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Exhibit 10.4
[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS
AGREEMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
COMMISSION.]
THIS AGREEMENT is effective as of the 23rd day of December 1998, by and
between UNIVERSITY OF EDINBURGH operating through its CENTRE FOR GENOME
RESEARCH, of King's Buildings, West Mains Road, Edinburgh EH9 3JQ, United
Kingdom (the "Licensor"), and DELTAGEN, INC., a corporation organized under the
laws of the State of Delaware and having its principal offices at 1031 Bing
Street, San Carlos, California 94070 U.S.A. (the "Licensee").
A. WHEREAS, Licensor owns or has rights in certain technology
regarding vectors and the capturing of genes.
B. WHEREAS, Licensor wishes to grant, and the Licensee wishes to
receive, an exclusive worldwide license under Licensor's rights in such
technology to research, develop and commercialize technology and products.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties agree as follows:
1. DEFINITIONS AND INTERPRETATION.
In this Agreement and in the Recitals, unless the context otherwise
requires, the following words and expressions have the following meanings:
1.1 "Affiliate" means, with respect to any Person, any other
Person which directly or indirectly controls or is controlled by or is under
common control with a Party to this Agreement.
1.2 "***Product" means a product which incorporates *** that ***
to either (a) *** to prevent the ***, or ***, or (b) ***to prevent the *** into
the *** copy of the ***; in each case, solely to the extent that such *** (x)
were directly developed from the practice of any process or method claimed in
the Patents or (y) contains a composition of matter claimed in the Patents, and
(z) are covered by one or more Valid Claims.
1.3 "Cell Line Product" means any cell line that (a) is directly
developed from the practice of any process or method claimed in the Patents or
(b) contains a composition of matter claimed in the Patents, and (c) is covered
by one or more Valid Claims.
1.4 "Centre" means the Centre for Genome Research of the
University of Edinburgh and includes any Person who becomes, in whole or in
part, its successor, substitute or assignee (which includes a Person taking by
way of novation).
*** Confidential material redacted and separately filed with the Commission.
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1.5 "Confidential Information" means, with respect to a party, all
information of any kind whatsoever (including without limitation, compilations,
data, formulae, models, patent disclosures, procedures, processes, projections,
protocols, results of experimentation and testing, specifications, strategies
and techniques), and all tangible and intangible embodiments thereof of any kind
whatsoever (including without limitation, apparatus, biological or chemical
materials, animals, cells, compositions, compounds, documents, drawings,
machinery, patent applications records, reports), which is owned or controlled
by such party, is disclosed by such party to the other party pursuant to this
Agreement, and (if disclosed in writing or other tangible medium) is marked or
identified as confidential at the time of disclosure to the receiving party or
(if otherwise disclosed) is identified as confidential at the time of disclosure
to the receiving party and described as such in writing within thirty (30) days
after such disclosure.
1.6 "Control" means ownership, directly or though one or more
Affiliates, of more than fifty percent (50%) of the shares of stock entitled to
vote for the election of directors, in the case of a corporation, or more than
fifty percent (50%) of the equity interests in the case of any other type of
legal entity, or any other arrangement whereby a party controls or has the right
to control the Board of Directors or equivalent governing body of a corporation
of other entity.
1.7 "Diagnostic Product" means any product which is used in the
diagnosis and monitoring of any disease, state, trait or condition in humans,
and which contains a product that (x) was directly developed from the practice
of any process or method within the Licensed Technology or (y) incorporates a
composition of matter claimed within the Licensed Technology, and (z) is covered
by one or more Valid Claims.
1.8 "Discovered Gene" means any gene directly discovered through
the practice of a process or method within the Licensed Technology and which is
covered by one or more Valid Claims.
1.9 "Discovered Gene Information" means the *** information with
respect to a Discovered Gene.
1.10 "Drug Product" means a product used in the prevention or
treatment of any disease, condition or state (but excluding traits) in humans
that (a) is a *** and (b) contains a product that (i) was directly developed
from the practice of any process or method within the Licensed Technology or
(ii) incorporates a composition of matter claimed within the Licensed
Technology, and (iii) is covered by one or more Valid Claims; provided however,
that a Drug Product shall not include an *** Product, a *** Product, a ***
Product or a *** Product.
*** Confidential material redacted and separately filed with the Commission.
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1.11 "Field" means the use of *** in *** biology *** relating to
genes.
1.12 "First Commercial Sale" means with respect to any Product, the
first sale for use or consumption by the general public of such Product.
1.13 "Gene Therapy Product" means any product that (a) *** (which
*** is then introduced into a human host) in order to *** to treat, correct or
modify (as the case may be) a genetic disease, trait or condition and (b)
contains a product that (i) was directly developed from the practice of any
process or method within the Licensed Technology or (ii) incorporates a
composition of matter claimed within the Licensed Technology, and (iii) is
covered by one or more Valid Claims.
1.14 "Gene Knockout Database Information Product" means a database
product which primarily contains genotypic or phenotypic information with
respect to gene knockouts and which incorporates Discovered Gene Information.
1.15 "Gene Knockout Database Information Product Representation
Fraction" means the relative percentage representation of the *** in a Gene
Knockout Database Information Product in relation to all other gene
information contained in such Gene Knockout Database Information Product ***,
where *** in the Discovered Gene Information and *** in such Gene Knockout
Database Information Product; provided however, that the Gene Knockout
Database Information Product Representation Fraction shall not be equal to a
value less than ***.
1.16 "Information and Know-How" means all information, data and
know-how relating to the Field, owned by or licensed to the Licensor prior to or
during the term of this Agreement, which is not generally known including, but
not limited to, formulae, sequences, procedures, protocols, methods, techniques,
compositions, expertise, practice, experience, skill, technical knowledge and
results of experimentation and testing, which are necessary or useful for
Licensee to perform research, development or commercialization on a Product, or
to make, use, sell, offer for sale, or import a Product, or to practice the
methods and processes or make or use any compositions under the Patents.
