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EXHIBIT 10.20
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
TECHNOLOGY AGREEMENT
GENERATION OF KNOCKOUT MOUSE STRAINS
between
DELTAGEN, INC.
1031 Bing Street
San Carlos, CA 94070
and
MERCK & CO, INC.
One Merck Drive
P.O. Box 100
Whitehouse Station, New Jersey 08889-0100
WHEREAS, Deltagen, Inc. ("Deltagen") and Merck ("Merck"),
(collectively, "Parties") seek to collaborate in scientific research
related to generation of Knockout Mouse strains;
WHEREAS, Deltagen has knowledge and experience in research and generation of
Knockout Mice; and
WHEREAS, Merck wishes to obtain Knockout Mice generated by Deltagen according
to specifications agreed by the Parties.
1. DEFINITIONS
As used in this.Agreement the following terms shall have the meanings as
specified:
1.1 "Merck Affiliate" shall mean (i) any corporation or business entity of
which fifty percent (50%) or more of the securities or other ownership
interest representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or
indirectly, by Merck; or (ii) any corporation or business entity which,
directly or indirectly, owns, controls, or holds 50 percent (50%) (or
the maximum ownership permitted by law) or more of the securities or
other ownership interest representing the equity, the voting stock or,
if applicable, the general partnership interest, of Merck.
1.2 "Effective Date" shall mean the date of the signature of the
representative of the last of the Parties to execute this
Agreement.
1.3 "Joint Patents" shall mean all patent and patent applications,
worldwide, for subject matter which is jointly developed during the
course of this Agreement by both Deltagen and Merck and which is useful
or necessary in the generation of the Knockout Mice under this
Agreement.
1.4 "Joint Technology" shall mean all know-how and technology related to
the generation of Knockout Mice as well as biological, molecular
biological and genetic work and technology in each case, which is
developed jointly hereunder by Deltagen and Merck and which is useful
in the generation of the Knockout Mice under this Agreement.
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1.5 "Knockout Mice" shall mean a line of chimeric mice developed for and
delivered to Merck as set forth in Article 2 below, having a Standard
Mutation wherein such mice transmit the Standard Mutation, in the form
of a mutant allele, through the germ line.
1.6 "Knockout Mouse Project" shall mean the creation, testing and
generation, by Deltagen, of Knockout Mice.
1.7 "Deltagen Patents" shall mean any and all patents and patent
applications, worldwide, owned by Deltagen with respect to Knockout
Mice.
1.8 "Deltagen Technology" shall mean technology related to the generation
of Knockout Mice or other animals, as well as biological, molecular
biological and genetic work and technology developed solely by Deltagen
with respect to Knockout Mice delivered to Merck under this Agreement.
1.9 "Merck Patents" shall mean any and all patents and patent applications,
world-wide, owned by Merck, with respect to * * * .
1.10 "Merck Technology" shall mean technology related to * * *, as well
as * * * work and technology developed solely by Merck * * *.
1.11 "Milestone Payments" shall mean those payments set forth at Appendix A
attached hereto.
1.12 "Standard Mutation' `shall mean the interruption or deletion in a
portion of a single, specified gene by * * *.
1.13 "Non-Standard Mutations" shall mean any mutation other than a "Standard
Mutation." Examples of non-standard mutations include* * *.
Non-standard mutations also includes * * *.
1.14 "Standard Procedure" shall mean the set of procedures described in
Appendix A, with respect to "Milestone 1" through "Milestone 5."
2. RESEARCH AND WORK TO BE CONDUCTED
2.1 Deltagen shall conduct one or more Knockout Mouse Projects at the
request of Merck on the terms and conditions of this Agreement. Merck
will request Deltagen in writing to begin work on each Knockout Mouse
project to be conducted under this Agreement, such written notice to be
provided to Deltagen by an authorized representative of Merck in the
form set forth in Appendix B. Deltagen shall have the right to evaluate
such request and the information provided to Deltagen by Merck under
Section 2.3 below, to determine whether such requested Knockout Mouse
project is feasible. If, after good faith discussion with Merck,
Deltagen reasonably determines that such project is not technically
feasible, within the parameters of Appendix A, Deltagen shall so advise
Merck in writing and shall not be required to undertake such project.
2.2 For each Knockout Mouse Project, Deltagen will use reasonable efforts
to complete each Milestone in a timely fashion, as defined in Appendix
A.
