LICENSE AGREEMENT
THIS AGREEMENT, effective as of September 1, 1994 (EFFECTIVE DATE) between
THE GENERAL HOSPITAL CORPORATION, a not-for-profit corporation doing business as
Massachusetts General Hospital, having a place of business at Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 ("GENERAL") and Packard Instrument Company, Inc. a
corporation having offices at 000 Xxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000
("COMPANY").
WITNESSETH
WHEREAS, under research programs funded by the GENERAL, the GENERAL
through research conducted by Drs. Xxxxx X. Xxxxxx and Xxxxxxx Hoop, Jr., has
developed an invention pertaining to A Method and Apparatus for Ligand
Detection;
WHEREAS, GENERAL has obtained U.S. Patent Number 4,626,513 covering said
invention and all Drs. Xxxxxx'x and Hoop's rights, title and interest in said
patent have been assigned to GENERAL;
WHEREAS, GENERAL represents to the best of its knowledge and belief that it
is the owner of all rights, title and interest in said patent and has the right
and ability to grant the license hereinafter described;
WHEREAS, as a center for research and education, GENERAL is interested in
licensing PATENT RIGHTS and thus benefiting the public and the GENERAL by
facilitating the dissemination of the results of its research in the form of
useful products, but is without capacity to commercially develop, manufacture,
and distribute any such product; and
WHEREAS, COMPANY having such capacity, desires to commercially develop,
manufacture, use and distribute such products throughout the world;
NOW THEREFORE, in consideration of the premises and of the faithful
performance of the covenants herein contained, the parties hereto agree as
follows:
1. DEFINITIONS
1.1 The term "ACCOUNTING PERIOD" shall mean each six month period ending
June 30 and December 31.
1.2 The term "AFFILIATE" shall mean any corporation or other legal entity
other than COMPANY in whatever country organized, controlling, controlled by or
under common control with COMPANY. The term "control" means possession, direct
or indirect, of the powers to direct or cause the direction of the management
and policies of an entity, whether through the ownership of voting securities,
by contract or otherwise.
1.3 The term "LICENSE FIELD" shall mean research and clinical diagnostics,
but shall not include diagnostic methods for the detection of substances in
living patients wherein the PRODUCT is used in an enclosed system which is in
direct contact with the patients.
1.4 The term "FIRST COMMERCIAL SALE" shall mean in each country the first
sale of any PRODUCT by COMPANY, its AFFILIATES or SUBLICENSEES, (a) following
approval, when such approval is necessary, of the marketing of such product by
the appropriate governmental agency for the country in which the sale is to be
made, or (b) when such government approval is not required in a country, the
first sale of such product in that country.
1.5 The term, "SUBLICENSEE" shall mean any non-AFFILIATE third party
licensed by COMPANY or by an AFFILIATE to make, have made, use or sell any
PRODUCT.
1.6 The term "NET SALES PRICE" shall mean the GROSS SALES PRICE as defined
in (b) below, of any PRODUCT less, to the extent appropriately documented:
(a) (i) credits and allowances for price adjustment, rejection, or return of
PRODUCTS previously sold;
(ii) rebates and cash discounts to purchasers allowed and taken;
(iii) amounts for transportation, insurance, handling or shipping charges
to purchasers;
(iv) taxes, duties and other governmental charges levied on or measured by
the sale of PRODUCTS, whether absorbed by COMPANY or paid by the
purchaser so long as COMPANY'S price is reduced thereby, but not
franchise or income taxes of any kind whatsoever;
(v) for any sale in which the United States government on the basis of
its royalty-free license pursuant to 35 USC Sec. 202(C) to any PATENT
RIGHT (4) requires that the GROSS SALES PRICE of any PRODUCT subject
to such PATENT RIGHT, be reduced by the amount of such royalty owed
GENERAL pursuant to paragraph 3.1, the amount of such royalty.
(b) For any bona fide sale to a bona fide customer by COMPANY or any of
its AFFILIATES or SUBLICENSEES ("SELLERS"), the GROSS SALES PRICE shall be
[* * *].
