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EXHIBIT 10.2
Confidential materials omitted and filed
separately with the Securities and
Exchange Commission. Asterisks denote
omissions.
COLLABORATION AND LICENSE AGREEMENT
THIS
COLLABORATION AND LICENSE AGREEMENT (this "Agreement") is dated as
of
July 15, 2005 (the "Effective Date") and is
made by and among LEXICON GENETICS
INCORPORATED, a Delaware corporation
("Lexicon"), THE TEXAS A&M UNIVERSITY
SYSTEM ("TAMUS") for the benefit of TEXAS
A&M UNIVERSITY ("TAMU") and the TEXAS
A&M HEALTH SCIENCE CENTER ("TAMHSC"),
and the TEXAS INSTITUTE FOR GENOMIC
MEDICINE, a Texas non-profit corporation
("TIGM"). Lexicon, TAMUS and TIGM are
sometimes referred to herein individually
as a "party" and collectively as the
"parties."
RECITALS
WHEREAS,
Lexicon has technology for and expertise in the generation of
mouse embryonic stem cell clones containing
gene trap mutations that can be used
in the production of knockout mice;
WHEREAS,
Lexicon and TAMUS are interested in collaborating in the
start-up
and initial operations of TIGM, including
the endowment of TIGM with a library
of such mouse embryonic stem cell clones
containing gene trap mutations;
WHEREAS,
the State of Texas, acting by and through the Office of the
Governor, Economic Development and Tourism
(the "State"), has committed to
provide fifty million dollars ($50,000,000)
in funding for the foregoing under
an Economic Development Agreement, dated as
of the Effective Date, among the
State, Lexicon and TAMUS (the "Economic
Development Agreement");
NOW,
THEREFORE, in consideration of the premises and of the
covenants
herein contained, the parties hereto
mutually agree as follows:
ARTICLE 1. DEFINITIONS
For
purposes of this Agreement, the terms defined in this Article 1
shall
have the respective meanings specified
below:
1.1
"Academic Institution" means any university or non-profit
entity.
1.2
"Affiliate" means any corporation, company, partnership, joint
venture
or firm that controls, is controlled by or
is under common control with a party
to this Agreement. For purposes hereof,
"control" means (a) in the case of a
corporate entity, direct or indirect
ownership of more than fifty percent (50%)
of the stock or shares entitled to vote for
the election of directors; and (b)
in the case of a non-corporate entity,
direct or indirect ownership of more than
fifty percent (50%) of the equity interests
with the power to direct the
management and policies of such
non-corporate entity. For clarity, TIGM, as a
non-profit corporation without stock,
shares or equity interests, shall not be
deemed an Affiliate of Lexicon or
TAMUS.
1.3
"Bioinformatics Software" means the software described in Exhibit
1.3
for the management and analysis of data
relating to the OmniBank II Library and
the production, genotyping and phenotypic
analysis of knockout mice.
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1.4 "Commercial
Entity" means any person or entity other than an Academic
Institution or Government Agency.
1.5
"Confidential Information" means any proprietary information and
data
received by a party or its Affiliates (the
"Receiving Party") from the other
party or its Affiliates (the "Disclosing
Party") in connection with this
Agreement. Notwithstanding the foregoing,
Confidential Information shall not
include any part of such information or
data that:
(a) is or becomes part of the public domain other than by
unauthorized acts of the Receiving Party or its Affiliates;
(b) can be shown by written documents to have been already in
the possession of the Receiving Party or its Affiliates prior
to
disclosure under this Agreement, provided such Confidential
Information was not obtained directly or indirectly from the
Disclosing Party under an obligation of confidentiality;
(c) can be shown by written documents to have been disclosed
to the Receiving Party or its Affiliates by a Third Party,
provided
such Confidential Information was not obtained directly or
indirectly from the Disclosing Party under an obligation of
confidentiality; or
(d) can be shown by written documents to have been
independently developed by the Receiving Party or its
Affiliates
without use of, or access to, Confidential Information of the
Disclosing Party.
Specific Confidential Information of a
Disclosing Party shall not be deemed to
come under the foregoing exceptions merely
because it is embraced by more
general information that is or becomes part
of the public domain, or is known
by, disclosed to or independently developed
by the Receiving Party.
