EX-10.29 13 ex10-29.txt EXHIBIT 10.29 1 EXHIBIT 10.29 CONFIDENTIAL ***PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. THE COMPLETE EXHIBIT, INCLUDING THE PORTIONS FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. COLLABORATION AGREEMENT THIS AGREEMENT is made May 14, 1999, ("Effective Date") by and between Xgene Corporation having a principal place of business at 863A Mitten Road, Burlingame, California 94010 (hereinafter "Xgene") and Genencor International, Inc., a Delaware company having a principal place of business at 4 Cambridge Place, 1870 South Winton Road, Rochester, New York 14618 (hereinafter "GCI") (collectively the "Parties"). WHEREAS, GCI has developed expertise, knowledge and experience related to, among others, specialty biochemicals for use in personal care and skin therapies, including their production, purification, manufacture and application; WHEREAS, Xgene has developed expertise, knowledge and experience related to the development of artificial skin and assays related thereto; WHEREAS, the Parties have entered into discussions related to the development of artificial skin assays by Xgene for use by GCI in developing products for personal care and skin therapy treatments, including products having low allergenicity; NOW THEREFORE, the Parties agree as follows: I. DEFINITIONS 1.1 The "Research" shall mean the work performed under this Agreement by one or more of the Parties as essentially detailed in Appendix A. 1.2 "Background Technology" shall mean any technology, data, results, biological materials, processes, reports, or other information owned or controlled by either Party as of the Effective Date. 1.3 "Background Patent Rights" shall mean any patent or patent application, foreign and domestic, including any and all divisions, continuations, continuations-in-part, reissues, re-examination applications, extensions, supplementary protection certificates, certificates of addition, inventor's certificates, including international counterparts thereof owned and/or controlled as of the Effective Date by either Party. 1.4 "Inventions" shall mean any technology, data, discoveries, results, biological materials, processes, reports, or other information, whether patentable or not, which result 2 directly and substantially from the Research as described in Appendix A during the Term of this Agreement. 1.5 "Term" shall be 12 months or the achievement of Milestone 2, whichever occurs earlier. In the event that an Elected Assay is incorporated into the Research, the Term shall be extended for a mutually agreed upon time period to allow for completion of the development of the Elected Assay. 1.6 "Xgene Core Business" shall mean the *** II. RESEARCH PROGRAM AND PAYMENT 2.1 Xgene shall commence performance of the Research promptly upon the Effective Date and shall proceed as provided for in Appendix A. Xgene agrees to commit reasonable facilities and resources to its allocated employees as is reasonably necessary to carry out the Research. The Research may be redirected in accordance with modifications and extensions only to the extent that Xgene and GCI mutually agree upon in writing. 2.2 Payment for the Research shall be as follows: (a) GCI shall pay to Xgene *** within *** of the Effective Date. (b) If, within *** of the Effective Date, Xgene has developed an *** assay useful for the development and testing of products having activity against human papilloma virus (Milestone 1), GCI shall pay to Xgene ***. Payment under this subsection shall be contingent upon receipt by GCI of a written report from Xgene conclusively showing that Milestone 1 has been met and GCI's agreement that the conclusions made in such written report are reasonable in light of the results of the Research. Payment under this subsection shall be due within *** of such agreement by GCI. (c) If, within *** of the Effective Date, Xgene has developed an *** assay useful for the development and testing of products having activity against human papilloma virus (Milestone 2), GCI shall pay to Xgene ***. Payment under this subsection shall be contingent upon receipt by GCI of a written final report from Xgene conclusively showing that Milestone 2 has been met and GCI's agreement that the conclusions made in such written report are reasonable in light of the results of the Research. Payment under this subsection shall be due within *** of such agreement by GCI. 2.3 Xgene agrees that it will not perform research and/or development or enter into any commercial agreement with any third party during the Term of this Agreement which relates to the subject matter of (i) the Research or (ii) any Elected Assay under Article 3.2(b) hereto without GCI's written consent; provided that Xgene may perform research