(c) If COMPANY or any of its AFFILIATES or SUBLICENSEES sell any PRODUCT in
a bona fide sale as a component of a combination of active functional elements,
the GROSS SALES PRICE of the PRODUCT shall be determined by multiplying the
GROSS SALES PRICE of the combination by [* * *].
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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[* * *] In the event that no separate sale of either such PRODUCT or active
elements of the combination is made during said ACCOUNTING PERIOD in said
country, the GROSS SALES PRICE of the PRODUCT shall be determined by
multiplying [***] such costs being arrived at using the standard
accounting procedures of COMPANY which will be in accord with generally
accepted accounting practices.
(d) If a SELLER commercially uses or disposes of any PRODUCT by itself (as
opposed to a use or disposition of the PRODUCT as a component of a combination
of active functional elements) other than in a bona fide sale to a bona fide
customer, the GROSS SALES PRICE shall be the price which would be then payable
in an arm's length transaction. If a SELLER commercially uses or disposes of any
PRODUCT as a component of a combination of active functional elements other than
in a bona fide sale to a bona fide customer, the GROSS SALES PRICE of the
PRODUCT shall be determined in accordance with paragraph (c) above, using as the
GROSS SALES PRICE of the combination that price which would be then payable in
an arm's length transaction.
(e) Transfer of a PRODUCT within COMPANY or between COMPANY and an AFFILIATE
for sale by the transferee shall not be considered a sale, commercial use or
disposition for the purpose of the foregoing paragraphs; in the case of such
transfer the GROSS SALES PRICE shall be based on sale of the PRODUCT by the
transferee.
1.7 The term "PATENT RIGHT" shall mean U.S. Patent Number 4,626,513, awarded
to Drs. Xxxxx X. Xxxxxx and Xxxxxxx Hoop, Jr. entitled Method and Apparatus for
Ligand Detection, or the equivalent of such applications, including any reissue,
continuation, reexamination or extension thereof.
1.8 The term "PRODUCT" shall mean any article, device, composition, method or
service, the manufacture, use, or sale of which absent the licenses granted
herein, would infringe a VALID CLAIM of any PATENT RIGHT.
1.9 The term "VALID CLAIM" shall mean any claim of any PATENT RIGHT that has
not been (i) finally rejected or (ii) declared invalid by a patent office or
court of competent jurisdiction in any unappeased and unappealable decision.
1.10 The term "RESELLING SUBLICENSEE" shall mean a non-AFFILIATE third party
to whom COMPANY, an AFFILIATE or a MANUFACTURING SUBLICENSEE sells PRODUCT for
the purpose of reselling PRODUCT to END USERS.
1.11 The term "MANUFACTURING SUBLICENSEE" shall mean a SUBLICENSER licensed
by COMPANY or its SUBLICENSEE solely (except in the case contemplated under
paragraph 5.1(c) below) to make or have made any PRODUCT and to sell PRODUCT to
a RESELLING SUBLICENSEE.
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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1.12 The term "MARKETING SUBLICENSEE" shall mean a SUBLICENSEE, other than a
RESELLING SUBLICENSEE, licensed by COMPANY to make, have made, use or sell any
PRODUCT.
1.13 The term "END USER" shall mean a person who uses a PRODUCT for a purpose
that would, absent the licenses granted hereunder, infringe a VALID CLAIM of any
PATENT RIGHT.
2. LICENSE
2.1 GENERAL hereby grants COMPANY, to the extent not prohibited by the United
States Government:
(a) an exclusive, royalty-bearing license in the LICENSE FIELD under GENERAL's
rights in PATENT RIGHTS to make, have made, use and sell PRODUCTS;
(b) to the extent an exclusive license is not available to COMPANY in the
United States, a non-exclusive, royalty-bearing license in the LICENSE FIELD
under PATENT RIGHTS to make, have made, use and sell PRODUCTS;
(c) the right to sublicense PATENT RIGHTS licensed to COMPANY, provided that,
in the event the license becomes non-exclusive by operation of paragraph 3.1,
COMPANY shall not have the right to sublicense said PATENT RIGHTS.