1.6
"Control" or "Controlled" means, with respect to any (a)
material,
document, item of information, method, data
or other know-how or (b) Patent
Right or other intellectual property right,
the possession (whether by ownership
or license, other than by a license granted
pursuant to this Agreement) by a
party or its Affiliates of the ability to
grant to the other party access,
ownership, a license or a sublicense as
provided herein under such item or right
without violating the terms of any
agreement or other arrangement with any third
party as of the time such party would first
be required hereunder to grant the
other party such access, ownership, license
or sublicense.
1.7
"Cover," "Covered" or "Covering" means, with respect to a
Patent
Right, that, but for rights granted to a
person or entity under such Patent
Right, the practice by such person or
entity of an invention claimed in such
Patent Right would infringe a Valid Claim
included in such Patent Right, or in
the case of a Patent Right that is a patent
application, would infringe a Valid
Claim in such patent application if it were
to issue as a patent.
1.8
"Cre-Lox Patents" means the United States and foreign patents
listed
in Exhibit 1.8, and any continuations,
continuations-in-part, divisionals,
reissues, reexaminations or extensions of
any of the foregoing. The terms "Cre"
and "lox" (also referred to as "loxP") have
the meanings as described and
embodied by the Cre-Lox Patents.
1.9
"Development Plan" means the plan described in Exhibit 1.9 for
the
generation and delivery to TIGM of the
OmniBank II Library.
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1.10
"Diligent Efforts" means the carrying out of obligations or tasks
by
a party (or, as applicable, its Affiliates)
in a sustained manner using good
faith commercially reasonable and diligent
efforts, which efforts shall be
consistent with the exercise of prudent
scientific and business judgment in
accordance with the efforts such party
devotes to products or research,
development or marketing projects of
similar scientific and commercial
potential. Diligent Efforts requires that
the party or its applicable
Affiliates: (a) promptly assign
responsibility for such obligations to specific
employees who are held accountable for
progress and monitor such progress on an
on-going basis, (b) set and consistently
seek to achieve specific and meaningful
objectives for carrying out such
obligations, and (c) consistently make and
implement decisions and allocate resources
designed to advance progress with
respect to such objectives.
1.11
"Disclosing Party" has the meaning specified in Section 1.5
hereof.
1.12
"Economic Development Agreement" has the meaning specified in
the
recitals of this Agreement.
1.13
"Effective Date" means the date specified in the initial paragraph
of
this Agreement.
1.14
"Event of Default" means an event described in Section 9.3.1
hereof.
1.15
"Existing OmniBank(R) Library" means Lexicon's library of mouse
embryonic stem cell clones with Selected
Mutations in existence as of the
Effective Date.
1.16
"Facilities" means the facilities funded under the Economic
Development Agreement to house TIGM and the
OmniBank II Library at TAMHSC's
Institute of Biosciences and Technology in
Houston, Texas and at TAMU's Research
Park in College Station, Texas, as more
fully described in Exhibit 1.16.
1.17 "Gene
Trapping Patents" means the United States and foreign patents
listed in Exhibit 1.17.
1.18
"Government Agency" means any agency or unit of any federal,
national, state, provincial, county, city
or other government, domestic or
foreign.
1.19
"Joint Management Committee" has the meaning specified in
Section
2.1.2 of this Agreement.
1.20
"Laws" means all laws, statutes, rules, regulations, ordinances
and
other pronouncements having the effect of
law of any federal, national, state,
provincial, county, city or other political
subdivision, domestic or foreign.
1.21
"Lexicon" has the meaning specified in the initial paragraph of
this
Agreement.
1.22
"Library Technology" means any inventions, information,
methods,
know-how, trade secrets or data, including,
without limitation, the inventions
Covered by the Gene Trapping Patents, that
(a) are Controlled by Lexicon and (b)
are utilized in the generation of the
OmniBank II Library or Mutant Mice, but
only to the extent so utilized; provided
that Library Technology excludes the
inventions Covered by the Cre-Lox
Patents.
1.23 "Lox
Mice" has the meaning specified in Section 3.1.1.2 of this
Agreement.
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1.24
"Materials" means Mutant Mice, Progeny and cells, tissues and
other
biological materials derived from any of
the foregoing; provided that Materials
shall not include cells, tissues or other
biological materials that do not
contain a Selected Mutation.
