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EXHIBIT 10.20
STRATEGIC AGREEMENT
This Strategic Agreement (this "AGREEMENT") is made and entered into as
of the 15th day of July, 2000 (the "EFFECTIVE DATE"), by and between Myriad
Genetic Laboratories, Inc., a Delaware corporation with its principal place of
business at 000 Xxxxxx Xxx, Xxxx Xxxx Xxxx, Xxxx 00000 ("MYRIAD") and
GMP|Genetics, Inc., a Delaware corporation with its principal place of business
at Xxx Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx 00000
("GMP|GENETICS"), a subsidiary of GMP Companies, Inc., a Delaware corporation
with its principal place of business at Xxx Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xx. Xxxxxxxxxx, Xxxxxxx 00000 ("GMP COMPANIES"). Myriad and GMP|Genetics are
each individually referred to herein as a "PARTY" and collectively as the
"PARTIES."
RECITALS
WHEREAS, Myriad is engaged in the business of providing accurate and
timely results for molecular diagnostic tests, including tests for breast and
ovarian cancer ("BRCA1 and BRCA2") and hereditary non-polyposis colon cancer
("MLH1 and MSH2");
WHEREAS, GMP Companies and GMP|Genetics is engaged in the business of
developing and commercializing technologies for performing genetics tests and
possesses gene separation ("Conversion") technology ("GMP Conversion
Technology(TM)") for genetic analysis; and
WHEREAS, the Parties desire to enter into a strategic relationship to
evaluate GMP Conversion Technology(TM) in order to enhance the subsequent
molecular diagnostic testing performed by Myriad.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
premises contained in this Agreement, the Parties agree as follows:
AGREEMENT
1. DEFINITIONS
1.1 "EVALUATION PERIOD" shall mean the period commencing on the date
hereof and ending 120 days following such date or upon completion of the
Evaluation.
1.2 "GMP|GENETICS CONFIDENTIAL INFORMATION" shall mean all GMP|Genetics
proprietary information, technical data, trade secrets or know-how, including,
but not limited to, research, product plans, products, services, customer lists
and customers, markets, software, developments, inventions, processes, formulae,
technology, designs, drawings engineering, hardware configuration information,
marketing, finances or other business information disclosed to Myriad either
directly or indirectly in writing, or by drawings or observations of parts,
equipment or processes, or, if disclosed orally, confirmed in writing within 30
days of disclosure.
1.3 "MYRIAD CONFIDENTIAL INFORMATION" shall mean all Myriad proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, services, customer lists and
customers, markets, software, developments, inventions, processes, formulae,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed to GMP|Genetics
either directly or indirectly in writing, or by drawings or observations of
parts, equipment or processes, or, if disclosed orally, confirmed in writing
within 30 days of disclosure.
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2. VALIDATION AND RESEARCH COLLABORATION
2.1 GENERAL. It is the intention of the Parties to conduct a series of
studies and experiments for the purposes of: (i) ensuring that materials
submitted to GMP|Genetics for Conversion are properly handled in compliance with
all applicable law and governmental regulations and guidelines; (ii) determining
the effectiveness of the use of GMP Conversion Technology(TM) in combination
with the genetic tests performed by Myriad; (iii) determining the commercial
feasibility of a combination Myriad/GMP|Genetics testing service, including cost
and turnaround time(the "Evaluation").
2.2 RESEARCH SAMPLES. GMP|Genetics shall notify Myriad in writing of
the date (the "INITIAL ACCEPTANCE DATE") on which the laboratory at which the
Conversion shall be performed (the "GMP|GENETICS Laboratory") will be ready to
accept samples. The notice referred to in the immediately preceding sentence
shall be given not later than fifteen (15) days prior to the Initial Acceptance
Date. GMP|Genetics shall initially send to Myriad, thirty (30) specimens for
full sequence analysis ("INITIAL EVALUATION"). Each specimen shall consist of a
triplet: an unconverted specimen, a converted (paternal) and a converted
(maternal) specimen. Myriad will perform subsequent sequencing on each of these
triplet specimens. Myriad will provide GMP with copies of all test results and
reports.