All licenses pursuant to this paragraph 2.1 are subject to the rights,
conditions and limitations imposed by U.S. law with respect to inventions made
in the performance of federally funded research.
The above licenses to sell PRODUCTS include the right to grant to the
purchaser of products from COMPANY, its AFFILIATES, and SUBLICENSERS the right
to use such purchased PRODUCTS in a method coming within the scope of PATENT
RIGHT.
2.2 The granting of any license hereunder is subject to GENERAL's right to
make and to use the subject matter described and claimed in PATENT RIGHT for
research and clinical purposes but for no other purpose.
2.3 GENERAL shall have the right to license any PATENT RIGHT to any other
party for the purpose of manufacturing, using or selling of any PRODUCT outside
of the LICENSE FIELD.
2.4 It is understood that nothing herein shall be construed to grant COMPANY
a license express or implied under any patent owned solely or jointly by
General other than the PATENT RIGHTS expressly licensed hereunder.
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3. DUE DILIGENCE OBLIGATIONS
3.1 COMPANY shall itself, or through its AFFILIATES or SUBLICENSEES, use its
best efforts to develop and make commercially available PRODUCTS for commercial
sales and distribution in the United States market on or before December 31,
1994, provided, however, that GENERAL shall not unreasonably withhold its
consent to any revision in such time period whenever requested in writing by
COMPANY and supported by evidence of technical difficulties or delays that the
parties could not have reasonably avoided. Failure to achieve the above
objective within the above stated time periods or within any extension granted
by GENERAL shall result in GENERAL having the right to cancel upon thirty (30)
days notice any exclusive license granted hereunder or convert any exclusive
license to a non-exclusive license.
3.2 At intervals no longer than every six (6) months, COMPANY shall report in
writing to GENERAL on progress made toward the foregoing objective.
4. FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHT
4.1 GENERAL shall be responsible for the maintenance of the patent included
in PATENT RIGHTS. COMPANY shall reimburse GENERAL for all reasonable costs
("Costs") incurred by GENERAL for the preparation, filing, prosecution and
maintenance of all PATENT RIGHTS as follows:
Subject to paragraph 4.2, for all Costs incurred by GENERAL from and after the
EFFECTIVE DATE, COMPANY shall reimburse GENERAL upon receipt of invoices from
GENERAL, provided that, if any license granted pursuant to Section 2 shall
become nonexclusive and GENERAL shall license any PATENT RIGHT to another
licensee, costs shall thereafter be allocated by GENERAL among COMPANY and such
additional licensees on an equitable basis;
4.2 With respect to any PATENT RIGHT, each document or a draft thereof
pertaining to the maintenance of such PATENT RIGHT, and request for reissue or
reexamination of the PATENT RIGHT shall be provided to COMPANY as follows.
Documents received from any patent office or counsels analysis thereof shall be
provided promptly after receipt. For a document to be filed in any patent
office, a draft of such document shall be provided sufficiently prior to its
filing, to allow for review and comment by the other party. If as a result of
the review of any such document, COMPANY shall elect not to pay or continue to
pay the Costs for such PATENT RIGHT, COMPANY shall so notify GENERAL within
thirty (30) days of COMPANY's receipt of such document and COMPANY shall
thereafter be relieved of the obligation to pay any additional Costs regarding
such PATENT RIGHT incurred after the receipt of such notice by GENERAL. Such
patent application or patent shall thereupon cease to be a PATENT RIGHT
hereunder and GENERAL shall be free to license its rights to that particular
patent application or patent to any other party on any terms.
