EXCLUSIVE LICENSE AGREEMENT
BETWEEN
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
AND
IMAGENETICS INCORPORATED
FOR
INVENTIONS MADE IN THE FIELD
OF MOLECULAR CYTOGENETICS
TABLE OF CONTENTS
Article No. Title Page
----------- ----- ----
RECITALS..................................................................... 2
1. DEFINITIONS.............................................................. 5
2. REPRESENTATIONS AND WARRANTS............................................. 10
3. GRANT.................................................................... 12
4. LICENSE ISSUE FEE........................................................ 14
5. ROYALTIES................................................................ 15
6. DUE DILIGENCE............................................................ 19
7. TERMS TO BE NEGOTIATED................................................... 21
8. PROGRESS AND ROYALTY REPORTS............................................. 25
9. BOOKS AND RECORDS........................................................ 26
10. LIFE OF THE AGREEMENT................................................... 27
11. TERMINATION BY THE REGENTS.............................................. 28
12. TERMINATION BY THE LICENSEE............................................. 28
13. SUPPLY OF THE BIOLOGICAL MATERIALS...................................... 29
14. CONFIDENTIALITY......................................................... 30
15. PATENT PROSECUTION AND MAINTENANCE...................................... 31
16. MAINTENANCE OF THE BIOLOGICAL MATERIALS................................. 34
17. USE OF NAMES AND TRADEMARKS
AND NONDISCLOSURE OF AGREEMENT.......................................... 35
18. PATENT MARKING.......................................................... 36
19. PATENT INFRINGEMENT..................................................... 37
20. INDEMNIFICATION......................................................... 39
21. WAIVER.................................................................. 40
22. ASSIGNABILITY........................................................... 40
23. LATE PAYMENTS........................................................... 41
24. NOTICES................................................................. 41
25. GOVERNING LAWS.......................................................... 42
26. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION............................. 42
27. EXPORT CONTROL LAWS..................................................... 42
28. FORCE MAJEURE........................................................... 43
29. FULL DISCLOSURE......................................................... 43
30. DISPOSITION OF PRODUCT ON HAND UPON TERMINATION......................... 44
31. MISCELLANEOUS........................................................... 44
SCHEDULE A - PAGE 1A.................................................... 46
SCHEDULE A - PAGE 2A.................................................... 47
SCHEDULE A - PAGE 3A.................................................... 48
SCHEDULE B - PAGE 1B.................................................... 49
SCHEDULE C - PAGE 1C.................................................... 50
UC Case No. 85-157
EXCLUSIVE LICENSE AGREEMENT FOR
CHROMOSOME ANALYSIS TECHNOLOGY
WITH CHROMOSOME-SPECIFIC PROBES
THIS LICENSE AGREEMENT is made and is effective this 1st day of July, 1994
by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California
corporation, having its statewide administrative offices at 000 Xxxxxxxx Xxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, hereinafter referred to as "The
Regents", and IMAGENETICS INCORPORATED, an Illinois corporation, having a
principal place of business at 000 Xxxx Xxxxxxxxxxx Xxxx, X.X. Xxx 0000,
Xxxxxxxxxx, Xxxxxxxx 00000-0000, hereinafter referred to as "Licensee".
RECITALS
WHEREAS, certain inventions, generally characterized as specific nucleic
acids, gene products, and gene expression pathways, herein collectively referred
to as "the Invention(s)", were made in the course of research at the University
of California, San Francisco (UCSF) in the Division of Molecular Cytometry under
the direction of Xxx X. Xxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxxx, Xxxxxxxx
Xxxxxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, and Xxxxxx Xxxxxx ("Principal
Investigators") and are covered by Regents' Patent Rights as defined below;
WHEREAS, The Regents owns an undivided interest in U.S. Patent No.
4,468,464 entitled "Process and Composition for Biologically Functional
Molecular
Chimeras" by X. Xxxxx, et al. and issued August 28, 1984, U.S. Patent No.
4,740,470 entitled "Biologically Functional Molecular Chimeras" by X. Xxxxx, et
al. and issued April 26, 1988, and U.S. Patent No. 4,237,224 entitled "Process
and Composition for Biologically Functional Molecular Chimeras" by X. Xxxxx, et
al. and issued December 2, 1980, which patents may prevent the practice of
Invention(s) claimed in Regents' Patent Rights contained in Paragraph 1.5 of
this Agreement;
WHEREAS, if it is necessary for Licensee to be licensed under the
aforementioned U.S. Patent No. 4,468,464, U.S. Patent 4,740,470, or U.S. Patent
No. 4,237,224 to practice the Invention(s) claimed in Regents' Patent Rights,
then Licensee shall obtain the necessary licenses from Stanford University; in
no case do the rights and licenses granted to Licensee under the terms of this
Agreement cover U.S. Patent No. 4,468,464, U.S. Patent No. 4,740,470, or U.S.
Patent No. 4,237,224;
WHEREAS, The Regents and Licensee entered into a Research Agreement
entitled "Research Agreement for the Development of Molecular Cytogenetics"
dated July 1, 1994 to provide funding by Licensee to the Principal Investigators
at UCSF to perform research in the detection and treatment of disease related to
chromosome abnormalities ("Research Agreement");
WHEREAS, The Regents and Licensee entered into an Option Agreement entitled
"Option to Invention(s) Made In The Field of Molecular Cytogenetics" dated July
1, 1994 ("Option Agreement");
WHEREAS, under the terms of the Research Agreement, Licensee may elect to
include patent applications and resulting patents covering Invention(s) arising
in the
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conduct of work performed under the Research Agreement in either the Option
Agreement or in this Agreement;
WHEREAS, under the terms of the Option Agreement, Licensee may elect to
include patent applications and resulting patents covered therein under the
terms of this Agreement;
WHEREAS, if Licensee elects to include patent applications and resulting
patents covering Invention(s) arising in the conduct of work performed under the
Research Agreement directly under the terms of this Agreement, or patent
applications and resulting patents covered by the Option Agreement under the
terms of this Agreement, then Licensee shall provide The Regents with a Plan of
Commercialization required under the terms of the Option Agreement or the
Research Agreement whichever is appropriate covering commercial development of
the Invention(s) claimed in such patent applications and resulting patents, and
thereafter, Licensee and The Regents shall negotiate the following terms to be
included in this Agreement based on the information contained in the Plan of
Commercialization: a) license issue fee (Paragraph 4.1); b) royalty rate
(Paragraph 5.1); c) minimum annual royalties (Paragraph 5.4); and d) diligence
provisions in the form of specific performance milestones (Paragraph 6.4);
WHEREAS, Licensee is desirous of acquiring exclusive licenses to any and
all of Regents' Patent Rights covering the Invention(s) arising in the conduct
of work performed under the Research Agreement in Licensee's Field, subject to
rights granted by to the U.S. government as hereinafter described;
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WHEREAS, both parties recognize and agree that royalties due hereunder will
be paid on both pending patent applications (for a limited period of time) and
issued patents;
WHEREAS, the Invention(s) have utility for the detection and treatment of
chromosome abnormalities relating to specific diseases, and the Licensee has an
interest in obtaining rights to pursue commercial development of the Invention
in Licensee's Field; and
WHEREAS, The Regents desires to grant such licenses to Licensee in order
that the Invention(s) be developed, utilized, and marketed to the fullest extent
so that the products therefrom and other benefits can be enjoyed by the general
public.
The parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meaning set
forth below:
1.1 "Research" means investigations leading to the development of
information, reagents and/or techniques useful for and/or resulting in
identification and/or characterization of the following:
1) genetic abnormalities
2) genes
3) gene transcripts
4) gene products
relevant to human genetic disease and for their detection or characterization.
5
1.2 "Research Agreement" means the agreement entitled "Research Agreement
for the Development of Molecular Cytogenetics" between The Regents and Licensee
dated July 1, 1994, for the conduct of Research under the Research Program and
any extensions or renewals thereof, and incorporated herein by reference. In the
event of any inconsistencies between the Research Agreement and this Agreement,
the terms of this Agreement shall control.