2.3 Deltagen shall undertake up to * * * Knockout Mice Projects according
to the terms and conditions set forth in this Agreement. To initiate
each Knockout Mouse project the parties agree to undertake, Deltagen
and Merck will establish a timetable for each project Milestone, and
Merck shall:
* * * Confidential material redacted and separately filed with the Commission.
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2.3.1 Identify to Deltagen in writing each Knockout Mouse Project
to be initiated;
2.3.2 Disclose in writing to Deltagen * * * useful in completing
Milestone 1 with respect to each Knockout Mouse Project, as
defined at Appendix A;
2.3.3 Consult with Deltagen to identify the specific region of the
gene Merck desires to have deleted for such Knockout Mouse
Project;
2.3.4 Transfer to Deltagen * * * may be * * *; and
2.3.5 Identify and notify Deltagen in writing of the specific gene
sequence for each Knockout Mouse Project for which Deltagen is
requested by Merck to produce a Knockout Mouse. Merck shall be
solely responsible for identifying and notifying Deltagen in
writing of the specific gene sequence for each Knockout Mouse
project.
2.4 For purposes of the schedule set forth in Appendix A, each Knockout
Mouse Project conducted hereunder shall commence fifteen (15) days
after Deltagen's receipt from Merck of all information and materials
set forth in Section 2.3 relating to such Knockout Mouse Project.
2.5 Each Knockout Mouse Project shall be deemed complete upon Deltagen's
completion of Milestone 5 (see Appendix A) and Deltagen's delivery
after the birth of the first generation of Knockout Mice of at least
* * *. Deltagen, for a period of six (6) months following the
completion of each Milestone 5 for each Knockout Mouse Project, shall
retain a small backup colony of * * * from such project consisting of
* * * for each Knockout Mouse Project). With respect to such backup
colonies of Knockout Mice, Merck shall for a period not to exceed six
(6) months following completion of Milestone 5 pay to Deltagen* * *.
At Merck's request, Deltagen will transfer the mice to Merck. All
reasonable transportation and transfer costs shall be paid by Merck.
If Merck does not request transfer within the six month period,
Deltagen, following Deltagen's written notification to Merck, shall
dispose of the mice in accordance with all applicable laws and
regulations.
2.6 Deltagen shall use reasonable efforts to * * * and to generate Knockout
Mice under each Knockout Mouse project according to the specification
of Merck as set forth in Section 2.3 above.
2.7 Deltagen shall, at all times in its animal care and handling activities
related to this Agreement, comply with all applicable Federal, State
and local laws and regulations, and assure that Deltagen animal
facilities meet or exceed minimum accreditation standards including,
but not limited to those established by * * * and the * * * for the
Care and Use of Laboratory Animals. Deltagen shall have sole liability
for the care and handling of the Knockout Mice until they are delivered
to Merck in accordance with Section 7.6 below.
3. PAYMENTS
3.1 Within thirty (30)days afterthe Effective Date, Merck shall payto
Deltagen * * * for the * * * calculated in accordance with Appendix
A. Such payment shall be * * * Milestones as set forth in Appendix A.
3.2 Merck shall pay to Deltagen for each Milestone completed by Deltagen:
* * * Confidential material redacted and separately filed with the Commission.
3
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3.2.1 The Milestone Payments set forth in Appendix A are for all
Knockout Mouse Projects wherein a * * * is requested by Merck
under Section 2.3 above, so long as the Project is initiated
during the term of this Agreement. The Milestone Payments for
all Knockout Mouse Projects wherein a * * * is requested,
shall be determined on a case-by-case basis, upon good faith
negotiations between the parties and shall be mutually agreed
to in writing by the parties.
3.3 Deltagen shall inform Merck, in writing, of its completion of each
Milestone, as defined in Appendix A. In such written notice, Deltagen
shall certify that the Knockout Mice delivered to Merck conform to the
Knockout Mice specifications for each Knockout Mouse Project set forth
in Appendix A, and Deltagen shall provide with each delivery of
Knockout Mice to Merck all of the information and data described in
Appendix A for each Knockout Mouse Project.
3.4 Subject to payment credit as provided in Section 3.1, Merck shall pay
all Milestones to Deltagen within thirty (30) days after Merck's
receipt of written representation from Deltagen of Deltagen's
completion of Milestones in compliance with the terms of this
Agreement.