1.17 "Inventions" means and includes all patentable and
unpatentable inventions, discoveries, data, information, compositions, methods,
techniques, technology and other results, relating to the Field,
(a) possessed, created, invented, developed or acquired
by the Licensor or jointly by the Licensor and the Licensee prior to
the date of this Agreement; or
(b) possessed, created, invented, developed or acquired
by the Licensor (or licensed to the Licensor) or jointly by the
Licensor and the Licensee during the term of this Agreement.
*** Confidential material redacted and separately filed with the Commission.
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1.18 "Improvement" means any improvement, addition, enhancement,
information, know-how, modification, development, invention, alteration or
technical advance in or relating to any Patent, Invention or Information and
Know-How (whether patentable or not) created, invented, developed or acquired by
the Licensor (or licensed to the Licensor) or jointly by the Licensor and the
Licensee during the term of this Agreement, in which the Licensor has an
ownership or licensable interest prior to the date of this Agreement or during
the term of this Agreement.
1.19 "Licensed Technology" means Improvements, Inventions,
Information and Know-How and Patents.
1.20 "Net Sales Price" means, with respect to any Product, the
actual net selling price determined from gross invoiced sales of the Products to
customers, less (a) all discounts, credits, allowances, returns and rebates to
and chargebacks from the account of such customers, (b) transportation charges,
freight, packaging costs and insurance costs incurred with respect to such
Product, (c) cash, quantity and trade discounts and other price reductions, (d)
sales, use, value-added and other taxes directly based on sale and/or time of
payment, (e) customs duties, surcharges and other governmental charges incurred
in connection with exportation or importation of such Product, (f) the cost to
Licensee of the *** which accompany such Product as it is sold, (g) the *** with
respect to such Product, and (h) the *** costs with respect to such Product.
1.21 "Organism Product" means any *** that (a) is directly
developed through the use of the Licensed Technology and (b) is covered by one
or more Valid Claims.
1.22 "Parties" means the Licensor and the Licensee, and "Party"
means either of the Licensor or the Licensee.
1.23 "Patents" means :
(a) (i) Patent number 5,767,336 granted in the
United States of America entitled "Gene Trap Vectors
Comprising a Type II Transmembrane Domain", issued August 4,
1998;
(ii) Patent number 5,789,653 granted in the
United States of America entitled "Secretary Gene Trap",
issued June 16, 1998;
(iii) Patent number 673,650 granted in Australia
entitled "Novel Vectors and Use Thereof for Capturing Target
Genes", issued March 4, 1997;
*** Confidential material redacted and separately filed with the Commission.
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(iv) *** in Canada entitled "Novel Vectors and
Use Thereof for Capturing Target Genes"; and
(v) *** in Japan entitled "Novel Vectors and Use
Thereof for Capturing Target Genes" (all of the foregoing,
collectively, the "Original Patents");
(b) all patents that have issued or in the future issue
from such Original Patents and all present and future patents granted
on patent applications filed in any part of the Territory which
correspond or relate to any of the Original patents (including without
limitation, utility and design patents, certificates of invention,
invention disclosures and statutory invention registrations);
(c) all present and future patents or patent applications
which claim any Improvements, Inventions, or Information and Know-How,
filed in any part of the Territory; and
(d) all divisionals, continuations, continuations in
part, supplemental disclosures, renewals, reissues and extensions to
any of the foregoing in subparagraphs (a) through (c) above, together
with any and all patent applications relating to any of them.
1.24 "Product" means collectively, the *** Products, Cell Line
Products, Diagnostic Products, Drug Products, Gene Knockout Database Information
Products, Organism Products and Therapeutic Protein Products.
1.25 "Recovery Date of Research, Development and Commercialization
Expenses" means with respect to each Product, the date, *** with respect to such
Product, upon which the Licensee has recovered all costs and expenses relating
to research, development and commercialization of such Product, including
without limitation, labor, materials, Third Party royalty fees, overhead, patent
and attorneys' fees and costs, marketing, advertising and other
commercialization fees and costs with respect to such Product.
1.26 "Royalty" means the royalty to be paid by the Licensee to the
Licensor pursuant to Section 3.1 below.
*** Confidential material redacted and separately filed with the Commission.
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1.27 "Royalty Term" means, with respect to each Product in each
country, (a) if the manufacture, use or sale of such Product in such country was
at the time of the First Commercial Sale in such country covered by a Valid
Claim, the term for which such Valid Claim remains in effect and would, if in an
issued patent, be infringed but for the license granted by this Agreement, or
(b) otherwise, ten (10) years from the date of the First Commercial Sale of such
Product in such country.
1.28 "Sublicense" means any sublicense to Licensee's rights under
the Licensed Technology granted by the Licensee pursuant to Section 2.1(b).
1.29 "Territory" means the entire world.
1.30 "Therapeutic Protein Product" means a product which (a) is
used in the *** of any disease, state or condition in humans, (b) is a *** and
(c) contains a *** that (i) was directly developed from the practice of any
process or method within the Licensed Technology and (ii) is covered by one or
more Valid Claims; provided however, that in the event that such cDNA is not
covered by one or more Valid Claims, such product shall be a "Non-Valid Claim
Therapeutic Protein Product; and provided further, that a Therapeutic Protein
Product shall exclude Gene Therapy Products and *** Products. For purposes of
the definition of Therapeutic Protein Product, a *** shall include *** derived
from a *** that (x) was directly developed from the practice of any process or
method within the Licensed Technology and (y) is covered by one or more Valid
Claims.
1.31 "Third Party' means any Person other than Licensor, Licensee
and their respective Affiliates.
1.32 "Valid Claim" shall mean either a claim of an issued and
unexpired patent included within the Patents, 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 which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise.