2.3 QUALITY ASSURANCE AND AUTOMATION VALIDATION. During the Evaluation
Period, and upon mutual agreement of the Parties, each Party will have the right
to visit the facilities of the other Party to review the laboratory's facilities
and procedures in place for ensuring that specimens are being handled in
compliance with all applicable law and governmental regulations and guidelines
and applicable quality control standards. In addition, the Parties shall meet
from time to time to review Evaluation results and operating procedures and
discuss matters of common concern related to the tests and processes to be
employed by the respective Parties. The Parties acknowledge that it is of utmost
importance to ensure that the highest standards are adhered to in the handling
of the samples and the performance of the Conversion and subsequent genetic
testing.
2.4 CONTEMPLATED SPECIMENS. It is contemplated that the types of
specimens that will be sent by Myriad to GMP|Genetics for Conversion processing
during the Evaluation Period will include anonymous research specimens from high
risk families that do not yet have any apparent mutations in the coding region
of the genes.
2.5 PRICING AND PAYMENT TERMS DURING EVALUATION PERIOD. Following
successful completion of the Initial Evaluation and upon mutual agreement,
Myriad and GMP|Genetics will evaluate the commercial feasibility on an
additional seventy (70) individual DNA samples, which will be converted by
GMP|Genetics and sequenced by Myriad. Myriad will pay Three Hundred Dollars
($300.00) to GMP|Genetics for the conversion of each of these samples.
GMP|Genetics will submit a monthly invoice to Myriad showing the number of
Conversions performed and the amount due to GMP|Genetics. The invoiced amount
will be due and payable within thirty (30) days of the date of the invoice. Late
charges on past due invoices may be assessed at a rate of one and one-half
percent per month. GMP|Genetics shall have the right to cease performance of
services hereunder in the event Myriad has not paid an overdue invoice;
provided, however, that GMP|Genetics shall not be entitled to cease performance
if Myriad's failure to pay an overdue invoice is due to a good faith dispute
between the parties concerning the content or calculation of any invoice.
During the term of this agreement, Myriad agrees to accept approximately 100
additional DNA samples from a Xxxxx Xxxxxxx research study for MLH1 and MSH2
testing analysis which have been previously
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submitted to GMP|Genetics for Conversion. Myriad agrees to charge the researcher
$650 for each such analysis.
2.6 INTELLECTUAL PROPERTY MATTERS. Any Intellectual Property resulting
from defined research study and which is invented jointly by both Parties will
be jointly owned by the Parties.
2.7 CONFIDENTIALITY.
2.7.1 MYRIAD OBLIGATIONS. Myriad shall maintain in strict
confidence all GMP|Genetics Confidential Information and the Evaluation data and
results to the same extent and in the same manner Myriad maintains its own
confidential information and shall not use GMP|Genetics Confidential Information
received from GMP|Genetics during the term of this Agreement, except as
otherwise provided for in this Agreement.
2.7.2 GMP|GENETICS OBLIGATIONS. GMP|Genetics shall maintain in
strict confidence all Myriad Confidential Information and the Evaluation data
and results to the same extent and in the same manner GMP|Genetics maintains its
own confidential information and shall not use Myriad Confidential Information
received from Myriad during the term of this Agreement, except as otherwise
provided for in this Agreement.
2.7.3 EXCEPTIONS. Non-disclosure and non-use obligations of Myriad
and GMP|Genetics shall not apply to Myriad Confidential Information or
GMP|Genetics Confidential Information that:
(a) was known to the receiving Party, as shown by prior written
records, or to the public prior to the disclosure by the disclosing
Party; or
(b) becomes known to the public from a source other than the
receiving Party; or
(c) is disclosed to the receiving Party by a third party having a
legal right to make the disclosure;
(d) is required by law to be disclosed.
2.7.4 PUBLICATIONS. Except as otherwise provided in this Agreement,
the Parties shall collaborate on any press releases or other publication or
dissemination of information that relates to this Agreement or the relationship
of the Parties, including work performed on behalf of Xxxxx Xxxxxxx under
Paragraph 2.5. No such press releases or other publication or dissemination of
information, including Evaluation data and results, shall be made without the
consent of both Parties, unless advised by counsel that the same is required by
applicable law or compelled by court order.