4. ON-SITE CONSULTATION
4.1 Merck may reasonably request on-site consultations by Deltagen
personnel relating directly to projects under this Agreement. Merck
will reimburse Deltagen for all reasonable and reasonably documented
travel expenses associated with such onsite consultations by Deltagen
personnel.
4.2 Upon reasonable notice to Deltagen and upon reasonable terms and
conditions agreed upon by Deltagen and Merck, Merck shall be entitled
to perform site visits to Deltagen facilities involved in the Knockout
Mouse Projects to inspect the facilities for compliance with generally
accepted scientific and animal care procedures including, but not
limited to those set forth in Appendix A and Section 2.7 above.
5. TERM AND TERMINATION
5.1 The term of this Agreement shall commence on the Effective Date and
shall remain in effect until the earlier of either (a) termination of
this Agreement pursuant to the completion by Deltagen of all Milestones
under this Agreement or (b) two (2) years from the Effective Date;
provided, however, that all applicable obligations of Deltagen and
Merck under this Agreement shall remain in force with respect to any
Knockout Mouse Project requested by Merck and initiated by Deltagen
which remains ongoing prior to the date set forth in subsection (b) of
this paragraph.
5.2 Merck may unilaterally terminate a Knockout Mouse Project for any
reason. Should Merck at any time during the Knockout Mouse Project
terminate the development and creation or completion of a specific
Knockout Mouse Project, Merck shall make the next Milestone Payment
corresponding to that work being conducted by Deltagen to complete such
Milestone at the time of termination, as if Deltagen had completed the
Milestone, regardless of whether such Milestone has been reached.
5.3 Deltagen may terminate a Knockout Mouse Project upon Deltagen's
identification of technical difficulty beyond the reasonable control of
Deltagen which would prevent Deltagen from completing the Project using
commercially reasonable efforts, provided that Deltagen has
* * * Confidential material redacted and separately filed with the Commission.
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informed Merck, in writing, of the details of such technical
difficulty, and the parties have had an opportunity to discuss the
circumstances to attempt to resolve the technical difficulty in a
reasonable manner. Merck is not entitled to a refund of any past
Milestone payments paid if a project is terminated as the result of
technical difficulty beyond the control of Deltagen.
5.4 If either of the Parties is in breach of any obligation under this
Agreement, the party complaining of said breach shall give written
notice to the breaching party to remedy such breach. If the breach is
not remedied within 60 days following the receipt of such notice, the
party complaining of breach may terminate this Agreement upon written
notice to the other party at any time and with immediate effect. Any
such termination will be without prejudice to any other rights which
the party complaining of breach may have as a result of any breach of
this Agreement.
6. CONFIDENTIALITY
6.1 Each party shall treat all information which has been received from the
other party as strictly confidential ("Information"), and shall not to
make such Information available to any third party without the express
prior written consent of the other party and only to use such
Information for the purposes expressly provided in this Agreement. For
this purpose, employees and consultants of the parties shall be bound
by obligations of confidentiality and secrecy no less strict than those
set out herein and shall not be regarded as third parties.
6.2 The above obligations shall not apply or cease to apply to Information
which the recipient can show:
(a) has become generally available to the public other than
through violation of this undertaking;
(b) was already in the recipient's rightful possession prior to
its acquisition from the disclosing party;
(c) was developed independently of information received from the
disclosing party;
(d) has been lawfully received from a third party, under no
obligation to maintain the Information as confidential; or
(e) is required to be disclosed by law or court order, provided
that notice is promptly delivered to the other party in order
to provide an opportunity to challenge or limit such
disclosure.
A statutory obligation to disclose confidential information to
governmental authorities in connection with the Food and Drug
Administration product registration procedures is not subject to this
secrecy obligation.
6.3 This obligation of confidentiality shall survive the expiration and/or
termination of this Agreement for a period of * * * years.
6.4 Upon expiration or termination of this Agreement, or at any time upon
the disclosing party's written request, the receiving party shall
destroy, or at the written request of the disclosing party, deliver to
the disclosing party any and all Information (including copies)
received or
* * * Confidential material redacted and separately filed with the Commission.
5
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generated hereunder, except that the receiving party may,
for archival purposes, maintain one copy of the Information in its
confidential legal files.
