.2 shall be void. Any permitted assignee
shall assume all obligations of its assignor under this Agreement. The waiver by
either party hereto of any right hereunder or the failure to perform or of a
breach by the other party shall not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other party whether of a
similar nature or otherwise.
8.3 Force Majeure. Neither party shall be held liable or responsible to
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any obligation under this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party, including but not limited to fire,
floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party; provided, however, that the party so
affected shall use reasonable commercial efforts to avoid or remove such causes
of nonperformance, and shall continue performance hereunder with reasonable
dispatch whenever such causes are removed. Either party shall provide the other
party with prompt written notice of any delay or failure to perform that occurs
by reason of force majeure. The parties shall mutually seek a resolution of the
delay or the failure to perform as noted above.
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8.4 No Partnership. It is expressly agreed that the relationship
between Lexicon and Incyte shall not constitute a partnership, joint venture or
agency. Neither Lexicon nor Incyte shall have the authority to make any
statements, representations or commitments of any kind, or to take any action,
which shall be binding on the other, without the prior consent of the other
party to do so.
8.5 Applicable Law. This Agreement shall be governed by, construed, and
interpreted in accordance with, the laws of the State of Texas, United States of
America, without reference to conflict of laws principles.
8.6 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
8.7 Severability. Each party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the parties would not have entered into this Agreement
without the invalid provisions.
IN WITNESS WHEREOF, Incyte has caused its duly authorized
representative to execute and deliver this Agreement as of the Effective Date.
Incyte Genomics, Inc.
By:
--------------------------------------------------
(Signature of Authorized Representative)
Printed Name:
----------------------------------------
Title:
-----------------------------------------------
Date:
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EXHIBIT 3.1
STEERING COMMITTEE AND PROJECT COORDINATORS
Incyte Steering Committee Representatives:
1. ________, Initial Chairperson
2. ___________
3. ___________
Incyte Project Coordinator: ____________
Lexicon Steering Committee Representatives:
1. ▇▇▇ ▇▇▇▇▇▇▇, Initial Secretary
2. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
3. ▇▇▇▇▇ ▇▇▇▇▇▇
Lexicon Project Coordinator: _____________________