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5. ROYALTIES
5.1 Beginning with the FIRST COMMERCIAL SALE in any country, on all sales of
PRODUCTS anywhere in the world by COMPANY, its AFFILIATES or SUBLICENSEES,
COMPANY shall pay GENERAL royalties in accordance with the following schedule,
such undertaking and schedule having been agreed to for the purpose of
reflecting and advancing the mutual convenience of the parties. For each PRODUCT
sold by COMPANY or its AFFILIATES and SUBLICENSEES;
(a) So long as the PRODUCT, its manufacture, use or sale is covered by a VALID
CLAIM of any PATENT RIGHT licensed exclusively to COMPANY;
(i) For sales to END USERS by COMPANY, its AFFILIATES, and its MARKETING
SUBLICENSEES, [* * *] of NET SALES PRICE.
(ii) For sales to RESELLING SUBLICENSEES by COMPANY, its AFFILIATES and its
MANUFACTURING SUBLICENSEES, [* * *] of all revenues, including without
limitations royalties, license fees and milestone payments, received by
COMPANY, its AFFILIATES and MANUFACTURING SUBLICENSEES from said
RESELLING SUBLICENSEES with respect to sale of PRODUCT by said RESELLING
SUBLICENSEES.
(b) Whenever the PRODUCT, its manufacture, use or sale is covered by a VALID
CLAIM of any PATENT RIGHT licensed non-exclusively to COMPANY, the royalty rates
shall be [* * *] those specified in 5.1 (a) for each type of sale specified
therein.
(c) In the event that a MANUFACTURING SUBLICENSEE is also a RESELLING
SUBLICENSEE, GENERAL shall be due the same royalties hereunder as would have
been due had the MANUFACTURING SUBLICENSEE and RESELLING SUBLICENSEE been two
non-affiliated entities, and unless otherwise agreed by the parties said
royalties shall be calculated on the basis of the price last paid by RESELLING
SUBLICENSEE to COMPANY in a good faith, arms length transaction.
5.2 (a) In the event that more than one royalty rate under paragraph 5.1 is
applicable to a PRODUCT, the highest of the applicable royalties shall apply.
(b) Only one royalty under paragraph 5.1 shall be due and payable to GENERAL
by COMPANY for any PRODUCT regardless of the number of PATENT RIGHTS covering
such PRODUCT.
5.3 If any license granted pursuant to Section 2 shall be or become
non-exclusive, for example, because of any action by the U.S. government, and
GENERAL shall license any PATENT RIGHT to another licensee for the purpose of
making, using or selling PRODUCTS in the LICENSE FIELD and accept a royalty or
royalties more favorable to such licensee than herein provided for COMPANY,
GENERAL shall give written notice thereof to
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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COMPANY and as of the EFFECTIVE DATE of such more favorable royalty or
royalties, COMPANY's obligation hereunder to pay royalty or royalties to GENERAL
shall be revised to the more favorable rate.
5.4 In addition to the royalties provided for above, COMPANY shall pay
GENERAL [* * *] of any and all non-royalty income, including
without limitation license fees and milestone payments, received from its
AFFILIATES and MARKETING SUBLICENSEES in consideration for the sublicensing of
any right or license granted to COMPANY hereunder.
5.5 In addition to the payments provided for in paragraphs 5.1 and 5.4,
COMPANY shall pay GENERAL [* * *].
5.6 In the event that the royalty paid to GENERAL is a significant factor in
the return realized by COMPANY so as to diminish COMPANY's capability to respond
to competitive pressures in the market, GENERAL agrees to consider a reasonable
reduction in the royalty paid to GENERAL as to each such PRODUCT for the period
during which such market condition exists. Factors determining the size of the
reduction will include profit margin on PRODUCT and on analogous products,
prices of competitive products, total prior sales by COMPANY, and COMPANY's
expenditures in PRODUCT development.
5.7 The payments due under this Agreement shall, if overdue, bear
interest until payment at a per annum rate equal to [* * *] above the prime
rate in effect at the Bank of Boston on the due date, not to exceed the
maximum permitted by law. The payment of such interest shall not preclude
GENERAL from exercising any other rights it may have as a consequence of the
lateness of any payment.