*** Confidential material redacted and separately filed with the Commission.
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INTERPRETATION
(a) A reference to a "Person" shall mean a natural person
or individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization,
governmental authority, incorporated association, statutory
corporation, the Crown and any other type of entity not specifically
listed herein; words including singular number will include a plural
number and vice versa; words including a gender will include all other
genders;
(b) A reference in this Agreement to statute or a section
of a statute includes all amendments to that statute or section passed
in substitution for the statute or section referred to or incorporating
any of its provisions;
(c) Section headings have been inserted for the purpose
of guidance only, and will not be part of this Agreement;
(d) A reference to a Recital, Article or Section is a
reference to a recital, article or section of this Agreement;
(e) A reference to a Person includes that Person's
personal representatives, successors and permitted assigns;
(f) "Agreement" means this license agreement.
2. GRANT OF LICENSE.
2.1 EXCLUSIVE LICENSE TO LICENSEE
In consideration of the payment of the Royalty set forth in Section 3.1
below, the Licensor hereby grants to the Licensee:
(a) an exclusive license in the Territory under the
Licensed Technology to conduct research on, develop and commercialize
the Licensed Technology, to manufacture, have manufactured, use and
have used, market, sell, have sold, offer for sale, have offered for
sale, import and export and have imported and exported the
compositions, technology or inventions, and to practice (or practise)
the processes or methods that are within or that constitute the
Licensed Technology for use in the Field.
(b) the right to grant Sublicenses (with the right of
such sublicensees to grant further sublicenses) to any of the rights
referred to in paragraph (a) of this Section 2.1 to Affiliates and
Third Parties, PROVIDED THAT, (a) any such Sublicense is on terms not
inconsistent with the Licensor's rights under this Agreement and (b)
Licensee shall be obligated to make the payments required by Section
3.1(b).
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2.2 NOTIFICATION AND COPIES OF SUBLICENSES.
The Licensee will notify the Licensor of the name and address of each
sublicensee promptly upon the Licensee entering into a Sublicense with such
sublicensee and provide to the Licensor a copy of each such Sublicense within
thirty (30) days of the execution and delivery by Licensee and the relevant
sublicensee of such Sublicense.
2.3 CONTENTS OF SUBLICENSES.
The Licensee will ensure that provisions materially similar to Sections
3.4, 3.10, 3.11, 3.12, 3.13, 14.1 and Article 9 are incorporated in each
Sublicense.
2.4 EXPLOITATION OF LICENSE.
The Licensee, at its expense, will use its commercially reasonable
endeavors, subject to the exercise of its commercially reasonable business
judgment, to commercialize and exploit the Original Patents and to
commercialize, exploit and sell Products, or to appoint sublicensees for the
purpose of such commercialization, exploitation and sale. Notwithstanding this
Section 2.4, the Licensor acknowledges that the Licensed Technology, as of the
date of this Agreement, may not be at a stage which is capable of
commercialization or exploitation. The Licensor further acknowledges that it may
be necessary for the Licensee to conduct and engage in extensive research,
development and commercialization efforts in relation to the Licensed Technology
before the Licensee can fulfill its obligations under this Section 2.4, and that
it cannot be determined at this time whether and to what extent the Licensed
Technology can be commercialized or exploited or Products can be commercialized,
exploited and sold.
2.5 AVAILABILITY OF THE LICENSED TECHNOLOGY.
Licensor shall provide Licensee with all information available to
Licensor regarding the Licensed Technology. Licensor shall provide such
technical assistance to Licensee as Licensee reasonably requests regarding the
Licensed Technology.
2.6 OPTION FOR FUTURE TECHNOLOGY LICENSES TO LICENSEE.
If during the term of this Agreement:
(a) the Licensor becomes aware that a laboratory, of a
department or unit of the Licensor, other than the Centre (the "Other
Department") has developed or is developing technology (the "***
Technology") which is useful or applicable in ***; or
(b) the Licensor chooses to make available to a Third
Party the Licensor's technology in an area which is *** (the "Other
Technology"),
the Licensor will in each circumstance referred to in subparagraphs (a)
or (b), promptly notify the Licensee of the availability of such
technology, providing a reasonably written detailed description of such
technology, and Licensee shall have an exclusive option for a
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sixty (60) day period following the date of such written notice (the
"60-day Period"), to obtain an exclusive, irrevocable, worldwide,
royalty-bearing license (with the right to sublicense), under the
Licensor's patent rights and know-how, to practice (or practise) the
processes and methods and to make, use, sell, offer for sale,
import, develop and commercialize such *** Technology or the Other
Technology, as the case may be, ***. Licensor shall provide Licensee
with such information as is reasonably required by Licensee to
evaluate such technology. If the Licensee notifies the Licensor in a
timely manner within the 60-day Period that the Licensee wishes to
obtain such license to such *** Technology or Other Technology, the
Licensee and the Licensor shall, within one hundred twenty (120)
days of Licensee's notice to Licensor, promptly enter into exclusive
negotiations regarding the terms and conditions of such license
agreement in good faith, and enter into such license agreement with
respect to such *** Technology or Other Technology on the terms
described above. The Licensee will be under no obligation to accept
such offer of a license or to exercise its right to obtain a license
under this Section 2.6. If Licensee timely provides notice to
Licensor within the 60-day Period, but elects not to obtain a
license under this Section 2.6, then for a period of two (2) years
commencing on the date on which Licensee receives the Licensor's
written notification of disclosure with respect to such ***
Technology or Other Technology, before the Licensor may offer to a
third party the opportunity to obtain a license with respect to such
*** Technology or Other Technology on terms more favorable than
those offered to Licensee, the Licensor shall first offer each such
license opportunity to Licensee on such more favorable terms.
Licensee shall have sixty (60) days within which to accept or reject
each such offer.