1.25
"Materials Access Agreement" has the meaning specified in Section
3.2
of this Agreement.
1.26
"Mutant Mouse" means mouse cell or mouse containing a Selected
Mutation that is delivered to TIGM under
this Agreement, whether as part of the
OmniBank II Library or from the Existing
OmniBank Library. A "line of Mutant
Mice" means Mutant Mice having the same
Selected Mutation.
1.27
"[**]" shall mean all payments and other consideration received
by
TIGM and its Affiliates from Sublicensed
Recipients [**] for the generation or
development of, or access to or licensing
of, Materials (including, without
limitation, for the delivery of Materials
or the grant of a license under any
intellectual property rights relating
thereto), less any (a) freight, insurance
and other transportation costs, (b) taxes
(excluding federal, state or local
taxes based on income), duties or other
governmental charges imposed on the
production, sale, importation, exportation
or use, in each case that are
actually paid by TIGM and its Affiliates
with respect to the delivery of such
Materials, (c) trade, quantity and cash
discounts, (d) refunds, rebates,
chargebacks, retroactive price adjustments
and billing errors, and (e)
allowances or credits due to rejections or
returns.
1.28
"OmniBank II Library" has the meaning specified in Section
2.2.1.
1.29
"Patent Rights" means all existing patents and patent
applications
and all patent applications hereafter filed
and patents hereafter issued,
including, without limitation, any
continuations, continuations-in-part,
divisions, provisionals or any substitute
applications, any patent issued with
respect to any such patent applications,
any reissue, reexamination, renewal or
extension (including any supplemental
protection certificate) of any such
patent, and any confirmation patent or
registration patent or patent of addition
based on any such patent, and all foreign
counterparts of any of the foregoing.
1.30
"Progeny" means mice, including successive generations thereof,
that
are produced, developed or derived by or on
behalf of TIGM or Sublicensed
Recipients directly or indirectly from a
Mutant Mouse progenitor, including,
without limitation, by breeding or
rederivation; provided that Progeny shall not
include mice that do not contain a Selected
Mutation.
1.31
"Receiving Party" has the meaning specified in Section 1.5
hereof.
1.32
"Selected Mutation" means a specific mutation in a particular
portion
of a gene originally introduced by Lexicon
in a mouse embryonic stem cell
through the use of gene trapping
technology.
1.33
"State" has the meaning specified in the recitals of this
Agreement.
1.34
"Sublicensed Recipient" means any Academic Institution,
Commercial
Entity or Government Agency to which TIGM
sells or licenses Materials under this
Agreement.
1.35
"TAMHSC" has the meaning specified in the initial paragraph of
this
Agreement.
1.36
"TAMU" has the meaning specified in the initial paragraph of
this
Agreement.
4
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1.37
"TAMUS" has the meaning specified in the initial paragraph of
this
Agreement.
1.38
"TIGM" has the meaning specified in the initial paragraph of
this
Agreement.
1.39
"Valid Claim" means either (a) a claim of an issued and
unexpired
patent which has not been held permanently
revoked, unenforceable or invalid by
a decision of a court or other governmental
agency of competent jurisdiction,
unappealable or unappealed within the time
allowed for appeal, or (b) a claim of
a pending patent application that has not
been pending for more than seven (7)
years and that has not been abandoned or
finally rejected without the
possibility of appeal or refiling.
ARTICLE 2. COLLABORATION
2.1
General.
2.1.1 Overview. The parties intend to collaborate in the
start-up
and
initial operations of TIGM, as set forth in this Article 2. In
support
of the
foregoing and as set forth in the present Agreement, (a)
Lexicon
will
develop and deliver to TIGM the OmniBank II Library, install
and
support
the Bioinformatics Software, and provide training to TIGM's
staff
in the use
of the OmniBank II Library and the production, genotyping and
phenotyping of knockout mice; (b) TAMUS will construct and make
available
to TIGM
the Facilities and will furnish to TIGM the operating funds
and/or
in-kind
services needed to fund TIGM's operations as provided herein
until
TIGM has
established sufficient revenue to be self-sufficient unless
earlier
dissolved; and (c) TIGM will use Diligent Efforts to obtain
research
grants and contracts, expand its membership and promote,
through
the
development of its research operations and collaborations with
third
parties,
the expansion of the biotechnology and pharmaceutical
industries
and
associated employment in the state of Texas; in each case, subject
to
and in
accordance with the terms of this Agreement.