1.3 "Research Information" means technical data, processes, methods,
inventions, compositions-of-matter, and biological materials, equipment,
instruments, apparatuses, devices, articles of manufacture or component parts(s)
thereof developed under or resulting from the performance of Research under the
Research Agreement and improvements thereof, except for improvements on new
subject matter not funded by Licensee. In the event that computer software or
information management systems are created or developed in the performance of
Research under the Research Agreement such computer software or information
management systems shall be treated as Research Information. There shall be no
transfer of the physical possession of equipment, instruments, apparatuses,
devices, articles of manufacture or component part(s) thereof (except biological
materials) comprising Research Information.
1.4 "Regents' Patent Rights" means all U.S. patents and patent
applications and foreign patents and patent applications assigned to The Regents
and requested under Paragraph 15.4 infra, including any reissues, extensions,
substitutions, continuations, divisions and continuations-in-part (only to the
extent, however, that claims in the continuations-in-part are entitled to the
priority filing date of the parent
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patent application) based on and including any subject matter claimed in or
covered by any of the following:
(1.4a) Any future patent rights to subject matter claimed in or
covered by a patent application(s) covering any Inventions
elected by Licensee under the provisions of Article VIII of
the Research Agreement or pursuant to Licensee's exercise of
the option under the provisions of Article 4 (EXERCISE OF
THE OPTION) of the Option Agreement.
1.5 "Patent Products" means (a) any kit, composition of matter, material,
or product; (b) any kit, composition of matter, material, or product to be used
in a manner requiring the performance of the Patent Method, or any kit,
composition of matter, material, or product produced by the Patent Method, or
(c) the practice of the Patent Method itself to the extent the manufacture, use,
or sale of (a), (b), or (c) immediately above falls within the scope of one or
more claims of Regents' Patent Rights during the term of the patent grant, in
countries in which such claim or claims have issued and have not expired, been
abandoned, disclaimed, or found invalid or unenforceable.
1.6 "Unprotected Products" means (a) any kit, composition of matter,
material, or product; (b) any kit, composition of matter, material, or product
to be used in a manner requiring the performance of the Unprotected Method, or
any kit, composition of matter, material, or product produced by the Unprotected
Method, or (c) the practice of the Unprotected Method itself to the extent the
manufacture, use, or sale of (a), (b), or (c) immediately above falls within the
scope of one or more pending claims within Regents' Patent Rights during the
period and in such countries in which such claim or claims have not issued, and
have not expired, been abandoned,
7
disclaimed, or found invalid or unenforceable, such period not to exceed five
years from the date in which the subject matter is introduced in a patent
application in each country that such patent application is filed.
1.7 "Patent Method" means any process or method the use or practice of
which would constitute in a particular country, but for the license granted to
the Licensee pursuant to this Agreement, an infringement of an unexpired claim
of a patent within Regents' Patent Rights in that country in which the Patent
Method is used or practiced.
1.8 "Unprotected Method" means any process or method the use or practice
of which would constitute in a particular country, but for the license granted
to the Licensee pursuant to this Agreement an infringement of any unabandoned,
pending claim of a patent application within Regents' Patent Rights if such
patent application in that country in which the Unprotected Method is used or
practiced had issued.
1.9 "Product(s)" means Patent Products and Unprotected Products.
1.10 "Method" means Patent Method and Unprotected Method.
1.11 "Field" means research Product, diagnostic Product, and therapeutic
Product based on (a) detection of normal or altered specific nucleic acid
sequences, gene products, specific nucleic acid sequences, or gene expression
pathways, or (b) therapies targeted to specific nucleic acid sequences, gene
products, or gene expression pathways, provided that the above specific Products
do not employ or are not employed in the technique of IN SITU hybridization.
1.12 "Net Sales" means the gross invoice prices from the sale of a Product
by Licensee, an Affiliate, a Joint Venture or a sublicensee to independent third
parties for
8
cash or tangible consideration in accordance with Generally Acceptable
Accounting Principles limited to the following deductions (if not already
deducted from the gross invoice price and at rates customary within the
industry): (i) allowances (actually paid and limited to rejections, returns,
and prompt payment and volume discounts granted to customers of a Product,
whether in cash or a Product in lieu of cash), (ii) freight, transport packing,
insurance charges associated with transportation, and (iii) taxes, tariff, or
import/export duties based on sales when included in gross sales, but not
value-added taxes or taxes assessed on income derived from such sales. Where
Licensee distributes a Product for end use for purposes other than internal
research and development or clinical trials to itself, an Affiliate, or a Joint
Venture, then such distribution shall be considered a sale at list price
normally charged to independent third parties, and The Regents shall be entitled
to collect a royalty on such sale in accordance with Article 5 (ROYALTIES).
1.13 "Affiliate(s)" of a party means any entity which, directly or
indirectly, controls such party, is controlled by such party or is under common
control with such party ("control" for these purposes being defined as the
actual, present capacity to elect a majority of the directors of such affiliate,
or if not, the capacity to elect the members that control fifty percent (50%) of
the outstanding stock or other voting rights entitled to elect directors)
provided, however, that in any country where the local law shall not permit
foreign equity participation of a majority, then an "Affiliate" shall include
any company in which the Licensee shall own or control, directly or indirectly,
the maximum percentage of such outstanding stock or voting rights
9
permitted by local law. Each reference to Licensee herein shall be meant to
include its Affiliates.
1.14 "Joint Venture" means any separate entity established pursuant to an
agreement between a third party and Licensee to constitute a vehicle for a joint
venture, which separate entity manufacture, uses, purchases, sells, or acquires
a Product from Licensee. Each reference to Licensee herein shall be meant to
include its Joint Ventures.
1.15 "Plan of Commercialization" means a reasonably detailed plan
containing information regarding, but not limited to, a development plan
outlining specific performance milestones and timetable for a Product's
commercial development and its introduction to the market place, projected sales
for the Product, the date of the anticipated first commercial sale of a Product,
projected costs and profits for such Product, and other terms commonly included
in business plans.
1.16 "Infringement Litigation Costs" means costs incurred in the
infringement suit, provided for in Article 19 (PATENT INFRINGEMENT) of this
Agreement, consisting of outside attorney's fees billed to Licensee and The
Regents, royalties (due The Regents) that were used to offset the infringement
suit costs in accordance with Paragraph 19.4, Licensee's outside attorney fees
that were used to offset the infringement suit costs in accordance with
Paragraph 19.2a, and other out-of-pocket expenses of both parties.
2. REPRESENTATIONS AND WARRANTS
2.1 Licensee represents and warrants the following:
10
(2.1a) Licensee shall fund Research under and according to the
Research Agreement, which Research shall be under the
direction of the Principal Investigators.
2.2 The Regents represents and warrants the following:
(2.2a) Regents' Patent Rights were developed under funding provided
in part by the Department of Health and Human Services
(DHHS);
(2.2b) Pursuant to 35 USC 200-212, The Regents may elect to retain
title to any invention (including the Inventions) made by it
under U.S. Government funding;
(2.2c) If The Regents elects to retain title to the Inventions, The
Regents is required by law to grant to the U.S. Government a
nontransferable, paid up, non-exclusive, irrevocable license
to use the Inventions by or on behalf of the U.S. Government
throughout the world.
2.3 The Regents represents to the best of its knowledge and accordingly
warrants that:
(2.3a) these licenses and the associated Invention(s) are provided
WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESSED OR
IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY
THAT EACH PATENT PRODUCT, UNPROTECTED PATENT PRODUCT, OR
METHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY
RIGHT;
(2.3b) IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF
THIS LICENSE OR THE USE OF THE INVENTION(S), METHOD,
UNPROTECTED PATENT PRODUCT, OR PATENT PRODUCT;
(2.3c) Nothing in this Agreement shall be construed as a warranty
or representation by The Regents as to the validity,
enforceability, or scope of any of Regents' Patent Rights; a
warranty or representation that anything made, used, sold,
or otherwise disposed of under any license granted in
11
this Agreement is or will be free from infringement of
patents of third parties; an obligation to bring or
prosecute actions or suits against third parties for
patent infringement except as provided in Article 19
(PATENT INFRINGEMENT); or conferring by implication,
estoppel or otherwise any license or rights under any
patents of The Regents other than Regents' Patent Rights
as defined herein, regardless of whether such patents are
dominant or subordinate to Regents' Patent Rights
(specifically, The Regents does not grant to Licensee any
rights under U.S. Patent No. 4,468,464, U.S. Patent No.