3. ROYALTY.
3.1 ROYALTY.
In consideration of the licenses granted in Article 2, the Licensee
shall pay to the Licensor during the Royalty Term:
(a) subject to the provisions of Article 4, a royalty of:
(i) five percent (5%) *** in the Territory;
(ii) one percent (1%)*** in the Territory;
(iii) one percent (1%) *** in the Territory;
(iv) one percent (1%) *** in the Territory;
*** Confidential material redacted and separately filed with the Commission.
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(v) *** in the Territory;
(vi) *** in the Territory;
(vii) *** in the Territory; PROVIDED HOWEVER, that
such royalty amount shall ***;
(viii) *** in the Territory;
(ix) *** in the Territory; and
(b) *** For the avoidance of doubt it is agreed that
royalties and "sublicensing fees" for the purpose of this Section
3.1(b) ***
3.2 THIRD PARTY ROYALTIES.
In the event that Licensee, its Affiliates or sublicensee is required
to pay royalties ("Third Party Royalties") to any Third Party in any country in
order to exercise its rights under this Agreement to manufacture, use, sell,
offer for sale, import, commercialize or sublicense any Product or a technology
which embodies, utilizes, incorporates, requires, or is produced, processed or
otherwise manufactured with or infringes a Third Party technology right or an
intellectual property right, *** under this Article 3 with respect to sales of
such Product in such country; PROVIDED HOWEVER, that ***
3.3 COMBINATION PRODUCT.
In the event that one or more Products are sold in combination with one
or more other active or material components (a "Combination Product"), the Net
Sales Price, for purposes of determining Royalties on such Combination Product,
***. In the event that no such separate sales are made by Licensee, its
Affiliates or its sublicensees, the Net Sales Price for royalty determinations
shall be calculated by ***.
*** Confidential material redacted and separately filed with the Commission.
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3.4 STATEMENTS WITH ROYALTIES.
During the term of this Agreement following the First Commercial Sale
of a Product and following the Recovery of Research, Development and
Commercialization Expenses, Licensee shall furnish to Licensor a quarterly
written report showing in reasonably specific detail the items set forth below.
Reports shall be due on the ninetieth (90th) day following the close of each
quarter. Licensee shall keep 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. Each such quarterly statement shall contain
the following information:
(i) the gross sales of each category of Products
sold by Licensee or its Affiliates during the reporting period
and the calculation of the Net Sales Price of each category of
Products sold by Licensee or its Affiliates from such gross
sales;
(ii) the royalties payable, if any, which shall
have accrued hereunder based upon the Net Sales of each
Product;
(iii) the withholding taxes, if any, required by
law to be deducted in respect of such sales; and
(iv) the royalties payable, if any, which shall
have accrued hereunder based upon the royalties received from
Licensee's sublicensees for such sublicensees' sales of
Products.
3.5 PAYMENT OF ROYALTY.
The Licensee will pay the royalties shown to have accrued by each
royalty report provided for under Section 3.4 on the date such royalty report is
due. Payment of royalties in whole or in part may be made in advance of such due
date.
3.6 CURRENCY AND EXCHANGE RATE.
Each royalty payment provided for under this Agreement shall be paid in
United States dollars. With respect to sales of Products invoiced in United
States dollars, the gross sales, Net Sales, and royalties payable shall be
expressed in United States dollars. With respect to sales of Products invoiced
in a currency other than United States dollars, the gross sales, Net Sales and
royalties payable shall be expressed in the domestic currency of the party
making the sale together with the United States dollar equivalent of the royalty
payable. The United States dollar equivalent shall be calculated using the
average exchange rate (local currency per US$1) published in THE WALL STREET
JOURNAL, Western Edition, under the heading "Currency Trading," on each of the
last business days of each month during the applicable royalty period.
3.7 EXCHANGE CONTROL.
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If at any time legal restrictions prevent the prompt remittance of part
or all royalties with respect to any country in the Territory where the Product
is sold, Licensee shall have the right, in its sole discretion, to make such
payments by depositing the amount thereof in local currency to Licensor's
account in a bank or other depository institution in such country. If the
royalty rate specified in this Agreement should exceed the permissible rate
established in any country, the royalty rate for sales in such country shall be
adjusted to the highest legally permissible or government-approved rate.
3.8 TAXATION ON ROYALTIES.
(a) All income or withholding taxes levied in accordance
with the tax laws in any country within the Territory on the Royalty
payments to be made by the Licensee under this Agreement ***.
(b) *** the amount of any withholding taxes, value-added
taxes or other taxes, levies or charges with respect to such amounts,
payable by Licensee, its Affiliates or sublicensees, or any taxes
required to be withheld by Licensee, its Affiliates or sublicensees, to
the extent Licensee, its Affiliates or sublicensees pay to the
appropriate governmental authority ***.
(c) The Licensee will furnish the Licensor with tax
receipts or other certificates issued by the competent taxation office
showing the payment (if any) by Licensee of such taxes, levies or other
charges.
3.9 *** No royalty shall be payable by a sublicensee based upon
such sublicensee's licensing, making, using, offering for sale, importing or
sale of a product or service derived from such sublicensee's use ***.
3.10 AUDITING STATEMENTS.
Any statement provided under Section 3.4 will, if reasonably required
by the Licensor, be certified as correct by the Chief Financial Officer of the
Licensee, or if the Licensee does not have a Chief Financial Officer, by a
Person reasonably approved by the Licensor for this purpose, in each case, to
the actual knowledge of such Officer or Person.
*** Confidential material redacted and separately filed with the Commission.
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3.11 RECORDS.
The Licensee shall maintain for a period of three (3) years separate
and accurate records and accounts of the manufacture and sale of the Products,
the Net Sales of such Products, and any other information reasonably required by
the Licensor relevant to the products manufactured and sold and the
determination of Net Sales. Such separate and accurate records and accounts
shall be in reasonably sufficient detail.
3.12 AUDITING OF RECORDS.
The Licensee will upon reasonable notice and during ordinary business
hours, permit and give all reasonable assistance to an independent certified
public accounting firm of nationally recognized standing, selected by Licensor
and reasonably acceptable to Licensee, at Licensor's cost, to have access on a
confidential basis to all or any of such records required to be maintained by
the Licensee under Section 3.11 as may be reasonably necessary to verify the
accuracy of the royalty reports hereunder for any year not ending more than
twenty-four (24) months prior to the date of such report. The accounting firm
shall disclose to Licensee only whether the reports are correct or not and the
specific details concerning any discrepancies. No other information shall be
shared.