2.1.2 Collaboration Management. Lexicon, TAMUS and TIGM shall
establish
a committee whose members shall be responsible for managing
their
respective efforts under this Agreement (the "Joint Management
Committee"), including but not limited to the coordination (as
between the
parties)
and management of the following matters:
(a) planning and implementation of the parties' efforts under
this
Agreement;
and
(b) timely transfer of relevant information and progress reports
in
connection
with the collaboration contemplated by this Agreement.
Lexicon, TAMUS and TIGM shall each appoint one member of its
senior
management
and one member of its senior technical staff to the Joint
Management
Committee. The members of the Joint Management Committee
initially
designated by the parties are set forth in Exhibit 2.1.2. In
addition,
subject to the approval of the other parties, which approval
shall not
be unreasonably withheld, Lexicon, TAMUS and TIGM shall each
assign a
project coordinator (a) to act as a conduit for timely transfer
of
relevant information and progress reports in connection with
the
collaboration and (b) to be responsible for managing its
day-to-day
efforts
under the collaboration. Subject to the approval of the other
parties,
which approval shall not be unreasonably withheld, each party
shall have
the right to replace its representatives on the Joint
Management
Committee and its project coordinator by giving written notice
to the
other parties.
2.1.3 Resources. The parties agree to commit to the
collaboration
the
personnel and resources necessary to meet their respective
responsibilities set forth in this Agreement.
5
<PAGE>
2.1.4 Reports. Each party shall submit quarterly reports to the
Joint
Management Committee detailing its activities under this
Agreement.
2.1.5 No Authority to Direct Actions of the Other Party.
Although
the
parties acknowledge and agree that the coordination of their
respective
efforts under this Agreement is essential, each party shall
retain the
authority to direct, and the responsibility for, its own
efforts
under this Agreement. Nothing in this Article 2 shall be deemed
to
grant the
Joint Management Committee the authority to direct the actions
of
Lexicon, TAMUS or TIGM or to modify the rights and obligations of
the
parties
under this Agreement.
2.1.6 Further
Discussions. With respect to any dispute among the
parties to
the collaboration, the parties will periodically consult with
one
another regarding the collaboration and discuss in good faith
whether
modifications or amendments to the Economic Development
Agreement,
Development Plan or this Agreement are advisable in light of the
purposes
of the
collaboration contemplated hereby and the respective interests
of
the
parties. No such modification or amendment shall be effective
unless
agreed to
by each party, in its sole discretion, in accordance with
Section
10.7.
2.2
Lexicon Obligations
2.2.1 Development and Delivery of OmniBank II Library and
Mutant
Mice.
2.2.1.1 Development of OmniBank II Library. Subject to the terms
of
this
Agreement, Lexicon will generate and deliver to TIGM two (2)
complete
copies of
a library consisting of three hundred fifty thousand (350,000)
mouse
embryonic stem cell clones with Selected Mutations, each
identified
by DNA
sequence of its genomic integration site (the "OmniBank II
Library").
Subject to the terms of this Agreement, Lexicon will use
Diligent
Efforts to generate and deliver the OmniBank II Library in
accordance
with the schedule set forth in the Development Plan. Lexicon
will not
purposefully exclude clones with Selected Mutations in any
particular
gene or genes from the OmniBank II Library.
2.2.1.2 Requests for Clones from Existing OmniBank Library.
Subject
to the
terms of this Agreement, until the generation and delivery of
the
OmniBank
II Library has been completed, TIGM may request mouse embryonic
stem cell
clones with Selected Mutations from the Existing OmniBank
Library,
and shall be provided with reasonable access to the database
and
search
tools of Lexicon as may be necessary for TIGM to make such
requests.