3. LICENSE TO GMP CONVERSION TECHNOLOGY(TM); COMMERCIAL SERVICES
3.1 OPTION GRANT. GMP|Genetics hereby grants to Myriad an option
exercisable during the term of this Agreement to obtain commercial Conversion
services from GMP|Genetics, and to obtain a world-wide license under
GMP|Genetics' GMP Conversion Technology(TM) for research and commercial use by
Myriad upon the terms specified below.
3.2 CONVERSION SERVICES. Subject to the provisions of this Section 3
and following demonstration of acceptable quality on the part of GMP|Genetics
and at Myriad's sole discretion, Myriad shall have the right to obtain from
GMP|Genetics commercial Conversion services with respect
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to specimens that are to be tested by Myriad for BRCA1 and BRCA2, MLH1 and MSH2,
or other genetic tests performed by Myriad. GMP|Genetics will perform the
Conversion on the samples and will return the converted samples to Myriad for
subsequent sequencing pursuant to the pricing and payments terms specified
below.
3.3 PRICING AND PAYMENT TERMS.
3.3.1 COMMERCIAL PRICING. Following the Evaluation, Myriad
and GMP/Genetics shall negotiate preferred pricing
for a mutually beneficial commercial relationship.
3.3.2 QUARTERLY ACCOUNTING. Within sixty (60) days of the
end of each three-month period following the end of
the Evaluation Period, Myriad will submit to
GMP|Genetics an accounting of all amounts charged by
Myriad to its customers for performing genetic tests
on samples which were submitted to GMP|Genetics for
conversion, as well as a statement of amounts which
would be due to GMP|Genetics under clause 3.3.1(ii)
above, including such schedules and data as may be
appropriate to support such calculation (the
"QUARTERLY STATEMENT"). If the amounts due as
aforesaid are greater than the amounts invoiced by
GMP|Genetics under Section 3.3.1 above, Myriad shall
promptly pay the excess amount to GMP|Genetics. The
excess, if any, of the amounts due to GMP|Genetics as
calculated in accordance with the immediately
preceding sentence over the amounts invoiced pursuant
to Paragraph 3.3.1 above shall be referred to herein
as the "INVOICE ADJUSTMENT." GMP|Genetics and its
accountants shall be entitled to review the Quarterly
Statement and any working papers, trial balances and
similar materials relating to the calculation of the
Invoice Adjustment prepared by Myriad or its
accountants. Myriad shall also provide GMP|Genetics'
accountants, as approved by Myriad, with timely
access, during Myriad's normal business hours, to
Myriad's personnel, properties, books and records to
the extent related to the preparation of the Invoice
Adjustment once each year. GMP|Genetics shall not
have any right to audit the books of Myriad earlier
than three (3) years prior to the date on which such
audit is conducted.
3.3.3 DISPUTES. Disputes between the Parties with respect
to the determination of the Invoice Adjustment shall
be resolved by arbitration in the manner set forth in
Section 9.2 below. The costs and expenses related to
the arbitration proceeding (including reasonable
attorneys' fees and costs) will be borne (a) by
Myriad, if the final Invoice Adjustment as determined
in the arbitration proceeding exceeds the Invoice
Adjustment calculated by Myriad pursuant to Section
3.3.2 above by ten percent (10%) or more, or (b) by
GMP|Genetics, if the final Invoice Adjustment as
determined in the arbitration proceeding is less than
the Invoice Adjustment calculated by myriad pursuant
to Section 3.3.2 above by ten percent (10%) or more,
or (c) equally by Myriad and GMP|Genetics if neither
(a) nor (b) of this Section 3.3.3 is applicable.
3.4 LICENSE TERMS. In the event that Myriad elects to exercise its
option to obtain a world-wide non-exclusive license from GMP|Genetics to utilize
GMP Conversion Technology(TM) for its own research and commercial use, Myriad
and GMP|Genetics shall negotiate in good faith the terms of such license.
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4. COLLABORATIVE MARKETING ACTIVITIES
4.1 MARKETING TO NIH. Myriad has entered into a Memorandum of
Understanding with the National Institute of Health (the "NIH") pursuant to
which Myriad performs BRCA1 and BRCA2 sequencing analyses for a preferred price
to scientists that are funded by the NIH. Myriad and GMP|Genetics will jointly
contact the NIH to offer Conversion services with respect to genetic testing
conducted by Myriad.