6. REPORTS AND PAYMENTS
6.1 COMPANY shall keep, and shall cause each of its AFFILIATES and
SUBLICENSEES, if any, to keep full and accurate books of accounts containing all
particulars that may be necessary for the purpose of calculating all royalties
payable to GENERAL. Such books of account shall be kept at their principal place
of business and, with all necessary supporting data shall, during all reasonable
times for the three (3) years next following the end of the calendar year to
which each shall pertain be open for inspection at reasonable times by GENERAL
or its designee at GENERAL's expense for the purpose of verifying royalty
statements or compliance with this Agreement.
6.2 In each year the amount of royalty due shall be calculated semiannually
as of the end of each ACCOUNTING PERIOD and shall be paid semiannually within
the sixty (60) days next following such date, every such payment to be supported
by the accounting prescribed in paragraph 6.3 and to be made in United States
currency. Whenever conversion from any foreign currency shall be required, such
conversion shall be at the rate of exchange thereafter published in the Wall
Street Journal for the business day closest to the end of the applicable
ACCOUNTING PERIOD.
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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6.3 With each semiannual payment, COMPANY shall deliver to GENERAL a full
and accurate accounting to include at least the following information:
(a) Quantity of each PRODUCT sold or leased (by country) by COMPANY, and its
AFFILIATES or SUBLICENSEES;
(b) Total xxxxxxxx for each PRODUCT (by country);
(c) Quantities of each PRODUCT used by COMPANY and its AFFILIATES or
SUBLICENSEES;
(d) Names and addresses at all SUBLICENSEES of COMPANY; and
(e) Total royalties payable to GENERAL.
7. INFRINGEMENT
7.1 GENERAL will protect its PATENT RIGHTS from infringement and prosecute
infringers when, in its sole judgement, such action may be reasonably necessary,
proper and justified.
7.2 If COMPANY shall have supplied GENERAL with written evidence demonstrating
to GENERAL's reasonable satisfaction prima facie infringement of a claim of a
PATENT RIGHT by a third party, COMPANY may by notice request GENERAL to take
steps to protect the PATENT RIGHT. GENERAL shall notify COMPANY within three (3)
months of the receipt of such notice whether GENERAL intends to prosecute the
alleged infringement. If GENERAL notifies COMPANY that it intends to so
prosecute, GENERAL shall, within three (three) months of its notice to COMPANY
either (i) cause infringement to terminate or (ii) initiate legal proceedings
against the infringer. In the event GENERAL notifies COMPANY that GENERAL does
not intend to prosecute said Infringement COMPANY may, upon notice to GENERAL,
initiate legal proceedings against the infringer at COMPANY's expense and in
GENERAL's name if so required by law. No settlement, consent judgment or other
voluntary final disposition of the suit which invalidates or restricts the
claims of such PATENT RIGHTS may be entered into without the consent of GENERAL,
which consent shall not be unreasonable withheld. COMPANY shall indemnify
GENERAL against any order for payment that may be made against GENERAL in such
proceedings.
7.3 In the event one party shall initiate or carry on legal proceedings to
enforce any PATENT RIGHT against any alleged infringer, the other party shall
fully cooperate with and supply all assistance reasonably requested by the party
initiating or carrying on such proceedings. The party which institutes any suit
to protect or enforce a PATENT RIGHT shall have sole control of that suit and
shall bear the reasonable expenses (excluding legal fees) incurred by said other
party in providing such assistance and cooperation as is requested pursuant to
this paragraph. The party initiating or carrying on such legal proceedings shall
keep the other party informed of the progress of such proceedings and said other
party shall be entitled to counsel in such proceedings but at its own expense.
Any award paid by third parties as the result
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of such proceedings (whether by way of settlement or otherwise) shall first be
applied to reimbursement of the unreimbursed legal fees and expenses incurred by
either party and then the remainder shall be divided between the parties as
follows:
[* * *]
7.4 For the purpose of the proceedings referred to in this Article 7, the
GENERAL and COMPANY shall permit the use of their names and shall execute such
documents and carry out such other acts as may be necessary. The party
initiating or carrying on such legal proceedings shall keep the other party
informed of the progress of such proceedings and said other party shall be
entitled to counsel in such proceedings but at its own expense, said expenses to
be off-set against any damages received by the party bringing suit in accordance
with the foregoing paragraph 7.3.