Promptly following any such request, Lexicon shall notify TIGM
of its
acceptance or rejection thereof; provided that Lexicon may
reject
such
requests only in the event that it has obligations under any
collaboration or license agreement with a third party or an active
bona
fide
internal discovery program with respect to knockout mice with a
mutation
in the same gene in which the requested embryonic stem cell
clone
has a
Selected Mutation, in which concrete, verifiable laboratory
studies
have been
initiated by Lexicon prior to the time of such request. In the
event of
its acceptance of such a request, Lexicon shall use Diligent
Efforts to
process mouse embryonic stem cell clones with a Selected
Mutation
in the requested gene and, provided that such clones pass
Lexicon's
quality control tests, to deliver a vial of such clones to
TIGM.
2.2.1.3 Deliveries. Beginning no earlier than six (6) months
following
the Effective Date, Lexicon shall deliver notices to TIGM of
the
availability for shipment to
6
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TIGM of
embryonic stem cell clones comprising part of the OmniBank II
Library or
requested by TIGM from the Existing OmniBank Library. Promptly
following
its receipt of such notice, TIGM shall notify Lexicon
confirming
that it is
prepared to accept such shipment. Lexicon shall be responsible
for making
shipping arrangements for all such materials; provided that
TIGM shall
be responsible for (a) paying all shipment and delivery charges
in
connection therewith and (b) obtaining, if desired, and paying for
any
insurance
relating to such shipment. TIGM shall also be responsible for
complying
with all customs, regulations, veterinary handling procedures
and
protocols, and obtaining any and all permits, forms or
permissions
that may
be required for TIGM to accept such shipments. All such
materials
will be
shipped F.O.B. Lexicon. If TIGM fails to provide confirmation
that
it is
prepared to accept a shipment within thirty (30) days after
Lexicon's
notice that such materials are available for shipment, TIGM
shall pay
Lexicon a storage and maintenance charge of Five Thousand
Dollars
(U.S.$5,000) with respect to such shipment for each month or
partial
month thereafter until Lexicon receives such written
confirmation.
If TIGM
fails to provide such written confirmation within three (3)
months
after
Lexicon's delivery of such notice to TIGM, Lexicon shall be
deemed
to have
delivered such materials and satisfied all of its obligations
with
respect
thereto, and may dispose of such materials at its discretion.
2.2.1.4 Title to Physical Materials. As between the State, TAMUS
and
TIGM,
title to the physical materials comprising the OmniBank II
Library
will be
held in the name of TAMUS, and TAMUS will provide TIGM with
access
to the
OmniBank II Library pursuant to the arrangements described
below.
2.2.1.5 Restrictions on Creation of Competitive Library. For a
period
ending on the earliest to occur of (a) ten (10) years from the
Effective
Date, (b) the date on which Lexicon and TAMUS have accumulated
funding
offsets and surplus job credits sufficient to offset the full
amount of
the potential repayment penalty liability for shortfalls in
achieving
their collective job target commitments to the State under the
Economic
Development Agreement, and (c) the date that TIGM commences
dissolution proceedings, but in no event earlier than the later of
(i)
five (5)
years from the Effective Date and (ii) two (2) years following
the
satisfaction or earlier termination of Lexicon's obligations to
generate
and deliver to TIGM the OmniBank II Library, Lexicon will not
make or
commence making for a third party a new library of mouse
embryonic
stem cell
clones with Selected Mutations under a license that would
permit
such party
to use and sell such library in direct competition with the
OmniBank
II Library, or grant to a third party the right under the Gene
Trapping
Patents and related Library Technology to make such a library
for
such
purposes. For purposes of the foregoing, the duplication of
fifty
percent
(50%) or more of the clones represented in the Existing
OmniBank
Library
for delivery to a third party under a license that would permit
such party
to use and sell such library in direct competition with the
OmniBank
II Library shall be deemed to constitute the making of a new
library
for such third party. For clarity, except as specifically
provided
in the
foregoing sentence, no restrictions whatsoever will be imposed
with
respect to
the Existing OmniBank Library.
2.2.1.6 Technical Difficulties. TIGM and TAMUS recognize that
the
generation
of mouse embryonic stem cell clones with Selected Mutations
involves a
number of technologically complex steps and that technical
obstacles
may, on occasion, delay or, in the case of clones requested
from
the
Existing OmniBank Library, even prevent such clones from being
made
available
for shipment to TIGM. Lexicon shall promptly notify TIGM of any
such
technical obstacle and its estimate of the delay, if any, in
the
timelines
7
<PAGE>
contemplated by the Development Plan and this Agreement for the
delivery
of mouse
embryonic stem cell clones with Selected Mutations hereunder.