4,237,224 and U.S. Patent No. 4,740,470 set forth in the
Recitals of this Agreement); or an obligation to furnish
any know-how that does not constitute Research Information
not provided under the Research Agreement or not provided
in Regents' Patent Rights.
3. GRANT
3.1 Subject to the licenses granted to the U.S. Government set forth in
Paragraph 2.2 supra and to The Regents' continuing rights in Paragraph 3.4
infra, The Regents hereby grants to Licensee exclusive licenses under Regents'
Patent Rights within the Field to make, have made, use, sell, and distribute
Products and to practice the Method.
3.2 The licenses granted in Paragraph 3.1 hereunder shall be subject to
the rights of the U.S. Government including those set forth in 35 U.S.C. 200-212
and applicable governmental implementing regulations.
3.3 The manufacture of each Product and the practice of the Method shall
be subject to applicable government importation laws and regulations of a
particular country on each Product made outside said particular country in which
such Product is used or sold.
12
3.4 Nothing in this Agreement shall be deemed to limit The Regents' right
to publish and use technical data from any research performed by The Regents,
Research information, and Regents' Patent Rights relating to the Invention(s)
and to make and use Products, Methods, and associated technology for educational
and research purposes.
3.5 The Regents also grants to Licensee the right to issue sublicenses to
third parties to make, have made, use, sell, and distribute a Product and to
practice the Method and have others practice the Method, provided that Licensee
has current exclusive rights thereto under this Agreement. Licensee, however,
may grant sublicenses to others in the form of label licenses even though
Licensee's licenses granted under this Agreement are non-exclusive. To the
extent applicable, such sublicenses shall include all of the rights of and
obligations due The Regents and the United States Government that are contained
in this Agreement except that Licensee shall not be bound by the royalty rate
and license issue fee contained herein with respect to its negotiation with
third parties seeking such sublicenses. However, Licensee shall, in such third
party negotiations, use its best efforts in reaching favorable royalty rates and
license issue fees. Licensee shall be entitled to five percent (5%) of all
income generated from sublicensing as an administrative fee, and of the
remaining income, one half (1/2) of all income generated from sublicensing shall
be paid to The Regents and one half (1/2) shall be retained by Licensee.
3.6 Licensee shall notify The Regents of each sublicense granted hereunder
and provide The Regents with a summary of the major terms of each sublicense.
Licensee shall collect and pay all income from fees and royalties due The
Regents (and
13
guarantee all such payments) received from sublicensees. Licensee shall require
sublicensees to provide it with progress and royalty reports in accordance with
the provisions herein, and Licensee shall collect and deliver to The Regents all
such reports due from sublicensees.
3.7 Upon termination of this Agreement for any reason, The Regents, at its
sole discretion, shall determine whether any or all sublicenses shall be
canceled or assigned to The Regents.
3.8 Pursuant to 35 USC Section 204, because this Agreement grants the
exclusive right to make, use, or sell a Product in the United States, the
Licensee agrees that each Product embodying the Invention(s) or produced through
the use thereof will be manufactured substantially in the United States absent a
waiver from the United States Government.
4. LICENSE ISSUE FEE
4.1 The Licensee shall pay or cause to be paid to The Regents a license
issue fee for each Product licensed hereunder commensurate with the value of
each such Product. The cash amount of the license issue fee shall be negotiated
in good faith by The Regents and Licensee pursuant to Paragraph 7.1 infra and
the Product's value shall be based on information contained in the Plan of
Commercialization for that Product. The license issue fee shall be paid to The
Regents at the time the negotiated terms and conditions for the Product are
incorporated in Appendix A of this Agreement.
14
4.2 The fees set forth in Paragraph 4.1 supra are non-refundable,
non-creditable, and not an advance against royalties.
5. ROYALTIES
5.1 In consideration for all the rights and licenses granted to Licensee,
the Licensee shall also pay to The Regents an earned royalty rate based on the
Net Sales of each Product. The royalty rate for each Product licensed hereunder
shall be negotiated in accordance with the provisions of Paragraph 7.1 infra,
but the basis for such negotiation shall be the profitability of each Product
calculated in accordance with the information contained in the Plan of
Commercialization provided to The Regents by Licensee for each such Product.
5.2 The Licensee shall be entitled to reduce the royalty rate pursuant to
Paragraph 5.1 supra in the event that it becomes necessary for Licensee to
license patent applications and patents owned by a third party(s) to make, use,
sell, or distribute a Product, provided that the combined royalties due The
Regents and the third party(s) for the Product having therapeutic applications
exceed ten percent (10%) or for the Product having diagnostic applications
exceed eight percent (8%) . Such reduction shall be equal to one-half (1/2) the
sum of the royalty rates due such third party(s), and in no event shall the
royalty rate paid to The Regents on Net Sales of a Product be less than four
percent (4%). Licensee shall not, however, be entitled to reduce the royalty
rate under the provisions of this Paragraph 5.2 for licenses obtained from
Stanford University to U.S. Patent No. 4,468,464, U.S. Patent No. 4,740,470, or
U.S. Patent No. 4,237,224.
15
5.3 In the event that a Patent Product for which the royalty rate is not
reduced pursuant to Paragraph 5.2 above is sold in combination with another
active component that has independent cash value that is substantially the same
as the Patent Product, but such active components is not a Patent Product, then
The Regents shall be entitled to a royalty payment equal to the amount it would
otherwise receive if the Patent Product was sold as a single product. In the
event that no such separate sales are made by Licensee, then the Net Sales from
the sales of the combination product, for purposes of calculating the amounts
due under Paragraph 4.1 herein, shall be calculated by multiplying the Net Sales
of that combination product by the fraction A/(A+B), where A is the number of
Patent Product(s) comprising the combination product, and B is the number of
active components in the combination product that are not Patent Product(s). In
no case, however, shall the fraction A/(A+B) be less than four percent (4%).
5.4 Regents' Patent Rights, Product, and Method are defined so that
royalties shall be payable on products and methods covered by both pending
patent applications and issued patents. Earned royalties shall accrue in each
country for the duration of Regents' Patent Rights in that country and shall be
payable to The Regents when a Product is invoiced, or if not invoiced, when
delivered to a third party or to itself, an Affiliate, or Joint Venture in the
case where such delivery of a Product to Licensee, an Affiliate, or Joint
Venture is intended for end use for purposes other than internal research and
development or clinical trials.
5.5 Royalties accruing to The Regents shall be paid to The Regents
quarterly on or before the following dates of each calendar year:
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February 28 for the calendar quarter ending December 31
May 31 for the calendar quarter ending March 31
August 31 for the calendar quarter ending June 30
November 30 for the calendar quarter ending September 30
Each such payment will be for royalties which accrued up to the Licensee's most
recently completed calendar quarter.
5.6 The Regents and Licensee shall enter into good-faith negotiations
pursuant to Paragraph 7.1 infra to establish dates and amounts comprising
minimum annual royalty payments to be paid to The Regents. These minimum annual
royalties shall be paid to The Regents and shall be based on a percentage of the
anticipated income due The Regents from royalty income based on the anticipated
Net Sales of Products. A U.S. dollar amount comprising the minimum annual
royalties shall be paid to The Regents on dates established by the parties
during the good-faith negotiation in which market introduction is expected for a
Product based on information provided in the Plan of Commercialization. The
minimum annual royalties shall be paid to The Regents in the negotiated amounts
and at the negotiated times whether or not a Product is available for sale in
any country. These minimum annual royalty payments shall be paid to The Regents
by February 28 of each year and shall be credited against income paid to The
Regents under Paragraph 3.5 and earned royalties quarter to quarter until
consumed for that year. In the event minimum annual royalties exceed earned
royalties, the excess may be credited against earned royalties in succeeding
years until such excess is consumed.
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5.7 All monies due The Regents shall be payable in United States funds
collectible at par in San Francisco, California. When a Product is sold for
monies other than United States dollars, the earned royalties will first be
determined in the foreign currency of the country in which such Product was sold
and then converted into equivalent United States funds. The exchange rate will
be that rate quoted in the Wall Street Journal on the last business day of the
reporting period.