3.13 AUDITING OF SUBLICENSEES' RECORDS.
The Licensee will (to the extent possible), if reasonably requested by
the Licensor, at Licensor's cost, audit such records kept by any sublicensee
pursuant to any Sublicense under this Agreement for the purpose of verifying
Royalty payments made by the Licensee to the Licensor.
3.14 CONFIDENTIAL FINANCIAL INFORMATION.
Licensor shall treat all financial information subject to review under
this Article 3 as confidential, and shall cause its accounting firm to retain
all such financial information in confidence under Article 9 below.
4. MINIMUM ROYALTY.
During the Royalty Term and ***, the Licensee shall pay to the Licensor
a minimum annual royalty equal to the Minimum Royalty Amount as set forth below
in this Article 4. If during (a) the period commencing on the First Commercial
Sale and ending on the first anniversary date of such First Commercial Sale or
(b) any subsequent anniversary period thereafter during the Royalty Term, the
aggregate amount of Royalties paid to the Licensor under this Agreement is less
than *** (the "Minimum Royalty Amount"), the Licensee shall, within sixty (60)
days of the end of such anniversary period, pay to the Licensor the *** paid in
a year against the royalties payable to the Licensor under Article 3 above and
Licensor shall have the further *** credits which remain unused in any royalty
period to the following year.
*** Confidential material redacted and separately filed with the Commission.
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5. PATENT APPLICATION.
5.1 PATENT PROSECUTION.
During the term of this Agreement, the Licensor and the Licensee will
reasonably consult and cooperate together on actions to be taken with regard to
filing and the prosecution of patent applications in the Territory with respect
to the Licensed Technology. Licensee shall have the right (but not the
obligation) to control, at its sole cost and discretion, the preparation,
filing, prosecution and maintenance of all patents and patent applications
related to the Licensed Technology in each country within the Territory, unless
the parties otherwise agree. If Licensee elects not to control the preparation,
filing, prosecution or maintenance of a patent or patent application for the
Licensed Technology in any country within the Territory, the Licensor shall then
have the right to do so. Licensee shall give Licensor an opportunity to review
and comment on the text of each patent application subject to this Section 5.1
before filing, and shall supply Licensor with a copy of such patent application
as filed, together with notice of its filing date and serial number.
5.2 PATENTS IN NAME OF LICENSOR.
Unless otherwise agreed in writing between the Parties, or unless
otherwise required by the legislation of a particular country in which a patent
application in respect of any Licensed Technology may be made, all patents
solely developed, created or invented by the Licensor (except for patents on
jointly owned inventions, which will be jointly owned by the parties and
prosecuted in the joint names of the Licensor and Licensee) will be solely owned
by the Licensor and will be prosecuted in the name of the University and the
Parties will make all reasonable efforts to ensure that all documents and things
are executed and done by Parties or their employees, agents or representatives
to secure the grant of such patents in the name of the Licensor.
5.3 DUE DILIGENCE IN PROSECUTING APPLICATIONS.
Each Party will use all reasonable efforts and exercise due diligence
in prosecuting any patent application under Section 5.1 in full accordance with
all the relevant laws and requirements of the country concerned and each will
keep the other informed of all official actions and responses arising out of the
prosecution of such patent application.
5.4 COSTS OF PATENT PROSECUTION.
For so long as the Licensee retains the exclusive license granted under
Section 2.1 during the term of this Agreement, the Licensor will have the right
to seek reimbursement from the Licensee of all reasonable patent application
prosecution expenses it may incur after the date of this Agreement in connection
with the prosecution of any patent application under the Licensed Technology in
the Territory, unless the Licensee notifies the Licensor in writing of
Licensee's intention not to include such patent application to which such
expenditure may relate under the
<PAGE>
Licensed Technology; PROVIDED, HOWEVER, that any such expenses in excess of
$5,000 in any year shall require the prior written approval of Licensee.
5.5 PARTIES TO ASSIST IN PROSECUTION.
The Licensor and the Licensee each agree to give the other all
assistance (including the execution of all lawful papers and instruments, the
making of all rightful oaths and declarations and the taking of all actions) as
may be reasonably necessary in the preparation, filing, prosecution or
maintenance of all patents, patent applications and filings under this Article
5.
6. REGISTRATION.
During the term of this Agreement, the Licensor, at the request of the
Licensee, shall execute all lawful papers and instruments, make all rightful
oaths and declarations and take all reasonable actions, to enable the Licensee
at its expense, to become duly registered, licensed or otherwise legally
designated in any country in the Territory, as an exclusive licensee under the
Licensed Technology.
7. LICENSEE'S ENHANCEMENTS.
7.1 LICENSEE'S ENHANCEMENTS PROPERTY OF LICENSEE.
All inventions, enhancements and improvements to the Original Patents
or the Licensed Technology, originated developed, created, discovered or
invented by the Licensee, and all unpatentable and patentable inventions,
processes, formulae, technical information, compositions, compounds, methods,
expertise, know-how, practice, experience, skill and technical knowledge
relating to the Field which is originated, developed, created, discovered or
invented by the Licensee (collectively, the "Licensee's Technology") shall be
solely owned by the Licensee and all right, title and interest thereto and
therein shall vest in and be the exclusively property of the Licensee.
7.2 NON-EXCLUSIVE LICENSE OF LICENSEE'S TECHNOLOGY TO LICENSOR.
In consideration for the licenses granted by the Licensee to the
Licensor hereunder, during the term of this Agreement, the Licensor shall have
the right to negotiate with the Licensee for a Licensor during the term of this
Agreement a nontransferable, nonassignable, non-sublicensable, nonexclusive
license under the Licensee's Technology for the sole purpose of conducting
non-commercial, internal research in the Field at the Licensor's facilities.