Lexicon
shall not be held liable or responsible to TIGM or TAMUS nor be
deemed to
have defaulted under or breached this Agreement for any such
delay;
provided, however, that (a) Lexicon shall use Diligent Efforts
to
limit any
such delay and overcome the relevant technical obstacle as
promptly
as possible and (b), subject to Section 10.1, such delay does
not
extend the
completion of the OmniBank II Library beyond the third
anniversary of the Effective Date.
2.2.1.7 Third Party Rights. Lexicon shall not be obligated to
develop or
deliver a Mutant Mouse where Lexicon reasonably believes, with
the advice
of its counsel and after consultation with TIGM, that such
action would
infringe any valid intellectual property or contractual
rights of
a third party.
2.2.2
Installation and Support of Bioinformatics Software.
2.2.2.1 Installation. Lexicon shall deliver the Bioinformatics
Software
to TIGM promptly following the Effective Date. Lexicon will
provide
services necessary to install the Bioinformatics Software on
TIGM's
computer systems at each of the two (2) locations housing a copy
of
the
OmniBank II Library. TIGM shall be responsible for obtaining
all
necessary
hardware and third party-software necessary to install and
operate
the Bioinformatics Software.
2.2.2.2 Support Services. Promptly following the installation of
the
Bioinformatics Software at TIGM, Lexicon shall provide initial
training
for TIGM's
staff, at each of the two (2) locations housing a copy of the
OmniBank
II Library, in the operation and use of the Bioinformatics
Software.
During the period ending one year after the satisfaction or
earlier
termination of Lexicon's obligations to generate and deliver to
TIGM the
OmniBank II Library, Lexicon shall provide, at no additional
charge to
TIGM, (a) such services as may be necessary to load the
databases
relating to the Bioinformatics Software with the gene sequence
data
identifying clones in the OmniBank II Library, (b) reasonable
training
at each of the two (2) locations housing a copy of the OmniBank
II Library
on the use of the Bioinformatics Software and the database
containing
data relating to the OmniBank II Library and (c) reasonable
telephone
support of the Bioinformatics Software during business hours.
For a
period of five years from the Effective Date, Lexicon shall
provide,
at no
additional charge to TIGM, all error corrections to the
Bioinformatics Software that Lexicon makes in the course of its
business.
2.2.2.3 Source Code Escrow Arrangements. At TAMUS or TIGM's
request,
Lexicon
will make arrangements reasonably satisfactory to TAMUS and
TIGM
for an
escrow of the source code, programmers notes and other
materials
that TIGM
can access and use in the event that Lexicon becomes unable to
perform
the foregoing obligations.
2.2.3
Provision of Training in the Production of Knockout Mice.
Promptly
following the Effective Date, Lexicon shall
provide reasonable training for
TIGM's staff, at each of the two (2)
locations housing a copy of the OmniBank II
Library, in the production, genotyping and
phenotyping of knockout mice.
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2.3 TAMUS
Obligations
2.3.1 Facilities. TAMUS shall make available to TIGM, on
commercially reasonable terms, adequate facilities in Houston and
College
Station,
Texas to house the OmniBank II Library and conduct its
operations. In connection with the foregoing obligation, TAMUS
shall use
Diligent
Efforts to complete the Facilities and lease the Facilities to
TIGM on
commercially reasonable terms, taking into account, in
establishing such terms, the funding provided by the State to TAMUS
under
the
Economic Development Agreement for TIGM's benefit.
2.3.2 Access to OmniBank II Library. TAMUS shall furnish TIGM
with
the use of
the OmniBank II Library, and unless and until TIGM commences
dissolution proceedings, TAMUS shall access the OmniBank Library
only as a
Sublicensed Recipient through TIGM.
2.3.3 Funding of TIGM Operations. TAMUS will furnish to TIGM
the
operating
funds and/or in-kind services needed to fund TIGM's operations
until it
has established sufficient revenue to be self-sufficient, but
in
no event
shall TAMUS be obligated to furnish more than three million
dollars
($3,000,000) in net cumulative funds or in-kind services.