7. OWNERSHIP OF RIGHTS
7.1 Deltagen shall own all Deltagen patents and Deltagen technology.
Additionally, any Deltagen patents or Deltagen technology arising out
of the work performed pursuant to this Technology Agreement and which
apply to the production of Knockout Mice shall be owned solely by
Deltagen. Deltagen hereby grants to Merck a nonexclusive, * * * license
to Deltagen Patents, Deltagen Technology and Deltagen inventions solely
arising during the Knockout Mice Projects under this Agreement which
are useful or necessary for Merck (a) to use, breed and perform further
research and development using the Knockout Mice generated hereunder
(and their progeny), and (b) to sublicense such rights to use, breed
and perform further research and development using the Knockout Mice to
agents, consultants and Affiliates of Merck; PROVIDED HOWEVER that
Merck and its sublicencees shall not have a license to use (and shall
not use) the Knockout Mice (or their progeny), Deltagen Patents,
Deltagen Technology or Deltagen inventions, directly or indirectly to
reverse-engineer the methods, processes, techniques or similar Deltagen
know-how relating directly or indirectly to the design, creation,
development, generation or production of such "Knockout Mice" or other
transgenic mice or animals.
7.2 Merck will own all Merck patents and Merck technology. Merck will grant
to Deltagen a non-exclusive, non-sublicensable license to all Merck
patents necessary for Deltagen to make Knockout Mice solely for Merck
according to this Agreement. Merck shall own all phenotypic data and
characteristics of the Knockout Mice generated by Deltagen for Merck
under this Agreement; provided however, that Deltagen shall have a
nonexclusive, nontransferable license to use such phenotypic data and
characteristics for Deltagen's research analysis solely for Merck in
accordance with the purposes of this Agreement.
7.3 Joint Patents and Joint Technology will be owned by both Parties
jointly. Both parties shall decide whether it is desirable for patent
applications to be filed for Joint Technology developed. If a patent
application is filed, the Parties shall share costs equally. If one
party wishes to patent Joint Technology, but the other party does not,
then the party wishing to file the application may do so at its own
expense. In such instance, the party filing the application will own
all rights in the patent application and the other party shall assign
its rights in the patent application to the party filing the
application, provided that the non-filing party shall be granted a
nonexclusive license to use such rights under such patent application.
7.4 Both Parties shall decide whether to maintain patents or patent
applications within the Joint Patents and the extent of foreign filing
of such patent applications. If one party wishes to abandon a patent or
patent application within the Joint Patents, but the other party wishes
to maintain it, the party wishing to maintain it may do so by paying
all necessary fees; the party paying the fees shall own all rights in
this patent or patent application and the other party will assign its
rights in such patent or patent application to the paying party. If the
Parties disagree on whether to file a patent application within the
Joint Patents in any given country, the party wishing to file in such
country may do so at its own expense, and will own all rights in such
patent application in such country and the other party will assign its
rights in such patent application to the party filing the application.
7.5 As of the date of this Agreement, Deltagen represents and warrants to
Merck that to Deltagen's * * *, Deltagen has the right to enter into
this Agreement and to grant to Merck the licenses
* * * Confidential material redacted and separately filed with the Commission.
6
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hereunder. As of the date of this Agreement, Merck represents and
warrants to Deltagen that to Merck's * * *, Merck has the right to
enter into this Agreement and to grant Deltagen the licenses hereunder.
Deltagen shall indemnify and hold harmless Merck and its
Affiliates, Directors, officers,, employees and agents from and against
any and all losses, Liabilities, damages and expenses (Including
reasonable attorneys' fees and costs) (collectively "liabilities") that
they may suffer as a result of any claims, demands, actions or other
proceedings made or instituted by any third party and arising out of or
relating to (a) a breach of any representation, warranty or covenant of
Deltagen under this Agreement or (b) Deltagen's gross negligence or
willful misconduct, except in each case to the extent such Liabilities
resulted from the gross negligence or willful misconduct of Merck.
Merck shall indemnify and hold harmless Deltagen and its
directors, officer, employees and agents from and against any and all
Liabilities that they may suffer as a result of any claims, demands,
actions or other proceedings made or instituted by any third party and
arising out of or relating to (a) a breach of any representation,
warranty or covenant of Merck under this Agreement or (b) Merck's gross
negligence or willful misconduct except in each case to the extent such
Liabilities resulted from the gross negligence or willful misconduct of
Deltagen.