8. STANDARDS OF MANUFACTURE AND LABELING.
8.1 COMPLIANCE WITH STANDARDS.
The Licensee will use all reasonable efforts to manufacture the
Products according to the requirements and specifications of any reasonably
applicable standards set forth by the country and the part of the Territory
where the particular Product is to be sold and the Licensee shall use
<PAGE>
all reasonable efforts to not sell any Products that do not meet such
specifications and requirements.
8.2 INDEMNITY.
Except as provided in Section 10.2, the Licensee shall indemnify the
Licensor against all liabilities, damages, costs or expenses, including
reasonable attorneys' fees and costs, in respect of all claims, demands,
actions, proceedings or prosecutions which may be brought, commenced or
prosecuted against the Licensor by a Third Party, relating to or arising out of
the manufacture, sale or commercial utilization of the Products by Licensee, its
Affiliates and its sublicensees.
8.3 INSURANCE.
In the event that insurance is available at commercially reasonable
rates, the Licensee will at all times following the First Commercial Sale of a
Product, maintain and keep current in respect of the Licensee's manufacture and
sale of the Products, product liability insurance obtained from a reasonably
reputable insurer and shall make available to the Licensor such policy for
inspection upon reasonable request by the Licensor.
9. SECRECY OBLIGATIONS.
9.1 CONFIDENTIALITY.
Subject to Section 9.2, during the term of this Agreement and for five
(5) years thereafter, each Party undertakes to the other Party to maintain in
confidence and not disclose to any third party all Confidential Information of
the other party and to ensure that its employees, agents, contractors,
subcontractors, solicitors and other advisers keep the Confidential Information
confidential and do not disclose it to any third party.
9.2 EXCEPTIONS.
A Party (the "Recipient") may reveal Confidential Information
of the other Party (the "Provider") which the Recipient
establishes:
(a) is required by law to be revealed, provided that the
Recipient immediately notifies the Provider of the requirement and
takes lawful steps to permit the Provider with an opportunity to oppose
or restrict such disclosure to preserve as far as possible the
confidentiality of the Confidential Information;
(b) is in or enters the public domain other than through
a breach of this Agreement; or
(c) is revealed to a sublicensee under a sublicense which
complies in all respects with the provisions of this Agreement
including, without limitation, the provisions of Section 2.3; and
<PAGE>
(d) was known to the Recipient before its disclosure by
the provider;
(e) is furnished to the Recipient by a third party
legally entitled to furnish such information and not under an
obligation of confidentiality to the Provider; or
(f) was independently developed by employees or agents of
the Recipient without access to or use of such information disclosed by
the Provider to the Recipient.
9.3 DISCLOSURE OF TERMS AND CONDITIONS OF THIS AGREEMENT.
Except as otherwise provided in Section 9.2 above, Licensor and
Licensee shall not disclose any terms or conditions of this Agreement to any
Third Party without the prior consent of the other party, PROVIDED THAT, either
party may disclose the terms and conditions of this Agreement in connection with
such party's merger, consolidation, change in control, sale of all or
substantially all its assets, an equity investment in such party by a Third
Party or such party's disclosure obligations pursuant to applicable disclosure
laws, rules or regulations. Notwithstanding the foregoing, prior to execution of
this Agreement, Licensor and Licensee shall agree upon the substance of
information that can be used to describe the terms of this transaction, and
Licensor and Licensee may disclose such information, as modified by mutual
agreement from time to time, without the other party's consent.
10. REPRESENTATIONS AND WARRANTIES.
10.1 BY EACH PARTY. Each party hereby represents and warrants to
the other party as follows:
(a) Such party is duly organized, validly existing and in
good standing under the laws of the state in which it is organized.
(b) Such party (a) has the power and authority and the
legal right to enter into this Agreement and to perform its obligations
hereunder, and (b) has taken all necessary action on its part to
authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly
executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in
accordance with its terms.
(c) All necessary consents, approvals and authorizations
of all governmental authorities and other Persons required to be
obtained by such party in connection with this Agreement have been
obtained.
(d) The execution and delivery of this Agreement and the
performance of such party's obligations hereunder (a) do not conflict
with or violate any requirement of applicable laws or regulations, and
(b) do not conflict with, or constitute a default under, any
contractual obligation of it.
<PAGE>
10.2 BY LICENSOR. The Licensor hereby represents, warrants and
covenants to the Licensee that:
(a) except as may otherwise be expressly notified to the
Licensee in writing, the Licensor has and for the duration of this
Agreement, will continue to have full right and title to the Patents,
the Patent Applications, the Inventions, the Information, the Know-How,
the Improvements and the Licensed Technology, except to the extent
co-owned with Licensee;
(b) the Licensor has the right to grant the license and
sublicense rights under this Agreement to the Licensee and the
Licensee's sublicensees;
(c) the Licensor is entitled to make all patent
applications which it has made, and the Licensor has not made knowing
use of any intellectual property or other rights of any third party in
the making of the patent applications;
(d) all Patent Applications filed by the Licensor at the
date of this Agreement have to the best knowledge of the Licensor been
made in the prescribed form and in the prescribed manner;
(e) the Patents, the Patent Applications, the Inventions,
the Information, the Know-How and the Improvements include or will
include all technology owned by or registered in the name of the
Licensor or to which the Licensor is beneficially entitled on or
relating to the Field and possessed, invented, developed or acquired by
or for the Licensor;
(f) all Inventions, Information, Know-How and
Improvements supplied to the Licensee by the Licensor will be to the
best of the knowledge and belief of the Licensor true, accurate,
reliable and up-to-date; and
(g) Licensor (a) is the sole owner or exclusive licensee
of the Licensed Technology, and except as Licensor has expressly
informed Licensee in writing prior to the date of this Agreement, has
not granted to any Third Party any license or other interest in the
Licensed Technology; (b) is not aware of any Third Party patent, patent
application or other intellectual property rights that would be
infringed (i) by practicing any process or method or by making, using
or selling any composition which is claimed or disclosed in the Patents
or which constitutes Information and Know-How, or (ii) by making, using
or selling Products; and (c) is not aware of any infringement or
misappropriation by a Third Party of the Licensed Technology.