and/or development or enter into a commercial agreement with any third party which relates to *** and the effect of *** properties of skin. 2 3 2.4 Xgene agrees to perform its tasks under this agreement in accordance with standard and accepted scientific standards for such research. Xgene agrees to submit monthly reports, in electronic and paper copy, detailing progress relating to their responsibilities pursuant to the Research and any pertinent findings, results, conclusions or other information resulting from the Research to GCI. Xgene shall provide to GCI a final report summarizing the research performed and providing conclusions and description of the developed assays which derive from the Research within sixty (60) days of the achievement of Milestone 2 or completion of an Elected Assay. 2.5 Should technology, market, regulatory or other considerations suggest to either Party that continued investment of time, resources or money towards the Research may be unsuitable or undesirable, the Parties may elect to hold discussions toward a mutually acceptable resolution, including alternative target proteins, the transfer or modification between the Parties of rights to commercialize products, or termination of the Agreement, as appropriate. III. ELECTION OF ADDITIONAL RESEARCH ASSAYS 3.1 GCI shall have the right, at any time *** thereafter, to request that Xgene initiate the development of additional assays pursuant to this Agreement (Elected Assays). Elected Assays may relate to the development and testing of products for use as personal care or therapeutic treatments for normal skin types, aging skin types, or specific clinical skin related conditions, as will be mutually agreed upon between the parties. 3.2 Identification of Elected Assays GCI may request that an Elected Assay be incorporated within the Research by providing a written request to Xgene to develop the Elected Assay. Elected Assays shall be incorporated into the Research pursuant to either of the following: (a) Election by Mutual Agreement The Parties may mutually agree to the development of an Elected Assay. In such case, subsequent to Xgene's receipt of the written request from GCI, the Parties shall meet and discuss the specifics of the proposed Elected Assay and come to mutual agreement regarding the identification of the assay, an appropriate time line, a description of the condition or therapy upon which the Elected Assay is to be based and a specific set of deliverables which are expected to result from the research concerning the Elected Assay. Xgene shall provide written acknowledgment to GCI of its agreement or refusal to perform the research related to developing the Elected Assay within 30 days of GCI's request. (b) GCI Elected Assays GCI may elect, within its sole discretion, to incorporate any of the following as within the Research, which election is hereby agreed to by Xgene: 3 4 (i) The development of an assay related to ***; (ii) The development of an assay related to ***; (iii) The development of an assay for ***. An election under this subsection 3.2(b) shall be considered effective as of the date the written request from GCI is received by Xgene, who shall then be considered to have agreed to develop the Elected Assay. 3.3 As consideration for each Elected Assay to be developed, GCI shall make payment to Xgene as follows: (a) *** within *** of the date that Xgene agrees in writing to develop the Elected Assay under Section 3.2(a) or of GCI's election under Section 3.2(b); (b) *** upon completion of the Elected Assay, provided that, payment under this subsection shall be contingent upon receipt by GCI of a written final report from Xgene conclusively showing that the Elected Assay has been successfully completed and GCI's agreement that the conclusions made in such written report are reasonable in light of the results of the Research. Payment under this subsection shall be due within *** of such agreement by GCI. 3.4 Notwithstanding Section 2.2, to the extent that GCI has not elected an Elected Assay provided in Section 3.2(b), Xgene may consider offers from third parties to participate in a development agreement related to such Elected Assay. In the event that Xgene has received a written letter of intent from a third party that provides for Xgene to develop an assay which includes such GCI Elected Assay, Xgene shall provide to GCI written notice of such third party offer explaining the assay to be developed and providing sufficient detail for GCI to consider its interest in developing such assay (Election Notification Letter). Within sixty (60) days of its receipt of the Notification Letter, GCI shall exercise its option to incorporate the specific Elected Assay into the Research. Failure of GCI to exercise its option within the relevant time frame shall be considered as GCI's consent for Xgene to develop the assay provided in its letter to GCI with such third party. IV. INTELLECTUAL PROPERTY RIGHTS 4.1 To the extent that either Party owns or controls Background Technology or Background Patent Rights, such Background Technology and Background Patent Rights shall remain the sole property of that Party to exploit in any manner it chooses at its sole discretion, except to the extent specifically provided for herein. 