7.6 After Merck has made all applicable Milestone Payments or other
payments under Section 3.2 above, and upon delivery by Deltagen to
Merck's designated carrier (FOB), title shall transfer to Merck and
Merck shall own exclusively all Knockout Mice produced under this
Agreement, * * * made by Deltagen on behalf of Merck, regardless of
whether they are * * * or to non-Knockout Mice. Merck shall have the
exclusive right to use the Knockout Mice, and their progeny, for any
purpose, without restriction, including, but not limited to, research,
development, production, breeding, sales and distribution of the
Knockout Mice to agents, consultants and Merck Affiliates; provided
however that Merck shall not use the Knockout Mice directly or
indirectly to reverse-engineer the methods, processes, techniques or
similar Deltagen know-how relating directly or indirectly to the
design, creation, development, generation or production of such
Knockout Mice.
8. MISCELLANEOUS
8.1 PUBLICATION. If Merck publishes any information, data or material
regarding the Knockout Mice contemplated under this Agreement, Merck
shall acknowledge within the publication, the contribution of Deltagen
to the generation of such mouse or mice.
8.2 FORCE MAJEURE. Neither party shall be liable for its failure to perform
its obligations under this Agreement due to contingencies beyond its
reasonable control, including but not limited to strikes, riots, wars,
fire, flood, accident, labor disputes, embargoes, inability to obtain
export or import license, acts of God, or acts in compliance with any
governmental or state law, regulation or other.
8.3 AMENDMENTS. Amendments or modifications of this Agreement may only be
made by a written Agreement executed by both Parties.
* * * Confidential material redacted and separately filed with the Commission.
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8.4 NOTICES. All notices required or permitted hereunder shall be given in
writing and sent postage prepaid by first class certified or registered
mail, or sent by a nationally recognized express courier service, or
hand delivered at the following addresses:
If to Deltagen:
William Matthews
President
Deltagen, Inc.
* * *
Fax: (650) 610-6823
If to Merck:
* * *
Executive Director
Scientific Liaison
External Scientific Affairs
Merck & Co., Inc.
770 Sumneytown Pike
P.O. Box 4, WP42-217
West Point, PA 19486
8.5 REPRESENTATIONS AND WARRANTIES. Each party represents and warrants
that:
8.5.1 It will use commercially reasonable efforts to complete its
obligations under this Agreement in compliance with any and
all applicable federal, state, or local laws, regulations and
guidelines.
8.5.2 It shall devote the necessary level of personnel and resources
to conduct and complete its obligations in a commercially
reasonable manner under this Agreement.
8.6 LIMITATION OF WARRANTY AND LIABILITY. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THIS AGREEMENT, DELTAGEN MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE KNOCKOUT MICE GENERATED UNDER THIS
AGREEMENT OR THE KNOCKOUT MOUSE PROJECTS. DELTAGEN DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION A WARRANTY
OF NON-INFRINGEMENT AND THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR LOSS OF PROFITS OR INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR THE
RESEARCH, DEVELOPMENT, GENERATION OR USE OF THE KNOCKOUT MICE UNDER
THIS AGREEMENT.
8.7 APPLICABLE LAW AND VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as
though made and performed in said state without regard to its conflict
of law revisions.
8.8 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
* * * Confidential material redacted and separately filed with the Commission.
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8.9 U.S. EXPORT LAWS AND REGULATIONS. Without limitation, each party shall
comply with all laws and regulations of the United States relating to
the export of biological materials, products and technical information.
8.10 ENTIRE AGREEMENT. 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 superseded by this Agreement.
8.11 INDEPENDENT CONTRACTORS. It is expressly agreed that Deltagen and Merck
shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or
agency. Neither Deltagen nor Merck shall have the authority to make any
statements, representations or commitments or any kind, or to take any
action, which shall be binding on the other, without the prior consent
of the party to do so.
8.12 WAIVER. The waiver by either party 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.
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AGREED AND ACCEPTED:
DELTAGEN, INC. MERCK & CO., INC.
BY /s/ William Matthews BY /s/ C. Thomas Caskey
---------------------------- -----------------------------
NAME William Matthews NAME C. Thomas Caskey
TITLE President TITLE Senior Vice President, Research
DATE July 13th, 1998 DATE July 10, 1998
10
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APPENDIX A
[Superceded by Appendix A to Amendment to Technology Agreement]
11
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APPENDIX B
FORM NOTIFICATION LETTER FOR INITIATION OF A NEW KNOCKOUT-MOUSE PROJECT
(Template follows)
(Merck letterhead)
Date
Bill Matthews, Ph.D.
President
Deltagen, Inc.