10.3 INDEMNITY.
The Licensor will indemnify the Licensee (including its employees,
agents and representatives) throughout the term of this Agreement against legal
liability, and against the costs of any claims or actions arising under this
Agreement to the extent that the liability is directly caused by negligent acts
or by omissions of the Licensor in the carrying out of its
<PAGE>
obligations under this Agreement or is caused by a breach of any warranty,
representation or covenant given by the Licensor under this Agreement.
11. FAILURE TO GRANT OR SUBSEQUENT REVOCATION OF TRUST.
11.1 ROYALTIES TO BE REDUCED.
If as a result of the *** the Licensee, its Affiliates or any of the
Licensee's sublicensees in such part of the Territory is significantly adversely
affected with regard to the research, development, commercialization,
manufacture, use, import, offering for sale, sale or profitability of a Product,
*** (i) through an order of a court, other governmental or administrative order
(A) against which no appeal can be taken declaring the relevant patents invalid,
unenforceable or otherwise (as the case may be) or (B) refusing to grant or
recognize the relevant Patent, Patent Application or other intellectual property
right under the Licensed Technology becomes final, (ii) through a law,
regulation or statute or (iii) otherwise; PROVIDED HOWEVER, *** if the Licensee
reasonably demonstrates to the Licensor good and sufficient reason for such
reduction.
11.2 REDUCTION OF ROYALTY GUARANTEE.
***, the Royalties payable to the Licensor by Licensee under this
Agreement *** and this Agreement shall be deemed automatically amended
accordingly.
12. PATENT INFRINGEMENT.
12.1 NOTIFICATION OF INFRINGEMENT.
Each party shall notify the other party of any infringement in the
Territory known to such party of any Patents and shall provide the other party
with the available evidence, if any, of such infringement.
12.2 ENFORCEMENT OF PATENT RIGHTS.
Licensee, at its sole expense, shall have the right to determine the
appropriate course of action to enforce all intellectual property rights within
the Licensed Technology (including without limitation, any Patent, patent right,
trade secret right, or other right) or otherwise abate the infringement thereof,
to take (or refrain from taking) appropriate action to enforce all intellectual
property rights within the Licensed Technology, to control any litigation or
other enforcement action and to enter into, or permit, the settlement of any
such litigation or other enforcement action with respect to the intellectual
property rights within the Licensed Technology, and shall consider, in good
faith, the interests of Licensor in so doing. If Licensee does not, within one
hundred twenty (120) days of receipt of notice from Licensor, abate the
infringement or file suit to enforce the intellectual property rights within the
Licensed Technology against at least one infringing party in the Territory,
Licensor shall have the right to
*** Confidential material redacted and separately filed with the Commission.
<PAGE>
take whatever action it deems appropriate to enforce such intellectual property
rights within the Licensed Technology; PROVIDED, HOWEVER, that, within thirty
(30) days after receipt of notice of Licensor's intent to file such suit,
Licensee shall have the right to jointly prosecute such suit and to fund up to
one-half (1/2) the costs of such suit. The party controlling any such
enforcement action shall not settle the action or otherwise consent to an
adverse judgment in such action that diminishes the rights or interests of the
non-controlling party without the prior written consent of the other party. All
monies recovered upon the final judgment or settlement of any such suit to
enforce the intellectual property rights within the Licensed Technology shall be
shared, after reimbursement of expenses, by Licensor and Licensee PRO RATA
according to the respective percentages of costs borne by each in such suit.
Notwithstanding the foregoing, Licensor and Licensee shall fully cooperate with
each other in the planning and execution of any action to enforce the
intellectual property rights within the Licensed Technology.
12.3 NOTIFICATION.
In the event either Party asserts a claim or institutes an action as a
result of an actual or apparent infringement of any intellectual property right
within the Licensed Technology, such party will immediately notify the other
party.
12.4 ASSISTANCE.
Either Party (the "Cooperating Party") will if required by a Party
asserting a claim or prosecuting an action pursuant to this Article 12 (the
"Asserting Party"), lend its name and will otherwise do all acts and things the
Asserting Party may reasonably require to assist the Asserting Party in
performing its obligations under this Article 12. Without limiting the preceding
sentence, the Cooperating Party will execute all documents and do all things
reasonably necessary to aid and co-operate in the prosecution of any action
bought by the Asserting Party pursuant to Article 12.
13. TERMINATION.
13.1 EXPIRATION.
Subject to the provisions of Sections 13.2 and 13.3 below, this
Agreement shall expire on the expiration of Licensee's obligation to pay
royalties to the Licensor under Section 3.1 above.
13.2 TERMINATION BY LICENSOR.
The Licensor may at any time terminate this Agreement upon the
happening of any of the following events (other than a "Force Majeure Event"):
(a) if an order is made or a resolution passed for the
winding up or the dissolution without winding up or liquidation of the
Licensee, provided always that default shall not be deemed to have
occurred where the winding up, dissolution or
<PAGE>
liquidation is for the purpose of a reorganization, merger,
consolidation, reconstruction or amalgamation and the scheme for such a
reorganization, merger, acquisition, consolidation, reconstruction or
amalgamation requires the surviving entity to assume all of the
Licensee's liabilities hereunder;
(b) if default is made by the Licensee in payment of
Royalty, and where such default is not remedied within ninety (90) days
after written notice specifying such default and requiring the Licensee
to remedy the same has been given by the Licensor to the Licensee; or
(c) if material default is made by the Licensee in
performance or observance of any material provision of this Agreement
other than a default referred to in subparagraph (b) above, and where
such default is capable of remedy such default is not remedied within
one hundred and eighty (180) days after written notice specifying such
default and requiring the Licensee to remedy the same has been by the
Licensor to the Licensee.