5.8 Earned royalties on sales of a Product occurring in any country
outside the United States shall not be reduced by any taxes, fees, or other
charges imposed by the government of such country on the remittance of royalty
income. The Licensee shall also be responsible for all bank transfer charges.
5.9 Notwithstanding the provisions of Article 28 (FORCE MAJEURE), if at
any time legal restrictions other than tax withholding on sublicensing revenues
prevent prompt remittance of part or all royalties owed to The Regents by the
Licensee with respect to any country where a Patent Product is sold or
distributed, the Licensee shall convert the amount owed to The Regents into
United States funds and shall pay The Regents directly from another source of
funds for the amount impounded.
5.10 In the event that any patent or any claim thereof included within the
Regents' Patent Rights shall be held invalid or unenforceable in a final
decision by a court of competent jurisdiction and last resort and from which no
appeal has or can be taken, all obligation to pay royalties based on such patent
or claim or any claim patentably indistinct therefrom shall cease as of the date
of such final decision. The Licensee shall not, however, be relieved from
paying any royalties that accrued before
18
such decision or that are based on another patent or claim that has not expired
or that is not involved in such decision.
5.11 No royalties shall be collected or paid hereunder to The Regents on
Patent Products sold to the account of the U.S. Government. Licensee and its
sublicensee shall reduce the amount charged for a Product distributed to the
United States Government by an amount equal to the royalty for such a Product
otherwise due The Regents as provided herein.
5.12 In the event The Regents reduces Licensee's exclusive license to a
nonexclusive license under Article 6 (DUE DILIGENCE) herein and grants rights to
any third party under Regents' Patent Rights (except for the U.S. government) on
financial terms and conditions different than the financial terms of this
Agreement, then The Regents shall notify Licensee of such different terms and
conditions. Licensee shall have the option of adopting such terms and
conditions by giving notice to The Regents within sixty (60) days of The
Regents' notification to Licensee.
6. DUE DILIGENCE
6.1 The Licensee, upon execution of this Agreement, shall diligently
proceed with the development manufacture and sale of each Product and shall
earnestly and diligently endeavor to market same within a reasonable time after
execution of this Agreement and in quantities sufficient to meet the market
demands therefore.
6.2 The Licensee shall be entitled to exercise prudent and reasonable
business judgment in the manner in which it meets its due diligence obligations
19
hereunder. In no case, however, shall Licensee be relieved of its obligations
to meet the due diligence provisions of this Article 6 (DUE DILIGENCE).
6.3 The Licensee shall endeavor to obtain all necessary governmental
approvals in each country for the manufacture, use and sale of each Product.
6.4 Licensee and The Regents shall negotiate in good faith to establish
diligence provisions in the form of specific performance milestones representing
technical and regulatory achievements needed to be attained in order to
commercialize each Product licensed hereunder and the corresponding date each
such milestone will be met by Licensee. The negotiation establishing specific
performance milestone and the corresponding date it will be met will be based on
information provided in the Plan of Commercialization for each Product provided
to The Regents pursuant to Paragraph 7.1 infra.
6.5 Subject to Licensee's rights under Paragraph 6.2 and subject to the
Licensee's freedom to practice Regents' Patent Rights without infringement of
third-party rights, if the Licensee is unable to attain any of the performance
milestones established for a Product and the corresponding dates for meeting
each such milestone, pursuant to Paragraph 6.4 supra, then the Regents shall
have the right and option to terminate Licensee's licenses to that Product or
reduce the Licensee's exclusive license to a nonexclusive license with respect
to the Product. This right, if exercised by The Regents, supersedes the rights
granted in Article 3 (GRANT).
6.6 At the request of either party, any controversy or claim arising out
of or relating to meeting the diligence provisions of this Agreement shall be
settled by
20
arbitration conducted in accordance with the arbitration provisions set forth in
Paragraphs 7.4 through 7.10 infra.
6.7 To exercise the right to terminate the licenses to a Product or to
reduce Licensee's grant to one of nonexclusivity under this Article 6 (DUE
DILIGENCE), The Regents must give the Licensee written notice of the deficiency.
The Licensee thereafter has sixty (60) days to cure the deficiency or to request
arbitration. If The Regents has not received a written request for arbitration
or satisfactory tangible evidence that the deficiency has been cured by the end
of the sixty (60) day period, then The Regents may, at its option, terminate the
license to that Product or reduce the Licensee's exclusive license to a
nonexclusive license to such Product by giving written notice to the Licensee.
These notices shall be subject to Article 24 (NOTICES).
7. TERMS TO BE NEGOTIATED
7.1 Licensee shall provide a Plan of Commercialization to The Regents in
accordance with the provisions of the Research Agreement or the Option
Agreement, whichever is appropriate, to cover the commercial development of each
Product claimed in a patent application(s) and patent(s) issuing thereon and
elected by Licensee to be included in Regents' Patent Rights and covered by the
terms of this Agreement. Upon receipt of such Plan of Commercialization by The
Regents, The Regents and Licensee shall promptly enter into good-faith
negotiations to determine the following provisions covering each such Product to
be included in the terms of this Agreement:
21
(7.1a) pursuant to Paragraph 4.1 herein, the cash amount of the
license issue fee for each Product licensed hereunder to be
paid to The Regents;
(7.1b) pursuant to Paragraph 5.1 herein, the royalty rate based on
Net Sales of each Product licensed hereunder;
(7.1c) pursuant to Paragraph 5.4 herein, the amount of the minimum
annual royalty payments and the years that each such payment
will be paid to The Regents for each Product licensed
hereunder; and
(7.1d) pursuant to Paragraph 6.4 herein, diligence provisions in
the form of specific performance milestones needed to
commercialize the Product and the corresponding date each
such milestone will be met by Licensee.
7.2 Upon successful conclusion of the negotiation pursuant to
Subparagraphs 7.1a through 7.1d supra, the terms agreed upon by the parties
hereto covering each Product or Method claimed in a patent application(s) and
patent(s) issuing thereon and elected by Licensee to be included in Regents'
Patent Rights shall be set forth in Appendix A of this Agreement, which shall be
attached hereto and incorporated herein.
7.3 If Licensee and The Regents are unsuccessful in establishing terms and
conditions covering each Product or Method in accordance with the provisions of
Subparagraphs 7.1a through 7.1d supra, then either party may refer any
controversy or claim arising out of or relating to this Article 7 (TERMS TO BE
NEGOTIATED) to arbitration under the provisions of this Paragraph 7.3 by so
notifying the other party in writing in accordance with the provisions of
Article 24 (NOTICES) stating the nature of the dispute to be resolved.
22
7.4 Within fifteen (15) business days following such notice three
arbitrators shall be selected by the following process:
(7.4a) Each party shall designate one individual, not an employee,
director, paid consultant, or shareholder of the party to
serve as an arbitrator; and
(7.4b) These two arbitrators shall select a third individual, who
shall be an attorney experienced in arbitration proceedings,
to serve as the third arbitrator and to preside in
resolution of the dispute. The third arbitrator shall not
be an employee, director or shareholder of either party.
7.5 Promptly after selection of the three arbitrators, the arbitrators
shall meet with the parties at which time the parties shall each present in
writing the issue to be resolved and a proposed ruling on it. Such writing
shall be served on the other party in advance and be limited to no more than
twenty (20) pages.
7.6 The following general provisions shall apply to the arbitration
proceeding:
(7.6a) No later than thirty (30) days after the appointment of the
third arbitrator, the arbitrators shall set a date for a
hearing to resolve the issue identified by the parties. The
hearing shall take place no later than one hundred twenty
(120) days from the original notice requesting arbitration;
(7.6b) The arbitrators shall permit the taking of not more than one
(1) deposition by each party, and shall permit, subject to
the provisions of a mutually agreeable protective order, the
production of only those documents immediately and directly
bearing on the issue or issues subject to arbitration and
only to the extent necessary for the convenience and use of
the arbitrators, and shall not require or permit any other
discovery by any means, including, but not limited to,
depositions interrogatories or production of documents;
(7.6c) No later than ten (10) business days prior to the hearing,
each party may submit a single written brief or memorandum
in support of its position which may be no more than twenty
(20) pages. Each party shall be entitled to no more than
three (3) hours of hearing to present
23
testimony or documentary evidence. Such time limitation
shall include any direct, cross or rebuttal testimony, but
such time limitation shall only be charged against the party
conducting such direct, cross or rebuttal testimony. It
shall be the responsibility of the arbitrators to determine
whether each party has had the three (3) hours to which it
is entitled or may, upon good cause shown, have additional
time to present its case;
(7.6d) Each party shall have the right to be represented by
counsel. The arbitrators shall have sole discretion with
regard to the admissibility of evidence. Admissibility will
be decided by two-thirds vote; and
(7.6e) Within fifteen (15) days of the conclusion of the hearing,
each party must submit a proposal finding to the
arbitrators.