***
Dear Bill,
This letter is to provide notice to Deltagen of Merck's request to Deltagen to
initiate work on a Knockout Mouse Project under the terms and conditions of the
Technology Agreement between Deltagen, Inc. and Merck, dated
_____________________ (the "Agreement"), including, but not limited to, the
confidentiality obligations of the Agreement. The Knockout Mouse Project to be
initiated is described as follows:
The Merck contact scientist for technical information regarding the project will
be:
Merck requests that Deltagen begin to work to develop the above described
Knockout Mouse on the terms and conditions of the above-referenced Agreement.
Sincerely,
Merck's Signatory
Agreed,
-------------------------------------
Deltagen
* * * Confidential material redacted and separately filed with the Commission.
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AMENDMENT TO
TECHNOLOGY AGREEMENT
THIS AMENDMENT TO TECHNOLOGY AGREEMENT, dated as of December 21, 1999
(this "Amendment"), is entered into between DELTAGEN, INC. ("Deltagen"), having
a place of business at 1003 Hamilton Avenue, Menlo Park, California 94025, and
MERCK & CO, INC. ("Merck"), having a place of business at One Merck Drive, P.O.
Box 100, Whitehouse Station, New Jersey 08889-0100, and is made with reference
to the following facts:
A. WHEREAS, the parties entered into that certain Technology Agreement
on July 13, 1998 (the "Technology Agreement").
B. WHEREAS, the parties desire to modify the Technology Agreement to
increase the number of Knockout Mice under the Technology Agreement, to extend
the term of the Technology Agreement and to modify such other terms as set forth
below.
NOW, THEREFORE, in consideration of the mutual covenants set forth
below and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby amend the License Agreement, and agree
as follows:
1. AMENDMENTS.
1.1 The first sentence of Section 2.3 is hereby restated in its entirety
as follows:
Deltagen shall undertake * * * Knockout Mice Projects
according to the terms and conditions set forth in this
Agreement.
1.2 AMENDMENT TO SECTION 3.1. Section 3.1 is hereby restated in its
entirety to read as follows:
Merck shall pay to Deltagen * * * of the total estimated
cost for the * * * Knockout Mouse Projects and the * * *
Knockout Mouse Projects as set forth in Appendix A. Such
payment shall be nonrefundable and shall be credited against
the Milestones as set forth in Appendix A.
1.3 AMENDMENT TO SECTION 5.1. Section 5.1 is hereby restated in its
entirety to read as follows:
The term of this Agreement shall commence on the Effective
Date and shall remain in effect until the earlier of either
(a) termination of this Agreement pursuant to the completion
by Deltagen of all Milestones under this Agreement as amended
or (b) December 31, 2002; provided however, that all
applicable obligations of Deltagen and Merck under this
Agreement shall remain in force with respect to any Knockout
Mouse Project requested by Merck and initiated by Deltagen
which remains ongoing prior to the date set forth in
subsection (b) of this paragraph.
* * * Confidential material redacted and separately filed with the Commission.
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1.4 AMENDMENT TO SECTION 8.4. The second paragraph of Section 8.4,
beginning with the phrase "If to Deltagen" and ending with "6823" is
hereby modified as follows:
If to Deltagen:
* * *
President
Deltagen, Inc.
1003 Hamilton Avenue
Menlo Park, CA.
94025
1.5 AMENDMENT TO APPENDIX A. Appendix A is hereby restated in its
entirety as set forth in Appendix A attached hereto.
2. INITIATION PAYMENT. IN PARTIAL CONSIDERATION FOR THIS AMENDMENT, WITHIN
THIRTY (30) DAYS AFTER THE DATE OF THIS AMENDMENT, MERCK SHALL PAY TO
DELTAGEN THE SECOND INITIATION PAYMENT OF $300,000.00 SET FORTH IN
APPENDIX A OF THIS AGREEMENT AS AMENDED.
3. CONTINUING EFFECT. THIS AMENDMENT SHALL BE EFFECTIVE FOR ALL PURPOSES
AS OF THE DATE FIRST SET FORTH ABOVE. EXCEPT AS OTHERWISE EXPRESSLY
MODIFIED BY THIS AMENDMENT, THE TECHNOLOGY AGREEMENT SHALL REMAIN IN
FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS.
4. DEFINED TERMS. ALL TERMS USED, BUT NOT DEFINED, IN THIS AMENDMENT SHALL
HAVE THE RESPECTIVE MEANINGS AS SET FORTH IN THE TECHNOLOGY AGREEMENT.