4 5 4.2 Ownership of Intellectual Property from the Research (a) Xgene shall own any Inventions produced during the Research which relate to the Xgene Core Business or otherwise to assays *** and to file patent applications based thereon and prosecute same. (b) GCI shall own all Inventions related to *** or the condition to be reproduced by an Elected Assay. (c) All Inventions not falling under subsections (a) or (b) shall be owned by the inventor thereof. 4.3 Xgene agrees to promptly advise GCI in writing of any Invention(s) made pursuant to this Agreement, but in any event no later than 30 days after the submission of an invention disclosure to its legal department or counsel. 4.4 Preparation, filing, prosecution, maintenance and taking such other actions as are reasonably necessary or appropriate with respect to the development of Invention(s) as well as the costs thereof shall be undertaken by the Party owning the Invention(s) pertaining to such filed patents and/or patent applications. Xgene shall provide GCI with a copy of any patent application which relates to the Research, at least 20 days prior to filing the first of such applications in any jurisdiction, for review and comment by GCI. 4.5 Xgene represents and warrants to the best of its knowledge that with respect to its Background Patent Rights that Xgene has title or right to its Background Patent Rights and Background Technology, and that the grant of any license or right to GCI contemplated in this Agreement under such rights does not require the consent of a third party and is not encumbered by any agreement, assignment or other encumbrance that it inconsistent with the provisions of this Agreement. V. LICENSES 5.1 Xgene grants to GCI a non-exclusive, royalty-free, world wide license to use any assays or artificial skin which are conceived pursuant to this Agreement for any purpose. Xgene further grants to GCI a non-exclusive, royalty free, world wide license under any Inventions owned by Xgene pursuant to this Agreement to make, sell, use, have made, have sold, import, export or offer for sale therapeutic and/or non-therapeutic product(s) for any application. GCI shall have the right to sublicense under the licenses granted in this Section 5.1 for the purpose of developing, testing or confirming properties of experimental and/or commercial products produced by GCI, to the extent Xgene may legally confer such sublicensing rights. 5.2 Xgene shall pay to GCI a royalty based on Xgene's or its sublicensee's commercialization of Xgene's Inventions. The royalty shall be at least *** of the Net Revenue received by Xgene for such commercialization, provided that, Net Revenue shall be defined 5 6 subject to mutual agreement of the Parties. In lieu of a royalty, the Parties may agree to *** or such other arrangement as may be mutually agreed upon between the Parties. 5.3 With respect to any assay or other means of testing products relevant to human papilloma virus or to the condition to be reproduced by an Elected Assay which results from this Agreement, GCI shall have exclusive rights to use such assay for the development of therapeutic or non-therapeutic compounds for the treatment of skin for a *** period. The *** period shall commence upon receipt by GCI from Xgene of a final written report identifying and describing the assay and providing information sufficient to confirm that the assay has been successfully developed. VI. RENEWAL, TERM AND TERMINATION 6.1 The Term of this Agreement shall be as provided in Section 1.5. In the event of expiration of the Agreement due to either the non-achievement of any milestone or expiration of Term, GCI's obligations regarding any unmet milestones shall lapse. 6.2 Should this Agreement expire due to failure to reach a milestone, the Parties may agree to engage in further good faith negotiations toward a mutually agreeable resolution or continuance of the Research, which resolution may include redefining the direction and/or the scope of the Research. 