13.3 TERMINATION BY LICENSEE.
The Licensee may at any time terminate this Agreement:
(a) by notice if material default is made by the Licensor
in the performance or observance of any provision of this Agreement,
and where such default is capable of remedy such default is not is not
remedied within ninety (90) days after written notice specifying such
default and requiring the Licensor to remedy the same has been given by
the Licensor; PROVIDED HOWEVER, that Licensee shall also have the right
to elect not to terminate this Agreement and during the period of such
material default by Licensor under this paragraph (a), any royalties
payable to Licensor by Licensee shall be reduced by fifty percent
(50%); or
(b) in its sole discretion, on a Product-by-Product basis
or otherwise, upon thirty (30) days prior written notice to Licensor.
14. EFFECTS OF TERMINATION.
14.1 EFFECTS OF TERMINATION.
Upon terminating of this Agreement for any reason whatsoever:
(a) each Party will return to the other Party all of the
second mentioned Party's Confidential Information in the possession or
under the control, or in the possession or under the control of the
servants or agents of the mentioned Party.
(b) subject to paragraph (c) of this Section 14.1 neither
Party will have any further rights in relation to the other Party's
Confidential Information whether under common or other law, statute or
otherwise and, each Party will, at its own expense,
<PAGE>
execute and deliver to the other Party such instruments and take all
other action as the other Party deems reasonably necessary to ensure
the termination of any such rights, and to vest every interest in the
Confidential Information in the Party owning that Confidential
Information.
(c) any Sublicense will remain in full force and effect
provided the sublicensee is not in breach of the Sublicense and
performs all reasonable actions required by the Licensor to effect a
novation of the Sublicense to the Licensor;
(d) Sections 3.14, 8.2, 8.3, 10.2, 10.3, 14.1 and
Articles 9, shall survive any termination or expiration of this
Agreement;
(e) Section 3 will continue in force and effect until all
applicable Royalties payable under this Agreement are paid.
14.2 ACCRUED RIGHTS AND OBLIGATIONS.
Upon expiration of this Agreement, Licensee shall have a paid-up,
worldwide, royalty-free exclusive license (with the right to grant sublicenses)
under the Licensed Technology to make, use, sell, offer for sale, import,
develop and commercialize Products. Expiration or termination of this Agreement
will not affect any rights or obligations which may have accrued, to either
Party, prior to the date of such termination.
15. GENERAL.
15.1 WAIVER.
Any waiver or other indulgence by either Party in respect of any
obligation of the other party under this Agreement will operate only if in
writing and will apply only to the specified instance, and will not constitute a
waiver of or an indulgence in respect of any other right or obligation under
this Agreement.
15.2 ENTIRE AGREEMENT.
This Agreement constitutes the whole and entire agreement between the
Parties and replaces all previous representations, understandings or
arrangements given or made by the Parties, whether oral or in writing.
15.3 ASSIGNMENT.
Neither Party will assign all or any of its rights under this Agreement
without the prior written consent of the other Party, which consent must not be
unreasonably withheld, except that the Licensee may assign its rights without
consent to any party with which it may merge or consolidate or to which it may
transfer all or substantially all of its assets, provided other such party
agrees in writing to assume all of the Licensee's obligations hereunder.
<PAGE>
15.4 APPLICABLE LAW.
This Agreement is governed by and to be construed according to the laws
of the State of New York without regard to the conflicts of laws principles
thereof.
15.5 AMENDMENTS.
This Agreement may not be varied except in writing signed by the
Parties.
15.6 SEVERABILITY.
If any Provision of this Agreement is held by a court to be unlawful,
invalid, unenforceable or in conflict with any rule of law, statute, ordinance
or regulation, the validity and enforceability of the remaining provisions will
not be thereby affected.
15.7 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 term of this Agreement to the extent, and
for so long as, 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 be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other Party.
15.8 NOTICES.
Any consent, notice or report required or permitted to be given or made
under this Agreement by one of the parties hereto to the other party shall be in
writing, delivered personally or by facsimile (and promptly confirmed by
personal delivery, first class mail (or materially similar mail) or courier),
first class mail 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 (except as
otherwise provided in this Agreement) shall be effective upon receipt by the
addressee.
If to Licensor: Centre for Genome Research
University of Edinburgh
Address: King's Buildings
West Mains Road,
Edinburgh EH9 3JQ,
United Kingdom
Facsimile: (131) 667 0164
If to Licensee: Deltagen, Inc.
<PAGE>
Address: 1031 Bing Street
San Carlos, California 94070
Facsimile: (650) 610-6823
(a) if given by hand, will be deemed to have been given
on the day it was so delivered;
(b) if given by mail, will be deemed to have been given
seven clear business days after being sent pre-paid mail;
(c) if given by facsimile, will be deemed to have been
given on the day on which the facsimile is sent and the sender's
machine records that the transmission has been received by the
recipient's facsimile machine and, a hard copy of the relevant notice
shall be sent to the recipient by first class pre-paid mail within
twenty-four (24) hours of a successful transmission report by the
sender's facsimile machine.
15.9 FURTHER AGREEMENTS.
Each Party shall execute, acknowledge and deliver such agreements,
deeds and documents and do or cause to be done all such other acts and things as
shall be necessary or appropriate to give effect to this Agreement or to carry
out the purposes and intent of this Agreement.
15.10 CHARGES.
All stamp duties and governmental charges arising out of or incidental
to this Agreement (other than charges with respect to the payment of income
taxes by Licensor) shall be the responsibility of and payable by the Licensee.
IN WITNESS WHEREOF the Parties have executed this Agreement on the date
and in the year first above written.
UNIVERSITY OF EDINBURGH
By: /s/ M.D. Cornish
---------------------------------------
Name: M.D. Cornish
-------------------------------------
Title: Deputy Secretary
------------------------------------
DELTAGEN, INC.
<PAGE>
By: /s/ William Matthews, Ph.D.
---------------------------------------
Name: William Matthews, Ph.D.
-------------------------------------
Title: President and Chief Executive
------------------------------------