[Intentionally Left Blank]
* * * Confidential material redacted and separately filed with the Commission.
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5. COUNTERPARTS. THIS AMENDMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF
WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME INSTRUMENT.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
DELTAGEN, INC.
By: /s/ Augustine Yee
----------------------------------
Its: Vice President Corporate Development
----------------------------------
MERCK & CO, INC.
By: /s/ Anthony Ford-Hutchinson
----------------------------------
Anthony Ford-Hutchinson
Its: Senior Vice President
----------------------------------
Basic Research
----------------------------------
* * * Confidential material redacted and separately filed with the Commission.
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APPENDIX A TO AMENDMENT
APPENDIX A
I. SCIENTIFIC MILESTONES AND PAYMENT SCHEDULE FOR THE FIRST * * * KNOCKOUT
MOUSE PROJECTS UNDER THIS TECHNOLOGY AGREEMENT
The following payments and milestones are with respect to the first
* * * Knockout Mouse Projects undertaken by Deltagen pursuant to the
Technology Agreement. Within * * * of the Effective Date, Deltagen is to
begin development and generation of up to * * * Knockout Mice Projects and
Merck shall pay Deltagen 30% ($255,000) of the * * * of * * * Knockout Mice
Projects (the first * * * gene knockouts are * * *).
Subsequent payments to Deltagen will be based on the achievement of the
specific Milestones for each knockout as outlined below. Merck understands and
acknowledges that production of Knockout Mouse Project involves a number of
technologically complex steps, and that the time periods for performance are
reasonable estimates only and subject to change due to technological
difficulties encountered. Deltagen shall be obligated to notify Merck of any
such technical difficulties as soon as reasonably possible after they arise, and
the parties will commence good faith discussions to resolve such technical
difficulties in a reasonable manner.
Payment by Merck for initiation of contract:
$255,000
The following payments are per Knockout Mouse Project for the first * * *
Projects:
Milestone 1 - * * * $ * * *
Milestone 2 - * * * $ * * *
Milestone 3 - * * * $ * * *
Milestone 4 - * * * $ * * *
Milestone 5 - * * * $ * * *
MILESTONE 1: * * *
Deltagen will * * * based * * *. The cost for * * * is
included in the deposit paid by Merck. Anticipated
time frame for completion will be within * * * after
receipt of necessary * * * information. In the event
of unforeseen
* * * Confidential material redacted and separately filed with the Commission.
16
<PAGE>
technical difficulties in * * * resulting from
* * *, Deltagen (upon consultation with
Merck) will * * *. The reasonable cost for this
* * * will be determined on a case-by-case basis,
after good faith negotiations between the
parties * * *.
MILESTONE 2: * * *
Deltagen will * * *. Deltagen will * * * a maximum
of * * *. Deltagen will receive * * * upon the
identification of a * * * or Deltagen's * * * of
* * *. If * * * in the * * * clones, Deltagen will
first * * * or alternatively, * * * (after
consultation with, and written agreement by, Merck).
The cost of a * * * will not exceed * * *. Cost for
* * * will be * * * per * * * colonies * * *.
Anticipated time for completion of * * * will be
* * * from receipt of * * *. Confirmation of * * *
will be obtained * * *. Merck will also receive
* * * information in order to confirm * * *.
MILESTONE 3: * * *
Deltagen will transfer up to * * *. Upon the * * *
from each * * *, Deltagen will receive a payment of
* * * per * * *. Anticipated time frame for
completion will be within * * * from receipt of
* * *. Deltagen will confirm the * * *.
MILESTONE 4: * * *
Deltagen will * * * animals for * * *. For production
of ** * mice with the desired * * *, Deltagen will
receive * * * per * * *. Anticipated time frame will
be within * * * from receipt of the * * *. The * * *
of the * * * will be confirmed * * *.
MILESTONE 5: * * *
Deltagen will perform the following analysis on up to
* * * gene Knockout Mice that are generated * * *.
* * * mice will * * *. * * * mice will be * * *
animals. In cases where the gene knockout produces
a * * *, Deltagen will make reasonable efforts to
determine * * *. Each * * * will be inspected for
* * *. * * * will be monitored * * *. At * * * mice
from * * * from each knockout line will be * * * with
that will include the following * * *. * * * will be
* * * and Deltagen will prepare a written report of
all findings. Deltagen will also * * * to Merck upon
request. In addition to the above analysis, Deltagen
will provide * * *. * * * will * * *. * * * will also
be * * *.