7.7 The arbitrators shall rule on the disputed issue within thirty (30)
days following the completion of the testimony of both parties. Such ruling
shall adopt in their entirety the proposed findings of one of the parties on the
disputed issue, or the arbitrators shall adopt alternative findings. The issue
shall be resolved upon two-thirds (2/3) vote of the arbitrators.
7.8 Arbitration shall take place in the location of choice of the party
who has not requested arbitration, but such location shall be in the state of
California.
7.9 The arbitrators shall be paid reasonable fees plus expenses, which
shall be shared equally between The Regents and Licensee.
7.10 The decision of the arbitrators shall be enforceable, but not
appealable, in any court of competent jurisdiction.
24
8. PROGRESS AND ROYALTY REPORTS
8.1 Beginning one year from the effective date recited on page one of this
Agreement and annually thereafter, the Licensee shall submit to The Regents a
progress report covering the Licensee's activities related to the development
and testing of each Product and the obtaining of the governmental approvals
necessary for marketing. These progress reports shall be provided to The
Regents to cover the progress of the research and development of the Product
until its first commercial sale in the United States.
8.2 The progress reports submitted under section 8.1 shall include, but
not be limited to, the following topics so that The Regents may be able to
determine the progress of the development of each Product and may also be able
to determine whether or not Licensee has met its diligence obligations set forth
in Article 6 (DUE DILIGENCE) above:
- summary of work completed
- key scientific discoveries
- summary of work in progress
- current schedule of anticipated events or milestones
- market plans for introduction of each Product
- activities of sublicensees, if any.
8.3 The Licensee also agrees to report to The Regents in its immediately
subsequent progress and royalty report the date of first commercial sale of a
Product in each country.
25
8.4 After the first commercial sale of a Product, the Licensee will
provide The Regents with quarterly royalty reports to The Regents on or before
each February 28, May 31, August 31 and November 30 of each year. Each such
royalty report will cover the Licensee's most recently completed calendar
quarter (October through December, January through March, April through June,
and July through September) and will show:
(8.4a) the gross sales and Net Sales of each Product sold by the
Licensee and reported to Licensee as sold by its
sublicensees during the most recently completed calendar
quarter;
(8.4b) the number of each Products sold or distributed by Licensee
and reported to Licensee as sold or distributed by its
sublicensees;
(8.4c) the royalties, in U.S. dollars, payable hereunder with
respect to Net Sales; and
(8.4d) the exchange rates used, if any.
8.5 If no Product has been made during any reporting period, a statement
to this effect shall be required.
9. BOOKS AND RECORDS
9.1 The Licensee shall keep books and records accurately showing each
Product manufactured, used, and/or sold under the terms of this Agreement. Such
books and records shall be preserved for at least five (5) years from the date
of the royalty payment to which they pertain and shall be open to inspection,
upon seven (7) days notice during normal business hours at Licensee's normal
place of business, to
26
a mutually agreed upon independent accountant or auditor who shall be bound by
an obligation of confidentiality for such audit. Audits of Licensee's books and
records shall not take place more than once in any twelve-month period.
9.2 The fees and expenses of the accountant or auditor performing such
examination shall be borne by The Regents. However, if an error in royalties of
more than five percent (5%) of the total royalties due for any year is
discovered, then the fees and expenses of the accountant or auditor shall be
borne by the Licensee.
10. LIFE OF THE AGREEMENT
10.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement shall be
in force from the effective date recited on page one and shall remain in effect
for the life of the last-to-expire patent licensed under this Agreement, or
until the last patent application licensed under this Agreement is abandoned.
10.2 Any termination of this Agreement shall not affect the rights and
obligations set forth in the following Articles:
Article 9 Books and Records
Article 14 Confidentiality
Article 17 Use of Names and Trademarks
Article 20 Indemnification
Article 30 Disposition of each Product on Hand Upon Termination
27
11. TERMINATION BY THE REGENTS
11.1 If the Licensee should violate or fail to perform any term or covenant
of this Agreement, then The Regents may give written notice of such default
("Notice of Default") to the Licensee. If the Licensee should fail to repair
such default within sixty (60) days of the effective date of such notice, The
Regents shall have the right to terminate this Agreement and the licenses herein
by a second written notice ("Notice of Termination") to the Licensee. If a
Notice of Termination is sent to the Licensee, this Agreement shall
automatically terminate on the effective date of such notice. These notices
shall be subject to Article 24 (NOTICES).
11.2 The Regents shall also have the right and option to terminate this
Agreement if the Research Agreement is prematurely terminated by Licensee and
there has been no breach of failing thereof by The Regents. Said termination of
this Agreement shall be carried out in the manner set forth in Paragraph 11.1
above.
12. TERMINATION BY THE LICENSEE
12.1 The Licensee shall have the right upon ninety (90) days written notice
to The Regents to terminate this Agreement in whole or as to any portion of
Regents' Patent Rights. Upon expiration of the ninety (90) day period,
Licensee's termination shall be effective and Licensee shall stand unlicensed
hereunder. Such notice of termination shall be subject to Article 24 (NOTICES).
28
13. SUPPLY OF THE BIOLOGICAL MATERIALS
13.1 The Regents agrees to initially supply Licensee with viable samples of
the biological materials comprising Research Information (to the extent that
such biological materials are in a form acceptable for transfer) within thirty
(30) days upon request from Licensee up until three (3) months after termination
of the Research Agreement. To the extent Licensee requires and requests
additional samples from The Regents during the term hereof, and The Regents has
such additional samples in its possession, The Regents agrees to supply such
additional samples. Licensee agrees to pay the actual handling and shipping
costs for any additional samples provided.
13.2 To the extent Licensee is able to produce biological materials,
reagents, compositions, and materials derived from Research Information, and
subject to prudent and reasonable business judgment, Licensee shall make
reasonable efforts to provide biological materials, reagents, compositions, and
materials derived from Research Information at no charge to The Regents for
research purposes only in the Division of Molecular Cytometry or in research
programs at Xxxxxxxx Berkeley Laboratory under the direction of Xxx X. Xxxx and
Xxxxxx Xxxxxx. In the event Licensee provides biological materials, reagents,
compositions, and materials to The Regents, such biological materials, reagents,
compositions, and materials are provided WITHOUT WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. Licensee's obligations to provide materials
shall not exceed a fair market value for such materials in excess of one hundred
fifty thousand dollars ($150,000).
29
14. CONFIDENTIALITY
14.1 Licensee and The Regents respectively shall treat and maintain the
other party's proprietary business, patent prosecution, software, engineering
drawings, process and technical information, and other proprietary information
(hereinafter referred to as "Proprietary Information") in confidence using at
least the same degree of care as that party uses to protect its own proprietary
information of a like nature for a period from the date of disclosure until five
(5) years after the date of termination of this Agreement, provided that all
Proprietary Information shall be labeled or marked confidential or as otherwise
similarly appropriate by the disclosing party, or if the Proprietary Information
is orally disclosed, it shall be reduced to writing or some other physically
tangible form, marked and labeled as set forth above by the disclosing party and
delivered to the receiving party within thirty (30) days of the oral disclosure
as a record of the disclosure and the confidential nature thereof.
Notwithstanding the foregoing, Licensee and The Regents may use and disclose
Proprietary Information to its employees, agents, consultants, contractors, and
sublicensees, or as is deemed necessary by Licensee or The Regents to market and
sell each Product, and for any purpose set forth or relating to this Agreement,
provided that any such parties are bound by a like duty of confidentiality.