4.2 MARKETING TO OTHER THIRD PARTIES. The Parties shall further
collaborate to make the Conversion services available to the research community
for research purposes only.
4.3 PRICING. In the event that the Parties successfully negotiate to
sell Conversion services to any third party, Myriad will charge such Third Party
for Conversion services, and will be responsible for all payments to
GMP|Genetics for such Conversion services, as specified in Section 3.3.1 above.
5. NO REPRESENTATION OR WARRANTY. GMP|Genetics makes no representation or
warranty with respect to the performance of cell lines it produces which are
haploid for one or more human chromosomes, including their safety, effectiveness
or commercial viability. GMP|GENETICS DISCLAIMS ALL WARRANTIES WITH REGARD TO
PRODUCTS, SERVICES AND PROCESSES PROVIDED BY IT UNDER THIS AGREEMENT, INCLUDING,
BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE, NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT. GMP|Genetics additionally disclaims all obligations and liabilities
for losses or damages, including, but not limited to, direct, indirect, special
and consequential damages, attorneys' and experts' fees, and court costs arising
out of or in connection with the products, services and processes provided by it
under this Agreement. Myriad assumes all responsibility and liability, including
claims and actions by third parties, for loss or damage claimed or caused by a
cell line and/or process that, directly or indirectly, is manufactured, used or
sold by Myriad in connection with this Agreement.
6. INDEMNIFICATION. a) Myriad shall defend, indemnify and hold
GMP|Genetics and its successors and assigns and its and their respective
officers, directors, shareholders, employees and agents harmless from and
against all liability, demands, damages, expenses and losses for death, personal
injury, mental or physical illness or property damage or claims as to the same
arising out of or in connection with Myriad's products, services or processes
arising directly or indirectly from this Agreement, except for matters for which
GMP|Genetics has indemnified Myriad under paragraph b) below.
b) GMP|Genetics shall defend, indemnify and hold
Myriad and its successors and assigns and its and their respective officers,
directors, shareholders, employees and agents harmless from and against all
liability, demands, damages, expenses and losses for death, personal injury,
mental or physical illness or property damage or claims as to the same
proximately caused by the GMP Conversion Technology(TM) services performed under
this Agreement.
7. TERM. This Agreement shall terminate one year from the Effective Date
of this Agreement. This Agreement may be extended thereafter upon mutual written
agreement of the Parties, subject to the right of either Party to terminate this
Agreement upon ninety (90) days' written notice to the other Party.
Notwithstanding the foregoing, either Party may terminate this Agreement
immediately
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upon notice in the event of a breach by the other Party of this Agreement in any
material respect if the same has not been cured within thirty (30) days after
written notice of the breach is given.
8. MISCELLANEOUS.
8.1 PROMOTION OF RELATIONSHIP. During the Evaluation Period Myriad and
GMP|Genetics will each separately and jointly promote and publicize the
strategic relationship and purposes of this Strategic Agreement to third
parties, under terms mutually agreeable to the Parties.
8.2 NO AGENCY. It is understood and agreed that nothing in this
Agreement shall be construed as authorization for either Myriad or GMP|Genetics
to act as agent for the other Party to this Agreement. Myriad shall not incur
any liability for any act or failure to act by employees of GMP|Genetics.
GMP|Genetics shall not incur any liability for any act or failure to act by
employees of Myriad.
8.3 DISPUTE RESOLUTION. Other than with respect to matters arising
under Paragraphs 3.3 and 3.4 above, any dispute, controversy or claim arising
out of or relating to this Agreement shall be settled first by recourse to the
Chief Executive Officers of each Party, who shall attempt in good faith to
resolve any disputes between the Parties, and then, if such attempts to resolve
any such dispute are unsuccessful, by arbitration under the rules of the
American Arbitration Association. All awards of the arbitrators shall be final
and binding on the parties and enforceable in any court of competent
jurisdiction. Nothing herein shall prevent a Party from seeking injunctive
relief, where appropriate, from a court of competent jurisdiction pending the
outcome of any arbitration concerning the subject of such arbitration or when
authorized by an arbitrator's award or when emergency relief is required.