8. INDEMNIFICATION
8.1 (a) COMPANY shall indemnify, defend and hold harmless GENERAL and its
trustees, officers, medical and professional staff, employees, and agents and
their respective successors, heirs and assigns (the "Indemnitees"), against any
liability, damage, loss or expense (including reasonable attorney's fees and
expenses of litigation) incurred by or imposed upon the Indemnitees or any one
of them in connection with any claims, suits, actions, demands or judgments
arising out of [* * *].
(b) Licensees' indemnification under (a) above shall not apply to any
liability, damage, loss or expense to the extent that it is directly
attributable to [* * *].
(c) COMPANY agrees, at its own expense to provide attorneys reasonably
acceptable to the GENERAL to defend against any actions brought or filed against
any party indemnified hereunder with respect to [* * *].
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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(d) This paragraph 8.1 shall survive expiration or termination of this
Agreement.
8.2 (a) At such time as any product, process or service relating to,
or developed pursuant to, this Agreement is being commercially distributed
or sold (other than for the purpose of obtaining regulatory approvals) by
COMPANY or by a licensee, affiliate or agent of COMPANY, COMPANY shall, at
its sole cost and expense, procure and maintain comprehensive general
liability insurance in amounts not less than [* * *]. Such comprehensive
general liability insurance shall provide [* * *]. If COMPANY elects to
self-insure all or part of the limits described above (including
deductibles or retentions which are in excess of $250,000 annual
aggregate) such self-insurance program must be acceptable to the
GENERAL and the Risk Management Foundation. The minimum amounts of
insurance coverage required under this paragraph 8.2 shall not be
construed to create a limit of COMPANY's liability with respect to
its indemnification under paragraph 8.1 of this Agreement.
(b) COMPANY shall provide GENERAL with written evidence of such insurance upon
request of GENERAL. COMPANY shall provide GENERAL with written notice at least
fifteen (15) days prior to the cancellation, non-renewal or material change in
such insurance; if COMPANY does not obtain replacement insurance providing
comparable coverage prior to the expiration of such fifteen (15) day period,
GENERAL shall have the right to terminate this Agreement effective at the end of
such fifteen (15) day period without notice or any additional waiting periods.
(c) COMPANY shall maintain such comprehensive general liability insurance
beyond the expiration or termination of this Agreement during (i) the period
that any product, process, or service, relating to, or developed pursuant to,
this Agreement is being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by COMPANY or by a licensee,
affiliate or agent of COMPANY and (ii) a reasonable period after the period
referred to in (c) (i) above which in no event shall be less than fifteen (15)
years.
(d) This paragraph 8.2 shall survive expiration or termination of this
Agreement.
8.3 OTHER THAN WARRANTIES SET FORTH HEREIN, GENERAL MAKES NO WARRANTY, EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH
PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO SPONSOR
HEREUNDER AND HEREBY DISCLAIMS THE SAME.
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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9. TERMINATION
9.1 Unless otherwise terminated as provided for in this Agreement, the license
to PATENT RIGHT granted hereunder will continue:
(a) for one (1) year after the date COMPANY, its AFFILIATES, or SUBLICENSEES
shall last sell any PRODUCT, provided such sale is not prevented by force
majeure, government regulation or intervention, or institution of a law suit by
any third party, or
(b) until the last to expire of any PATENT RIGHT, the claims of which but for
this Agreement would be infringed by the manufacture, use or sale of any
PRODUCT, whichever shall first occur.