2.4 TIGM
Obligations
2.4.1 Operations. TIGM shall use Diligent Efforts to (a) obtain
research
grants and contracts, on its own and in collaboration with its
members;
(b) expand its membership, particularly with respect to
Academic
Institutions within the State of Texas; and (c) promote, through
the
development of its research operations and collaborations with
third
parties,
the expansion of the biotechnology and pharmaceutical
industries
and
associated employment in the State of Texas.
2.4.2 Reporting. Within ten (10) days after each calendar
quarter,
TIGM shall furnish to
Lexicon and TAMUS a written quarterly report
showing,
in reasonable detail, funds received during the reporting
period
(and, to
the extent not previously reported, during previous reporting
periods)
by TIGM and, to the extent related to research using materials
obtained
from TIGM, by TIGM members directly or indirectly from funding
sources
other than the State, including, without limitation, all such
funds
received under grants and contracts from the National Institutes
of
Health,
other federal government agencies, research institutes,
foundations, and companies in the biotechnology and
pharmaceutical
industries, together with evidence thereof (e.g., in the form of
grant and
contract documents or third party
reports) that is sufficient to satisfy
the
standards of the Economic Development Agreement for purposes of
establishing entitlement to funding offsets. Within ten (10) days
after
each
calendar year, TIGM shall furnish to Lexicon and TAMUS a
written
annual
report showing, in reasonable detail, "Employment Positions"
(as
defined in
the Economic Development Agreement) for the year attributable
to (a)
TIGM, (b) TIGM members, (c) employers in the biotechnology or
pharmaceutical industries, and (d) other positions for which TIGM
or TIGM
members
are significantly responsible for creating through efforts
specifically targeted at attracting or creating biotechnology
and
pharmaceutical industry-related positions to Texas, in each case
without
duplication, together with evidence thereof that is sufficient to
satisfy
the
standards of the Economic Development Agreement for such
purposes.
TIGM shall
keep complete and accurate records in sufficient detail to
properly
reflect its activities under this Agreement and to enable the
preparation of the foregoing reports and supporting documentation,
and
shall
require its members to provide it with periodic written reports
and
supporting
information as may be reasonably necessary therefor. Each such
report
shall include a certification by TIGM as to the accuracy of the
information contained therein.
9
<PAGE>
2.4.3 Clawback Payment Obligation. TIGM shall pay TAMUS any
obligation
it may have under its job target commitment guarantee prior to
the due
date for TAMUS's payment to the State under the Economic
Development Agreement.
2.5
Obtaining of TIGM Research Grants and Contracts. To effect the
goals
of the collaboration contemplated by this
Agreement, Lexicon and TAMUS shall
provide reasonable assistance to TIGM in
its efforts to obtain research grants
and contracts involving use of the OmniBank
II Library, including, in the case
of Lexicon, providing (a) scientific and
technical information to support the
submission of any grant or contract request
and (b) technical support in the
preparation of grant or contract requests.
In furtherance of the foregoing,
Lexicon and TAMUS will notify TIGM of
opportunities for obtaining research
grants and contacts from Government
Agencies that either such party, in its
respective discretion, deems suitable for
application by TIGM or for joint
application by TIGM, Lexicon and/or TAMUS.
In addition, TIGM may request that
Lexicon and/or TAMUS participate in joint
applications with TIGM for research
grants and contracts from Government
Agencies in the event TIGM believes that
such participation will improve the award
potential for any such grant or
contract; provided that neither Lexicon nor
TAMUS shall have any obligation to
participate in such application. To the
extent TIGM, Lexicon and/or TAMUS elect
to participate in any such joint
application, each such participating party will
provide reasonable cooperation to, and will
coordinate efforts with, the other
participating party or parties.
ARTICLE 3. GRANTS OF RIGHTS
3.1 Grants
of Licenses.
3.1.1 OmniBank II
Library and Mutant Mice.
3.1.1.1 Library Technology. Subject to the terms of this
Agreement, Lexicon hereby grants to TIGM a worldwide,
non-exclusive
right and license (without any right to grant sublicenses except
to
Sublicensed Recipients under the terms and subject to the
conditions
set forth in Section 3.2) under Lexicon's rights in the Library
Technology, including, without limitation, any Patent Rights
Controlled by Lexicon Covering the foregoing, (a) to use the
OmniBank
II Library and Mutant Mice obtained from the Existing OmniBank