(14.1a) Nothing contained herein shall in any way restrict or impair the
right of Licensee or The Regents to use, disclose or otherwise
deal with any Proprietary Information:
i) which recipient can demonstrate by written records was
previously known to it; or
ii) which is now, or becomes in the future, public knowledge
other than through acts or omissions of recipient; or
30
iii) which is lawfully obtained without restrictions by recipient
from sources independent of the disclosing party; or
iv) which is required to be disclosed to a governmental entity
or agency in connection with seeking any governmental or
regulatory approval, or pursuant to the lawful requirement
or request of a governmental entity or agency; or
v) which is furnished to a third party by the recipient with
similar confidentiality restrictions imposed on such third
party, as evidenced in writing; or
vi) which The Regents is required to disclose pursuant to the
California Public Records Act or other applicable law.
If The Regents is required to disclose Licensee's Proprietary Information
pursuant to Subparagraphs (iv) and (vi) above, The Regents shall give Licensee
ten (10) days notice prior to disclosure.
14.2 The Licensee and The Regents agree to destroy or return to the
disclosing party Proprietary Information received from the other in its
possession within fifteen (15) days following the effective date of termination.
However, each party may retain one copy of proprietary information for archival
purposes in nonworking files. Licensee and The Regents agree to provide each
other, within thirty (30) days following termination, with a written notice that
Proprietary Information has been returned or destroyed.
15. PATENT PROSECUTION AND MAINTENANCE
15.1 The Regents shall diligently prosecute and maintain the United States
and foreign patent applications and patents comprising Regents' Patent Rights
using counsel of its choice. The Regents shall promptly provide Licensee with
copies of all
31
relevant documentation so that Licensee may be currently and promptly informed
and apprised of the continuing prosecution, and may comment upon such
documentation sufficiently in advance of any initial deadline for filing a
response, provided, however, that if Licensee has not commented upon such
documentation prior to the initial deadline for filing a response with the
relevant government patent office or The Regents must act to preserve Regent's
Patent Rights, The Regents shall be free to respond appropriately without
consideration of Licensee's comments, if any. Both parties hereto agree to keep
this documentation in confidence in accordance with the provisions of Article 14
(CONFIDENTIALITY) herein. The Regents' counsel will take instructions only from
The Regents. The Regents shall retain counsel of its choice that is reasonably
acceptable to Licensee, provided, however, that if Licensee rejects The Regents'
choice of counsel three (3) times consecutively (i.e., three different new
attorneys), then The Regents shall be free, in its sole discretion, to choose an
attorney of its choice.
15.2 The Regents shall use all reasonable efforts to amend any patent
application to include claims requested by the Licensee and required to protect
each Product contemplated to be sold or Method to be practiced under this
Agreement.
15.3 The Regents and Licensee shall cooperate in applying for an extension
of the term of any patent included within Regents' Patent Rights, if
appropriate, under the Drug Price Competition and Patent Term Restoration Act of
1984. The Licensee shall prepare all such documents, and The Regents agrees to
execute such documents and to take such additional action as the Licensee may
reasonably request in connection therewith.
32
15.4 The Regents shall, at the request of Licensee, file, prosecute, and
maintain patent applications and patents covered by Regents' Patent Rights in
foreign countries if available. The Licensee must notify The Regents within
seven (7) months of the filing of the corresponding United States application of
its decision to request The Regents to file foreign counterpart patent
applications. This notice concerning foreign filing shall be in writing and
must identify the countries desired. The absence of such a notice from the
Licensee to The Regents within the seven (7) month period shall be considered an
election by Licensee not to request The Regents to secure foreign patent rights
on behalf of the Licensee. The Regents shall have the right to file patent
applications at its own expense in any country Licensee has not included in its
list of desired countries, and such applications and resultant patents, if any,
shall not be included in the licenses granted under this Agreement. However,
The Regents shall notify Licensee of such foreign countries in which The Regents
filed patent applications and in which Licensee elected not to secure foreign
rights. Subject to the availability of relevant rights, Licensee shall have the
right and option to include in this Agreement (if not already licensed
exclusively to a third party) those patent applications and patents issuing
thereon filed in countries not originally included in Licensee's desired list at
any time up to five (5) years from the filing date of such patent applications,
provided, however, that Licensee shall notify The Regents in writing of its
decision and shall share equally with other licensees in all filing,
prosecution, and maintenance fees for such additional patents and patent
applications.
15.5 1/n of past, present and future costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications
and all costs and fees
33
relating to the preparation and filing of patents covered by Regents' Patent
Rights in Paragraph 1.5 shall be borne by Licensee. The costs of all
interferences and oppositions shall be considered prosecution expenses and also
shall be borne by Licensee. Licensee shall reimburse The Regents for all costs
and charges within thirty (30) days following receipt of a proper itemized
invoice from The Regents to which relevant law firm xxxxxxxx shall be attached.
For purposes of this Paragraph, "n" means the number of Regents' licensees to
Regents' Patent Rights. But, the United States Government shall not be
considered a licensee of The Regents.
15.6 The Licensee's obligation to underwrite and to pay patent filing costs
and related costs, prosecution and maintenance costs shall continue for so long
as this Agreement remains in effect, provided, however, that the Licensee may
terminate its obligations with respect to any patent application or patent in
any or all designated countries upon three (3) months written notice to The
Regents. The Regents will use its best efforts to curtail the associated patent
costs after such a notice is received from the Licensee. The Regents may
continue prosecution and/or maintenance of such application(s) or patent(s) at
its sole discretion and expense, provided, however, that the Licensee shall have
no further right or licenses thereunder.
16. MAINTENANCE OF THE BIOLOGICAL MATERIALS
16.1 The Regents agrees to instruct the Principal Investigators that when
circulating replicable biological materials comprising Research Information to
third parties to do so under the terms and conditions set forth in the
Biological Material Transmission Letter attached hereto as Schedule A. The
Regents expressly reserves
34
the right to transfer replicable biological materials comprising Research
Information as provided in this Paragraph 16.1 to Universities and nonprofit
research organizations to the extent that such transfer does not compete with
Licensee. The Regents shall inform Licensee of third party requests for
biological materials and shall provide Licensee with a copy of the
fully-executed copy of the Biological Material Transmittal Letter. The Regents
shall inform Licensee of comments, suggestions, and information provided The
Regents by recipients of biological material. Licensee shall not interfere with
The Regents efforts to bail these materials to third parties.
16.2 The Licensee agrees not to transfer of the replicable biological
materials comprising Research Information (to the extent that such materials are
not part of any Product sold by Licensee) that are not freely available to
others accept to Affiliates, Joint Ventures, sublicensees, and potential
sublicensees.
17. USE OF NAMES AND TRADEMARKS
AND NONDISCLOSURE OF AGREEMENT
17.1 Nothing contained in this Agreement shall be construed as conferring
any right to use in advertising, publicity, or other promotional activities any
name, trade name, trademark, or other designation of either party hereto by the
other (including any contraction, abbreviation, or simulation of any of the
foregoing). The use of the name by Licensee of "The Regents of the University of
California" or the name of any University of California campus or national
laboratory is expressly prohibited except as provided for under Articles 14
(CONFIDENTIALITY) and 17 (USE OF NAMES AND TRADEMARKS AND NONDISCLOSURE OF
AGREEMENT).
35
17.2 Each party hereto further agrees not to use or refer to this Agreement
or any license granted hereunder in any promotional activity without the express
written approval of the other party. However, The Regents shall be free to
release to the inventors of Invention(s) covered by this Agreement and senior
administration officials employed by The Regents the terms and conditions of
this Agreement upon their request. If such release is made, The Regents shall
request that the inventors not disclose such terms and conditions to others. It
is further understood that should a third party inquire whether a license is
available, The Regents may disclose the existence of this Agreement and the
extent of the grant in Article 3 (GRANT) to such third party, but shall not
disclose the name of the Licensee, except where The Regents is required to
release information under either the California Public Records Act or other
applicable law.
18. PATENT MARKING
18.1 Licensee agrees to xxxx each Product falling within the scope of an
issued claim within Regents' Patent Rights for anything under the terms of this
Agreement, or their containers, in accordance with the applicable patent marking
laws.
18.2 Licensee shall have the right to include in any NDA for a Product, a
list of patents included within Regents' Patent Rights identifying The Regents
as patent owner.