9.2 If either party shall fail to faithfully perform any of its material
obligations under this Agreement except the due diligence milestones specified
in Section 3 herein, the nondefaulting party may give written notice of the
default to the defaulting party. Unless such default is corrected within thirty
(30) days after such notice, the notifying party may terminate this Agreement
and the license hereunder upon thirty (30) days prior written notice, provided
that only one such thirty (30) day grace period shall be available in any twelve
(12) month period with respect to a default of any particular provision
hereunder. Thereafter notice of default of said provision shall constitute
termination.
9.3 In the event that any license granted to COMPANY under this Agreement is
terminated, any sublicense under such license granted prior to termination of
said license shall remain in full force and effect, provided that:
(a) the SUBLICENSEE is not then in breach of its sublicense agreement;
(b) the SUBLICENSEE agrees to be bound to GENERAL as the licensor under the
terms and conditions of this sublicense agreement, as modified by the provisions
of this paragraph 10.9;
(c) the SUBLICENSEE, at GENERAL's written request, assumes in a signed writing
the same obligations to GENERAL as those assumed by COMPANY under Articles 8 and
10 hereof;
(d) GENERAL shall have the right to receive the greater of (a) any payments
payable to COMPANY under such sublicense agreement to the extent they are
reasonably and equitably attributable to such SUBLICENSEE's right under such
sublicense to use and exploit PATENT RIGHTS or (b) the lowest royalty which is
within the "Competitive" range as hereinafter defined, at the time GENERAL's
license to COMPANY is terminated. A royalty rate shall be regarded as
"Competitive" if it is within the range of royalty rates that GENERAL would
charge in an arms length transaction with a licensee which was not and had not
been a sponsor of research at GENERAL, taking into account the value of the
licensed technology at the time GENERAL's license to COMPANY is terminated;
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(e) the SUBLICENSEE agrees to be bound by the due diligence obligations of
COMPANY pursuant to paragraph 3.1 hereof (whether set by the parties or by
arbitration) in the field and territory of the sublicense;
(f) GENERAL has the right to terminate such sublicense upon fifteen (15) days
prior written notice to COMPANY and such SUBLICENSEE in the event of any
material breach of the obligation to make the payments described in clause (iv)
of this paragraph 9.3, unless such breach is cured prior to the expiration of
such fifteen (15) day period, and shall further have the right to terminate such
sublicense in the event of SUBLICENSEE's failure to meet its due diligence
obligations pursuant to clause (v) hereof;
(g) GENERAL shall not assume, and shall not be responsible to such SUBLICENSEE
for, any representations, warranties or obligations of COMPANY to such
SUBLICENSEE, other than to permit such SUBLICENSEE to exercise any rights to
PATENT RIGHTS that are granted under such sublicense agreement consistent with
the terms of this AGREEMENT.
9.4 Upon termination of any license granted hereunder COMPANY shall pay
GENERAL all royalties due or accrued on (i) the sale of PRODUCT up to and
including the date of termination and (ii) for twelve (12) months following the
date of termination, the sale of PRODUCT manufactured prior to the termination
date.
10. MISCELLANEOUS
10.1 This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof.
10.2 In order to facilitate implementation of this Agreement, GENERAL and
COMPANY are designating the following individuals to act on their behalf with
respect to this Agreement for the matter indicated below:
(a) with respect to all royalty payments, any correspondence pertaining to
any PATENT RIGHT, or any notice of the use of GENERAL's name, for GENERAL, the
Director, Office of Technology Affairs, and for COMPANY, the Vice President of
Marketing/Business Development.
(b) any amendment of or waiver under this Agreement, any written notice
including progress reports or other communication pertaining to the Agreement:
for GENERAL, the Director, Office of Technology Affairs, and for COMPANY, the
Vice President of Marketing/Business Development.
(c) the above designations may be superseded from time to time by alternative
designations made by: for GENERAL, the General Director, and for COMPANY, the
President.
10.3 This Agreement may be amended and any of its terms or conditions may be
waived only by a written instrument executed by the parties or, in the case of a
waiver, by the
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party waiving compliance. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect its rights
at a later time to enforce the same. No waiver by either party of any condition
shall be deemed as a further or continuing waiver of such condition or term or
of any other condition or term.