8.4 BRANDING. Myriad shall credit GMP|Genetics as the source of the GMP
Conversion Technology(TM) in all of Myriad's promotional material and any other
materials intended for distribution to any person or entity other than one of
the Parties. GMP|Genetics shall credit Myriad as the source of the full sequence
tests in all of GMP|Genetics' promotional material and any other materials
intended for distribution to any person or entity other than one of the Parties.
8.5 CHAIN OF CUSTODY. The Parties will work together to jointly develop
procedures intended to ensure that samples are handled in compliance with all
applicable law and governmental regulations and guidelines, and ensure the
integrity of the results of the Conversion.
8.6 FORCE MAJEURE. All Parties to the Agreement shall be excused from
the performance of their obligations under this Agreement if such performance is
prevented by Force Majeure and the non-performing Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting Force Majeure continues and the non-performing Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, Force Majeure shall include conditions beyond the control of the
Parties, including without limitation, an act of God, voluntary or involuntary
compliance with any regulation, law, or order of any government, war, civil
commotion, epidemic, failure or default of public utilities or common carriers,
destruction of production facilities or materials by fire, earthquake, storm, or
like catastrophe.
8.7 AMENDMENT. This Agreement may not be amended, supplemented, or
otherwise modified except by an instrument in writing signed by all Parties.
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8.8 NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been sufficiently
given for all purposes if mailed by first class, certified or registered mail,
postage prepaid, or if transmitted via facsimile with confirmation of successful
transmission. Unless otherwise specified in writing, the mailing addresses of
the parties shall be as described below:
FOR MYRIAD: Myriad Genetic Laboratories, Inc.
000 Xxxxxx Xxx
Xxxx Xxxx Xxxx, XX 00000
Attn: President
FOR GMP|GENETICS:
GMP|Companies, Inc.
Xxx Xxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, M.D.
Executive Vice President
8.9 ASSIGNMENT. Neither Party may not assign its rights and obligations
under this Agreement without the prior written consent of the others Party,
except in connection with any merger, reorganization, or sale of all or
substantially all of its assets. This Agreement shall be binding upon and shall
inure to the benefit of the successors and permitted assigns of the Parties.
8.11 CONSENTS NOT UNREASONABLY WITHHELD.Whenever provision is made in
this Agreement for any Party to secure the consent or approval of another, that
consent or approval shall not unreasonably be withheld, and whenever in this
Agreement provisions are made for one Party to object to or disapprove a matter,
such objection or disapproval shall not unreasonably be exercised.
8.12 NO STRICT CONSTRUCTION. This Agreement has been prepared jointly
and shall not be strictly construed against any Party.
8.13 HEADINGS. The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
8.14 SEVERANCE OF CLAUSES. All Parties agree that, should any provision
of this Agreement be determined by a court of competent jurisdiction to violate
or contravene any applicable law or policy, such provision will be severed or
modified by the court to the extent necessary to comply with the applicable law
or policy, and such modified provision and the remainder of the provisions
hereof will continue in full force and effect.
8.15 WAIVER. The waiver of a breach hereunder may be effected only by a
writing signed by the waiving Party and shall not constitute a waiver of any
other breach.
8.16 ENTIRE AGREEMENT. This Agreement and the attachments hereto and
other agreements executed by the Parties or affiliates entities this even date
constitute the entire agreement of the Parties relating to the subject matter
and supercede any prior agreements relating to the subject matter hereof.
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8.17 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but which together
shall constitute the same instrument.
8.18 SURVIVING RIGHTS. Termination, expiration, or cancellation of this
Agreement by any Party shall not relieve the Parties of any rights or
obligations accrued hereunder prior to such termination, expiration, or
cancellation.
8.19 INSURANCE. Each Party shall maintain general commercial and
product liability insurance in amounts sufficient to cover reasonably
anticipated claims and liability arising under or related to the subject of this
Agreement.
IN WITNESS WHEREOF, the Parties by their respective authorized
officers, have executed this Agreement.
MYRIAD GENETIC LABORATORIES, INC. GMP|GENETICS, INC.
By: By:
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Xxxxxxx X. Xxxxxxxxxxx, M.D., M.S., Xxxx Xxxxxxx, M.D., President
President
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