6.3 Termination of the Agreement may occur upon the following: (a) Upon a material breach of the Agreement by the other Party. In the event that a Party wishes to terminate this Agreement due to a material breach, the terminating Party shall serve a written notice on the other Party thereby allowing the other Party sixty (60) days to remedy such breach. In the event that such breach has not been remedied within the prescribed sixty (60) days, the Agreement shall terminate automatically; (b) In the event that either Party becomes subject to Bankruptcy, insolvency, liquidation or similar proceedings, the other Party shall be entitled to terminate this Agreement forthwith. 6.4 Expiration of Term or termination of this Agreement pursuant to this Article shall not effect the rights of either Party under Articles 4, 5 and 7. VII. CONFIDENTIALITY, TREATMENT OF SAMPLES AND PUBLICATIONS 7.1 Treatment of Confidential Information (a) In order for the Parties to perform the work contemplated hereunder, it may be necessary for each Party to disclose certain proprietary information and/or data which is necessary to achieve the objectives of the Research (the "CONFIDENTIAL INFORMATION"). 6 7 A recipient shall protect the CONFIDENTIAL INFORMATION against unauthorized disclosure using the same degree of care, but no less than a reasonable degree of care, as the recipient uses to protect its own CONFIDENTIAL INFORMATION of a like nature; provided that: (b) A recipient shall be obligated to protect only such CONFIDENTIAL INFORMATION disclosed under this Agreement as is: (a) disclosed in tangible form clearly labeled as confidential at the time of disclosure, or (b) disclosed initially in nontangible form identified as confidential at the time of disclosure and, within thirty days following the initial disclosure, summarized and designated as confidential in a written memorandum delivered to the recipient. (c) The obligations of non-disclosure do not apply to CONFIDENTIAL INFORMATION disclosed under this Agreement which: (a) was in the recipient's possession before receipt from the discloser as demonstrated by written documentation; or (b) is or becomes a matter of public knowledge through no fault of the recipient; or (c) is rightfully received by the recipient from a third party without a duty of confidentiality; or (d) is disclosed by the discloser to a third party without a duty of confidentiality on the third party; or (e) is independently developed by the recipient as demonstrated by written documentation; or (f) is disclosed under operation of law; or (g) is disclosed by recipient with the discloser's prior written approval. Such "CONFIDENTIAL INFORMATION" may be designated as such by the receiving Party upon notice to the disclosing Party. (d) The obligation of non-disclosure shall continue for a period of five (5) years from the Effective Date hereof, regardless of termination of this Agreement. 7.2 Treatment of Samples (a) GCI may supply Xgene with reasonable research quantities of the biological material for use in the Research (Biological Material). Any material, including any cell, vehicles, constructs, vectors, plasmids, protein or other medium incorporating the Biological Material or a component thereof, as well as any material that could not have been made but for the Biological Material, are expressly understood to be part of the Biological Material, together with all documentation and descriptions of the Biological Material. (b) Xgene agrees not to supply the Biological Material to other laboratories, nor to any other individual or organization other than employees of the Xgene, and not to use the Biological Material, directly or indirectly, for any commercial purpose without GCI's prior written approval. Any employee of Xgene having access to Biological Material will be previously notified of and agree to be bound by the terms of this Agreement. No employee or third party will be allowed access to the Biological Material unless such employee or third party is bound by an employment, confidentiality or other agreement requiring assignment of all invention, patents and copyrights to Xgene. (c) Xgene will not use, directly or indirectly, the biological Material in any research programs other than as contemplated herein without GCI's prior written approval. 7 8 (d) Xgene acknowledges that the Biological Material is the confidential and proprietary property of GCI and agree to take reasonable care necessary to prevent any disclosure, unauthorized use or transfer of the Biological Material, or any information relating to such, to any party who is not bound by this Agreement. (e) Xgene will not analyze, attempt to analyze, or have analyzed the composition or formulation of the Biological Material except as specifically provided herein. (f) Xgene acknowledges that the Biological Material is experimental in nature and is not for human use. Xgene agrees to handle the Biological Material with appropriate safety precautions. GCI hereby disclaims all express and implied warranties of any kind with respect to the Biological Material. Xgene agrees to hold GCI harmless from any and all liability and/or damages (including costs of defense) resulting from Xgene' use of the Biological Material, including any use in violation of this Agreement. 