Upon completion of * * * Knockout Mouse Project,
Deltagen will receive * * * per * * *. Anticipated
time frame is within * * * from receipt of * * *.
All mice in the Deltagen animal facility will be
tested routinely for * * *. Results will be provided
to Merck on a * * * basis.
II. Scientific Milestones and Payment Schedule for the Second * * *
Knockout Mouse Project under this Technology Agreement
* * * Confidential material redacted and separately filed with the Commission.
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<PAGE>
The following payments and milestones are with respect to the Second
* * * Knockout Mouse Projects undertaken by Deltagen pursuant to the
Technology Agreement. In partial consideration for Deltagen's agreement to
undertake the Second * * * Knockout Mouse Projects under the Technology
Agreement, within * * * of the date of this Amendment Merck shall pay to
Deltgen an initiation payment (the "Second Initiation Payment") of 30%
($300,000) of the total aggregate amount of such Second * * * Knockout Mice
Projects (the second * * *gene knockouts are * * *).
Subsequent payments to Deltagen will be based on the achievement of the
specific Milestones for each knockout as outlined below. Merck understands and
acknowledges that production of each Knockout Mouse Project involves a number of
technologically complex steps, and that the time periods for performance are
reasonable estimates only and subject to change due to technological
difficulties as soon as reasonably possible after they arise, and the parties
will commence good faith discussions to resolve such technical difficulties in a
reasonable manner.
Second Initiation payment by Merck: $300,000
The following payments are per Knockout Mouse Project for the Second * * *
Projects:
Milestone 1 - * * * $ * * *
Milestone 2 - * * * $ * * *
Milestone 3 - * * * $ * * *
Milestone 4 - * * * $ * * *
Milestone 5 - * * * $ * * *
MILESTONE 1: * * * Deltagen will * * * based on * * *. The cost
for * * * is included in the deposit paid by Merck.
Anticipated time frame for completion will be
within * * * after receipt of necessary * * *
information. In the event of unforeseen technical
difficulties in * * * resulting from * * *,
Deltagen (upon consultation with Merck) will * * *.
The reasonable cost for this * * * will be
determined on a case-by-case basis, after good
faith negotiations between the parties * * *.
MILESTONE 2: * * *
Deltagen will * * *. Deltagen will * * * a maximum of
* * *. Deltagen will
* * * Confidential material redacted and separately filed with the Commission.
18
<PAGE>
receive * * *upon the identification of a * * * or
Deltagen's * * *. If * * * in the first * * *,
Deltagen will first * * * or alternatively, * * *
(after consultation with, and written agreement by,
Merck). The cost of a * * * will not exceed * * *.
Cost for * * *will be * * *per * * *. Anticipated
time for completion of * * *will be * * *from receipt
of * * *. Confirmation of * * * will be obtained
* * *. Merck will also receive * * * in order to
confirm * * *.
MILESTONE 3: * * *
Deltagen will transfer up to * * *. Upon the * * *
from each * * *, Deltagen will receive a payment of
* * * per * * *. Anticipated time frame for completion
will be within * * * from receipt of * * *. Deltagen
will confirm the * * *.
MILESTONE 4: * * *
Deltagen will * * * animals for * * *. For production
of * * * mice with the desired * * *, Deltagen will
receive * * * per * * *. Anticipated time frame will
be within * * * from receipt of the * * *. The * * *
of the * * * will be confirmed * * *.
MILESTONE 5: * * *
Deltagen will perform the following analysis on up to
* * * gene Knockout Mice that are generated * * *will
be * * * mice will be * * * animals. In cases where
the gene knockout produces a * * *, Deltagen will make
reasonable efforts to determine * * *. Each * * * will
be inspected for * * * will be monitored * * *. At
* * * mice * * * from each knockout line will be * * *
with that will include the following * * * will be * *
* and Deltagen will prepare a written report of all
findings. Deltagen will also * * * to Merck upon
request. In addition to the above analysis, Deltagen
will provide * * * will include * * * will also be
* * *.
Upon completion of * * * Knockout * * * per
Knockout Mouse Project. Anticipated time frame is
within * * * from receipt of * * *.
All mice in the Deltagen animal facility will be
tested routinely for * * *. Results will be provided
to Merck on a * * * basis.
* * * Confidential material redacted and separately filed with the Commission.
19