36
19. PATENT INFRINGEMENT
19.1 In the event that either party responsible for administering this
Agreement learns of substantial infringement of any patent licensed under this
Agreement, the informed party shall call such infringement to the other party's
attention thereto in writing and shall provide the other party with reasonable
evidence of such infringement. Both parties to this Agreement agree that during
the period and in a jurisdiction where Licensee has exclusive rights under this
Agreement, neither will notify an infringing third party of the infringement of
any of Regents' Patent Rights limited to the exclusive rights granted under this
Agreement without first obtaining consent of the other party, which consent
shall not be unreasonably denied. Both parties shall use their best efforts in
cooperation with each other to terminate such infringement without litigation.
19.2 Licensee may request that The Regents take legal action against the
infringement of Regents' Patent Rights. Such request shall be made in writing
and shall include reasonable evidence of such infringement and damages to
Licensee. If the infringing activity has not been abated within ninety (90)
days following the date of such request, The Regents shall have the right to:
(19.2a) commence suit on its own account to terminate the
infringement. In the event The Regents commences suit,
Licensee shall reimburse The Regents for fifty percent (50%)
of The Regents' actual Infringement Litigation Costs.
Licensee's share of The Regents' Infringement Litigation
Costs shall be paid to The Regents on a quarterly basis
within sixty (60) days of receiving notice from The Regents
of the amount of such costs. Such reimbursement shall
continue until the suit is finally adjudicated or settled.
All recoveries shall first be applied to fully repay The
Regents and Licensee for the cost of the suit. Any
remainder shall
37
be shared between The Regents and Licensee, with The Regents
and Licensee sharing equally in the recovery; or
(19.2b) refuse to participate in such suit. In the event The
Regents refuses to participate in such suit, The Regents
shall give notice of its election in writing to Licensee by
the end of the one-hundredth (100th) day after receiving
notice of such request from Licensee. Licensee thereafter
may bring suit for patent infringement in Licensee's own
name and if the infringement occurred during the period and
in a jurisdiction where Licensee has exclusive rights under
this Agreement. In the event Licensee elects to bring suit
in accordance with this Paragraph, The Regents may
thereafter join such suit at its own expense.
19.3 Subject to Paragraph 19.2b above, legal action brought jointly by The
Regents and Licensee and participated in by both shall be at the joint expense
of the parties and all recoveries be shared jointly by them in proportion to the
share of expense paid by each party.
19.4 In the event that The Regents refuses to participate in a suit and the
Licensee brings same, the Licensee may withhold, during pendency of the suit, up
to fifty percent (50%) of the minimum and earned royalty income otherwise due
The Regents to offset one-half of Licensee's Infringement Litigation Costs.
Licensee's Infringement Litigation Costs shall be deducted from royalty payments
on a quarterly basis, and an accounting of such deductions shall be reflected in
Licensee's quarterly royalty reports to The Regents provided for in Article 8
(PROGRESS AND ROYALTY REPORTS). Said withheld royalty income shall be applied
to only those Infringement Litigation Costs that Licensee incurred during the
quarter in which such royalty income was due and owing. Should one-half of the
Infringement Litigation Costs of the suit exceed one-half of the royalties
allowed to be withheld in accordance with this
38
Paragraph 19.4, Licensee may apply such excess to the following quarter. This
same application of excess cost will continue until such time as the suit is
finally adjudicated. All recoveries shall first be applied to fully repay both
parties for the cost of the suit, and any remainder shall be shared equally.
19.5 Each party agrees to cooperate with the other in litigation
proceedings instituted hereunder. Such litigation shall be controlled by the
party bringing the suit, except that The Regents may be represented by counsel
of its choice pursuant to The Regents' determination in any suit brought by
Licensee.
20. INDEMNIFICATION
20.1 Licensee and The Regents are acting as independent contractors under
this Agreement and nothing continued herein shall make either party the agent,
employee, partner, or representative of the other.
20.2 Licensee agrees (and requires its sublicensees) to indemnify, hold
harmless and defend The Regents, its officers, employees, and agents; the
sponsors of the research that lead to the Invention(s) covered by Regents'
Patent Rights; and the inventors of any Invention(s) covered by the patents and
patent applications comprising Regents' Patent Rights to which The Regents is
owner or co-owner of record, for any loss of or damage to the property of any
person or persons and any injury or death of any person or persons resulting
from or arising out of the exercise of this license or any sublicense granted
herein, excluding acts of negligence on the part of The Regents and claims of
infringement brought by The Regents against Licensee. Where The Regents is held
to be negligent, liability shall be apportioned
39
according to the percentage of negligence accorded to The Regents by an
appropriate court or forum having jurisdiction. In those states or countries
where such an allocation of the percentage of negligence is not awarded, any
controversy or claim relating to such allocation or negligence between the
parties to this Agreement shall be settled by arbitration in accordance with the
arbitration provisions of Paragraphs 17.4 through 17.10 supra. In no event
shall The Regents be liable for normal commercial activities of Licensee nor
will The Regents be liable for any product liability under any related cause of
action.
20.3 The Regents shall promptly notify Licensee in writing of any claim or
suit brought against The Regents in respect of which The Regents intends to
invoke the provisions of this Article 20 (INDEMNIFICATION). Licensee will keep
The Regents informed on a current basis of its defense of any claims pursuant to
this Article 20 (INDEMNIFICATION).
21. WAIVER
21.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.
22. ASSIGNABILITY
22.1 This Agreement is binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns, provided, however,
this Agreement shall be personal to the Licensee and shall be assignable by the
Licensee
40
only with the written consent of The Regents, which consent shall not be
unreasonably withheld, except that Licensee may freely assign this Agreement to
an Affiliate or to a business entity that acquires all or substantially all of
the business or assets of the Licensee and that assumes, in writing, the
performance of all provisions of this Agreement, the Option Agreement, and the
Research Agreement.
23. LATE PAYMENTS
23.1 In the event royalty payments, fees, or patent prosecution costs are
not received by The Regents when due, Licensee shall pay to The Regents interest
charges at the rate of five percent (5%) plus the rate of interest which is
charged by the San Francisco Federal Reserve Bank to member banks twenty-five
(25) days prior to the date the payment was due. Such interest shall be
calculated from the date payment was due until actually received by The Regents.
Acceptance by The Regents of any late payment interest from Licensee under this
Paragraph 23.1 shall in no way affect the provision of Article 21 (WAIVER)
herein.
24. NOTICES
24.1 Any payment, notice, or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective (a) on the date of delivery if delivered
in person or (b) on the fourth day after mailing if mailed by first-class
certified mail, postage paid, to the respective address given below, or to such
other address as it shall designate by written notice given to the other party
as follows:
41
In the case of the Licensee: IMAGENETICS INCORPORATED
000 Xxxx Xxxxxxxxxxx Xxxx
P. 0. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Vice President, Research & Development
In the case of The Regents: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA (C/N 85-157-1)
Office of Technology Transfer
0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Director
25. GOVERNING LAWS
25.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or
patent application shall be governed by the applicable laws of the country of
such patent or patent application.
26. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION
26.1 If this Agreement or any associated transaction is required by the law
of any nation to be either approved or registered with any governmental agency,
the Licensee shall assume all legal obligations to do so and costs in connection
therewith. The Regents shall cooperate in all the Licensee's efforts.
27. EXPORT CONTROL LAWS
27.1 The Licensee shall observe all applicable United States and foreign
laws with respect to the transfer of Products and related technical data to
foreign
42
countries, including, without limitation, the International Traffic in Arms
Regulations (ITAR) and the Export Administration Regulations.
28. FORCE MAJEURE
28.1 The parties to this Agreement shall be excused from any performance
required hereunder if such performance is rendered impossible or unfeasible due
to any catastrophes or other major events beyond their reasonable control,
including, without limitation, war, riot, and insurrection; laws, proclamations,
edicts, ordinances or regulations; strikes, lockouts or other serious labor
disputes; and floods, fires, explosions, or other natural disasters. When such
events have abated, the parties' respective obligations hereunder shall resume.
29. FULL DISCLOSURE
29.1 The Regents shall make its best effort to disclose Research
Information to Licensee and shall allow Licensee reasonable access to facilities
and faculty and staff participating in Research sponsored by Licensee. The
Regents shall identify and collect relevant materials which comprise Research
Information (to the extent such materials do not violate the proprietary rights
of others) and make such information available in a timely manner to Licensee.