10.4 This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
10.5 Any delays in or failures of performance by either party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to: Acts of God; acts, regulations or laws
of any government; strikes or their concerted acts of worker; fires; floods;
explosions; riots; wars; rebellion; and sabotage. Any time for performance
hereunder shall be extended by the actual time of delay caused by such
occurrence.
10.6 Neither party shall use the name of the other party or of any staff
member, officer, employee or student of the other party or any adaptation
thereof in any advertising, promotional or sales literature, publicity or in any
document employed to obtain funds or financing without the prior written
approval of the party or individual whose name is to be used. For GENERAL, such
approval shall be obtained from the Director of Public Affairs.
10.7 This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
10.8 This Agreement shall not be assignable by GENERAL without COMPANY'S
written consent except for the right to receive royalties payable herein.
COMPANY may at its own discretion and without approval by GENERAL transfer its
interest or any part thereof under this Agreement to a wholly-owned subsidiary
or any assignee or purchaser of the portion of its business associated with the
manufacture and sale of PRODUCT. In the event of any such transfer, the
transferee shall assume and be bound by the provisions of this Agreement.
Otherwise this Agreement shall be assignable by COMPANY only with the consent in
writing of GENERAL.
10.9 For any and all claims, disputes, or controversies arising under, out of,
or in connection with this Agreement, except issues relating to the validity,
construction or effect of any PATENT RIGHT, which the parties shall be unable to
resolve within sixty (60) days, the party raising such dispute shall promptly
advise the other party of such claim, dispute, or controversy in a writing which
describes in reasonable detail the nature of such dispute. By not later than
five (5) business days after the recipient has received such notice of dispute,
each party shall have selected for itself a representative who shall have the
authority to bind such party and shall additionally have advised the other party
in writing of the name and title of such representative. By not later than ten
(10) business days after the date of such notice of dispute, such
representatives shall agree upon a third party which is in the business of
providing Alternative Dispute Resolution (ADR) services (hereinafter, "ADR
Provider") and shall schedule a date with such ADR Provider to engage in ADR.
Thereafter, the representative of the parties shall engage in good faith in an
ADR process under the auspices of the selected ADR Provider. If within the
aforesaid thirty (30) business days after the date of the notice of dispute the
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representatives of the parties have not been able to agree upon an ADR Provider
and schedule a date to engage in ADR, or if they have not been able to resolve
the dispute within thirty (30) business days after the termination of ADR, the
parties shall have the right to pursue any other remedies legally available to
resolve such dispute in either the Courts of the Commonwealth of Massachusetts
or in the United States District Court for the District of Massachusetts, to
whose jurisdiction for such purposes GENERAL and COMPANY hereby irrevocably
consents and submits. Notwithstanding the foregoing, nothing in this Paragraph
10.19 shall be construed to waive any rights or timely performance of any
obligations existing under this Agreement.
10.10 If any provision(s) of this Agreement are or become invalid, are ruled
illegal by any court of competent jurisdiction or are deemed unenforceable under
then current applicable law from time to time in effect during the term hereof,
it is the intention of the parties that the remainder of this agreement shall
not be effected thereby. It is further the intention of the parties that in lieu
of each such provision which is invalid, illegal or unenforceable, there be
substituted or added as part of this Agreement a provision which shall be as
similar as possible in economic and business objectives as intended by the
parties to such invalid, illegal or enforceable provision, but shall be valid,
legal and enforceable.
THE PARTIES have duly executed this Agreement as of the date first
shown above written.
COMPANY THE GENERAL HOSPITAL CORPORATION
BY /S/ XXXXXXX XXXXXXXX BY /S/ XXXXXX X. XXXXXXX, X.X.
------------------------------ --------------------------------
TITLE PRESIDENT TITLE V.P., Patents, Licensing and
--------------------------- Industry Sponsored Research
-----------------------------
DATE OCT. 4, 1994 DATE 10/6/94
-------------------------- ------------------------------
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