7.3 Neither Party will publish any material arising from the Research without prior written approval of the other Party. Such approval shall not be unreasonably withheld but may be subject to a delay of up to (3) months total for assessment of the proposed publication and to enable preparation and filing of appropriate patent application(s). Both Parties will procure that any person involved or interested in the Research will not publish or communicate material arising therefrom without first complying with the provisions of this Section 7.3. VIII. MISCELLANEOUS 8.1 Hold Harmless With respect to GCI's rights under Article 5, Xgene shall hold GCI harmless for any activities thereunder which would otherwise infringe Xgene's Background Technology or Background Patent Rights. GCI shall hold Xgene harmless for any and all claims resulting from GCI's use of Xgene technology or products and from the use of any therapeutic or other product developed, sold or licensed by GCI which is developed using Xgene technology or products. 8.2 Force Majeure Each of the Parties hereto shall be excused from performance of its obligations and shall not be liable for damages to the other to the extent that such performance is prevented by circumstances beyond its effective control. Such excuse from performance shall continue so long as the condition responsible for such excuse continues and for a thirty (30) day period thereafter. For purposes of this Agreement, circumstances beyond the effective control of a Party which excuse that Party from performance shall include but shall not be limited to, act of God, act, regulations or laws of any government, injunction or judgment of any court, war, civil commotion, destruction of facility or materials by fire, earthquake, storm or other casualty, labor disturbance, epidemic and failure of public utilities or common carrier. 8.3 Relationship 8 9 Xgene and GCI are independent contractors. Nothing in this Agreement or the course of dealing of the parties shall be construed to constitute the parties hereto as partners, joint ventures or as agents or distributors for one another, or as authorizing any Party to obligate the other in any manner. 8.4 Non-Assignment This Agreement and the covenants herein contained shall be binding and inure to the benefit of Xgene and GCI hereto and their heirs, assigns, successors and legal representatives. This Agreement shall not be assignable by any Party without the other Parties' prior written consent. 8.5 Entire Agreement/Amendment This Agreement and the attachments hereto constitute and contain the entire agreement of the Parties respecting the subject matter hereof. This Agreement may only be amended by mutual written agreement of the Parties. 8.6 Warranty of Right and Authority Each of the Parties represents and warrants to the other that it has the full right and authority to enter into this Agreement, and that it is not aware of any impediment which would inhibit its ability to perform the terms and conditions imposed on it by this Agreement. Nothing contained herein shall be interpreted as a warranty, express or implied as to the patentability, enforceability or validity of any patent application or patent owned or controlled by either Party. 8.7 Further Acts and Instruments Each Party agrees to execute, acknowledge and deliver such further instruments and do all such other acts as may be necessary or appropriate to effect the purpose and intent of this Agreement. 8.8 Severability In the event any one or more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over this Agreement or either of the parties hereto to be invalid, illegal or unenforceable, such provision shall be reformed within the jurisdiction of such court or authority to as nearly approximate the intent of the parties as possible, and if the provision is unreformable the parties shall meet to discuss what steps should be taken to remedy the situation; otherwise and elsewhere this Agreement shall not be affected. 8.9 Captions The captions to this Agreement are for convenience only and are to be of no force or effect in construing or interpreting the provisions of this Agreement. 