To the extent The Regents are able to do so, The Regents shall make such
Research Information available to Licensee in a form most convenient for
transfer to and use by Licensee, including electronic media. The Regent's duty
of disclosure to Licensee for Research Information shall not extend beyond one
year from the date of expiration of the Research Agreement.
43
30. DISPOSITION OF PRODUCT ON HAND UPON TERMINATION
30.1 Upon termination of this Agreement, the Licensee shall have the
privilege of disposing of each previously made or partially made Product, but no
more, within a period of one hundred and twenty (120) days, provided, however,
that the sale of such Product shall be subject to the terms of this Agreement
including, but not limited to the payment of royalties on the Net Sales of a
Product at the rates and at the times provided herein and the rendering of
reports in connection therewith.
31. MISCELLANEOUS
31.1 The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
31.2 This Agreement will not be binding upon the parties until it has been
signed below on behalf of each party, in which event, it shall be effective as
of the date recited on page one.
31.3 No amendment or modification hereof shall be valid or binding upon the
parties unless made in writing and signed on behalf of each party.
31.4 This Agreement and the Research Agreement embody the entire
understanding of the parties and shall supersede all previous communications,
representations or understandings, either oral or written, between the parties
relating to the subject matter hereof.
31.5 In case any of the provisions contained in this Agreement shall be
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or
44
unenforceability shall not affect any other provisions hereof, but this
Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
31.6 This Agreement includes Schedule A, B, and C and Appendix A which are
attached hereto.
IN WITNESS WHEREOF, both The Regents and the Licensee have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, on the day and year hereinafter written.
IMAGENETICS INCORPORATED THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/ Xxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxx
----------------------- -----------------------------------
(Signature) (Signature)
Name Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxxx
---------------------
(Please Print)
Title President Title: Director;
-------------------- Office of Technology Transfer
Date June 7, 1994 Date July 11, 1994
--------------------- --------------------------------
45
SCHEDULE A - PAGE 1A
University of California/San Francisco Campus (UCSF)
Instructions for Standard Letter Transmitting
Biological Materials to Universities and
Nonprofit Institutions
The attached letter is authorized for use by University of
California/(UCSF) Principal Investigators and Administrators ONLY with
Scientists at other UNIVERSITIES AND NONPROFIT RESEARCH INSTITUTIONS when
transmitting cell lines, plasmids and the like for non-commercial research
purposes.
1. Choose the appropriate form of university or nonprofit research
institution in paragraph 2.
2. Choose whether or not to include the phrase "our cooperative" in
paragraph 2.
3. Insert in paragraph 4 the amount of processing charge. If the
material is to be shipped at no charge, insert the words "no charge".
4. Send the letter IN DUPLICATE to the other scientists.
5. Do not send biological materials until you receive the duplicate copy
executed by both the scientist and the other institution.
6. Send a copy of the fully executed letter agreement to:
Xxxx X. Xxxxxxx
Director
Office of Technology Transfer
0000 Xxxxxx Xxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
7. Any changes in the wording of this standard letter must be reviewed by
the Director of the Office of Technology Transfer before acceptance.
Note: Do not use this letter for the exchange of living plants. A separate
"Testing Agreement for the Plant Varieties" is available for that
purpose.
46
SCHEDULE A - PAGE 2A
SAMPLE LETTER FOR USE PRIOR TO TRANSMISSION OF BIOLOGICAL
MATERIALS TO INVESTIGATORS AT UNIVERSITIES OR NON-PROFIT
RESEARCH INSTITUTIONS
(date)
IN DUPLICATE
To:_____________________
This is to (acknowledge receipt of your letter) (confirm our telephone
conversation) in which you requested certain research materials developed in
this laboratory be sent to you for scientific research purposes. The materials
concerned, which belong to The Regents of the University of California/San
Francisco Campus (UCSF) are:__________________________________________.
While I cannot transfer ownership of these materials to you, I will be
pleased to permit your use of these materials within your (university)
(Non-Profit Research Institution) laboratory for (our cooperative) scientific
research. However, before forwarding them to you, I require your agreement that
the materials will be received by you only for use in (our cooperative work)
(scientific research), that you will bear all risk to you or any others
resulting from your use, and that you will not pass these materials, their
progeny or derivatives, on to any other party or use them for commercial
purposes without the express written consent of The Regents of the University of
California. You understand that no other right or license to these materials,
their progeny or derivatives, is granted or implied as a result of our
transmission of these materials to you.
These materials are to be used with caution and prudence in any
experimental work, since all of their characteristics are not known.
As you recognize, there is a processing cost to us involved in providing
these materials to you. We will xxxx you for our processing costs, which will
amount to $___________________.
If you agree to accept these materials under the above conditions, please
sign the enclosed duplicate copy of this letter, then have it signed by an
authorized representative of your institution, and return it to me. Upon
receipt of that confirmation I will forward the material(s) to you.
47
SCHEDULE A - PAGE 3A
(Note: other paragraphs discussing the relevant literature, the nature of the
work, hazards relating to materials to be sent etc. may be appropriate. These
will vary depending on the individual circumstances and the relationship between
the two parties previously established. Be sure to retain a signed copy when
received and send a photocopy of the completed agreement to the University of
California Patent Administrator, Office of Technology Transfer, Systemwide
Administration, 0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000)
Sincerely yours,
ACCEPTED:
RESEARCH INVESTIGATOR
----------------------
Printed Name
----------------------
(Signature)
----------------------
Date
RESEARCH UNIVERSITY OR
NON-PROFIT INSTITUTION
----------------------
Printed Name
-----------------------
(Signature)
-----------------------
Date
48
SCHEDULE B - PAGE 1B
The PRINCIPAL INVESTIGATORS listed below understand and agree to abide by
the terms and conditions of Articles 16 (MAINTENANCE OF THE BIOLOGICAL
MATERIALS) and 29 (FULL DISCLOSURE) of the License Agreement between The Regents
of the University of California and Imagenetics Incorporated effective
July 01, 1994 and to instruct all relevant personnel
working within their laboratory to act accordingly. Said paragraph reads, in
part, as follows:
16.1 THE REGENTS AGREES TO INSTRUCT THE PRINCIPAL INVESTIGATORS THAT WHEN
CIRCULATING REPLICABLE BIOLOGICAL MATERIALS COMPRISING RESEARCH INFORMATION
THAT HAVE NOT BEEN RELEASED IN AN UNRESTRICTED MANNER TO THIRD PARTIES TO
DO SO UNDER THE TERMS AND CONDITIONS SET FORTH IN THE BIOLOGICAL MATERIAL
TRANSMISSION LETTER ATTACHED HERETO AS APPENDIX A.
By /s/ Xxx X. Xxxx 5/24/94
--------------------- --------------------
Xxx X. Xxxx Date
By /s/ Xxxxxx Xxxxxx 5-31-94
--------------------- --------------------
Xxxxxx Xxxxxx Date
By /s/ Xxxxx Xxxxxxxxxxx 5/24/94
--------------------- --------------------
Xxxxx Xxxxxxxxxxx Date
By /s/ Xxxxxxx Xxxxxxx 5/24/94
--------------------- --------------------
Xxxxxxxx Xxxxxxx Date
By /s/ Xxxx Xxxxxxxxx 5/25/94
--------------------- --------------------
Xxxx Xxxxxxxxx Date
By /s/ Xxxxx Xxxxxx 5/31/94
--------------------- --------------------
Xxxxx Xxxxxx Date
By /s/ Xxxxxx Xxxxxx 5/24/94
--------------------- --------------------
Xxxxxx Xxxxxx Date
49
SCHEDULE C - PAGE 1C
Chancellor Xxxxxx X. Xxxxxx of the University of California at San
Francisco has read and approved the terms and conditions of the license
agreement titled EXCLUSIVE LICENSE AGREEMENT FOR INVENTIONS MADE IN THE FIELD OF
MOLECULAR CYTOGENETICS.
By /s/ Xxxxxx X. Xxxxxx 7/15/94
---------------------------------- ---------------
Chancellor Xxxxxx X. Xxxxxx Date
50