9 10 8.10 Counterparts This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.11 Limitation of Liability No Party shall be liable to another for indirect, incidental, consequential or special damages, including but not limited to lost profits, arising from or relating to any breach of this Agreement, regardless of any notice of the possibility of such damages. In no event shall either Party be liable for damages relating to lost profits or reasonable royalties or special damages due and payable to a third party on the basis of the other's sale of a product developed hereunder. 8.12 Publicity Either Party's use of the other Party's name or disclosure of the existence or nature of this Agreement or the relationship created thereby to any third party shall be only with the prior written consent of the other Party, which consent will not be unreasonably withheld. 8.13 Interpretation This Agreement has been jointly prepared by the Parties and their respective legal counsel and shall not be strictly construed against either Party. 8.14 Notices Representatives for the receipt of payments, notices, records, reports and other information pursuant to this agreement shall be as follows: For GCI: Attn: Legal Department Genencor International, Inc. 925 Page Mill Road Palo Alto CA 94304 For Xgene: Xgene Corporation 863A Mitten Road Burlingame, California 94010 8.15 Controlling Law This Agreement shall be governed and construed in accordance with the Laws of the State of New York, excluding any choice of law rules which may direct the application of the law of any other jurisdiction. Questions effecting the construction and effect of any patent rights 10 11 arising hereunder shall be determined by the laws of the country in which such patent rights have been applied for and/or granted. 8.16 Negation of Warranties Nothing in this Agreement shall be construed as: (a) an express or implied warranty or representation by Xgene as to the validity or scope of any Background Technology, Background Patent Rights or proprietary technology of Xgene; (b) a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of patents, copyrights, and other rights of third parties; (c) granting by implication, estoppel, or otherwise any licenses or rights under patents or other rights owned or controlled by Xgene other than those necessary for GCI to exercise its rights under Article 5 and 8. 8.17 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE RIGHTS OF USE OF A LICENSED PRODUCT OR TECHNOLOGY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR OTHER RIGHTS OF ANY THIRD PARTIES. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives. GENENCOR INTERNATONAL, INC. XGENE CORPORATION By: /s/ Wayne H. Pitcher By: /s/ Scott McFarlane ------------------------------ ----------------------------- Name: Wayne H. Pitcher Name: Scott McFarlane ---------------------------- --------------------------- Title: Senior VP, Technology Title: Chief Financial Officer --------------------------- -------------------------- 11 12 APPENDIX A XGENE CORPORATION DETECTION OF POSSIBLE ANTI-VIRAL ACTIVITY AGAINST HUMAN PAPILLOMAVIRUSES IN *** *** 12 13 December 9, 1999 VIA FEDERAL EXPRESS Warren Hoeffler XGENE CORPORATION P.O. Box 1310 2028 Howard Avenue San Carlos, CA 94070 Dear Mr. Hoeffler: Thank you for meeting with us on November 1 to review progress in our collaboration, including the results of your Phase I efforts. The ability to reconstitute the *** model with persistently infected HPV cells is an encouraging step towards developing an *** screening system. As you are aware, the Collaboration Agreement provides for payment of Milestone 1 upon development of an *** assay useful for the development and testing of products having activity against human papilloma virus. Phase I of the research plan attached to the Collaboration Agreement roughly corresponds to Milestone 1 and provides that work will be done which: *** *** However, these test results require further analysis and validation. Despite Xgene not having completed the testing requires for Milestone 1 under the Collaboration Agreement, Genencor has agreed to make the payment regarding Milestone 1. This payment was made to Xgene on November 10, 1999. In consideration for Genencor making early payment on Milestone 1, you have agreed that the results not met yet with respect to Milestone 1 will be incorporated into the requirements for Milestone 2. Specifically, Xgene will provide results in two areas to validate the interpretation of the phase I experiments: *** All other conditions of the contract and the Milestones will remain in effect. Thus, Xgene's achievement of Milestone 2 will continue to include the primary objectives of Phase II, i.e., *** 14 December 9, 1999 Page 2 Please provide your acknowledgement by signing below and returning the executed copy to us. Sincerely yours, /s/ Michael V. Arbige Michael V. Arbige, Ph.D. Senior Vice President, Technology MVB/CLS/klg Encl. By: /s/ Warren Hoeffler --------------------------- Warren Hoeffler XGENE CORPORATION 2