EXHIBIT 10.23
LICENSE AGREEMENT
THIS AGREEMENT is made and entered into as of October 7, 1996 by and
between BioMolecular Assays, Inc. ("BMA"), a Massachusetts corporation with
principal offices at 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (as to
certain provisions hereof) and BioSeq, Inc. ("BioSeq"), a Massachusetts
corporation with principal offices at 00 Xxxxxxx Xxxxxx, Xxxx #X, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000; and Boston Biomedica, Inc. a Massachusetts corporation
with principal offices at 000 Xxxx Xxxxxx, Xxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
("BBI").
WHEREAS, BMA is the owner of all right, title and interest in and to
the BMA Patents (as defined below) and the Technology (as defined below) related
thereto;
WHEREAS, BioSeq has obtained from BMA an exclusive, worldwide right and
license under the BMA Patents and the Technology, in accordance with the terms
of a certain License Agreement dated October 7, 1996 (the "BMA License");
WHEREAS, pursuant to the BMA License BioSeq has developed a prototype
instrument (the "Instrument") to be used for nucleic acid (DNA and RNA)
sequencing and analysis (the "Field");
WHEREAS, BBI wishes to obtain an exclusive, worldwide right and license
as provided herein, under the BMA Patents and Technology, to operate a
fee-for-service laboratory using the Instrument and associated "pressure cycling
reactor" technology within the Field; and BioSeq is willing to grant BBI such a
license in accordance with the terms of this Agreement, and BMA is willing to
join in and confirm the validity of such license;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledge, the parties hereto agree as
follows:
1. Definitions.
1.1. "Affiliate" shall mean, at any time, any person or legal entity
then directly or indirectly controlled by, controlling or under
common control with the party with respect to which this term is
associated.
1.2. "BMA Patents" shall mean those patents and patent applications
identified on schedule 1.2 hereto, and any and all divisions,
continuations, continuations-in-part, extensions, substitutions,
reissues, re-examinations or additions of or to any of the
foregoing, and any patents which issue from any of the foregoing
applications, and any foreign counterparts of the foregoing
currently or in the future filed or issued and not specifically
listed
on Schedule 1.2 hereto, and any other patents, patent applications
and the like of BMA that are necessary or appropriate to make,
use, sell, offer for sale or otherwise practice the Technology.
1.3. "Field" shall mean nucleic acid (DNA and RNA) sequencing and
analysis.
1.4. "Instrument" means a device using the BMA Patents and Technology
to perform nucleic acid (DNA and RNA) sequencing and analysis.
1.5. "Net Revenues" shall mean the amounts billed or invoiced (or if
not invoiced or billed, the amounts received) by BBI for Services
within the Field using the BMA Patents or Technology, less (a) the
amounts of actual trade and cash discounts and rebates given with
respect to services that were not already credited at the time of
invoice, (b) actual credited allowances on account of refunds or
price adjustments with respect to Services that were not already
credited at the time of invoice, (c) sales taxes, excise taxes,
import/export duties and rebates (including rebates to third party
payers) actually paid with respect to Services, and (d) other
reasonable and customary allowances actually credited to
customers, provided that if BBI provides any such Service to any
party other than to an independent third party in a bona fide
arm's length transaction, Net Revenues shall be based upon the
resale to an independent third party in an arm's length
transaction by the entity to which such Service was sold by BBI
or, if there is no such resale, Net Revenues shall be calculated
as above on the fair market price in the relevant country of sale
or transfer. If a transaction involves goods or services other
than Services, then Net Revenues shall be the product of (a) the
overall amount charged by BBI with respect to the transaction and
(b) a fraction which shall reflect the fair market value of the
Services as a component of the transaction relative to the overall
amount charged by BBI with respect to the transaction.
1.6. "Services" shall mean providing laboratory services as an
independent reference laboratory to third persons, using the BMA
Patents and Technology within the Field. "Services" shall include
all work in connection with preparation of samples for analysis by
an Instrument, and analysis of the information and data produced
as a result of the analysis by an Instrument. An "independent
reference laboratory" is a commercial laboratory unaffiliated, and
dealing on an arms-length basis, with its customers, which
provides high volume testing of samples received from customers
and which reports on results of that testing.
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1.7. "Technology" shall mean all know-how, proprietary information or
special knowledge of BMA and BioSeq related to Instruments and
Services and involving nucleic acid sequencing and analysis, as it
may be modified or improved during the term hereof.
1.8. "Valid Claim" shall mean a claim of an issued an unexpired patent
within the BMA Patents which would be infringed by the provisions
of Services and which shall not have been withdrawn, canceled,
disclaimed or held invalid by a court of competent jurisdiction in
an unappealed or unappealable decision.
2. License and Rights
2.1. License. BMA and BioSeq each (as its rights may appear) hereby
grants to BBI an exclusive, worldwide right and license under the
BMA Patents and the Technology (the "License) to use the
Instrument, BMA Patents and Technology to provide Services to
third parties worldwide. BBI shall have no right to sublicense any
of the foregoing rights. The foregoing license shall become
effective upon the earlier of (a) payment in full by BBI of the
amount referenced in Section 1.2(iii) of a certain Preferred Stock
Purchase Agreement between the parties of even date, and (b)
December 31, 1997.
2.2. Equipment. BioSeq shall furnish one or (at BioSeq's sole
discretion) more Instruments to BBI, at no cost to BBI, at a
mutually agreeable site for the purpose of pre-commercial
evaluation and testing of the Instrument and its performance.
During the period in which the License remains exclusive (and
otherwise subject to the provisions of Section 8.2 below), BioSeq
will supply Instruments and associated equipment in such
quantities as may be requested by BBI to support its provision of
Services, upon such reasonable and customary terms of supply as
may be agreed between the parties and at a price equal to BioSeq's
fully-allocated cost of production of the items supplied. After
the License becomes non-exclusive, BioSeq will supply equipment to
BBI upon such reasonable and customary terms as may be agreed
between the parties and at prices no less favorable to BBI than
those at which BioSeq regularly sells such equipment to other
commercial, non-governmental Instrument purchasers. BioSeq shall
notify BBI of any improvements it makes to the Instruments and
offer BBI the opportunity to have its Instruments upgraded or
replaced to include these improvements at BBI's expense.
2.3. Supplies.During the period in which the License remains exclusive,
BBI shall have the right to purchase reagents and related supplies
from BioSeq,
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as reasonably required to run the laboratory and meet the demand
for Services, at a price equal to BioSeq's cost plus 35%.
Thereafter BBI may continue to purchase such reagents and supplies
at prices no less favorable to BBI than those at which BioSeq
regularly sells such reagents or supplies to other commercial,
non-governmental Instrument purchasers.
2.4 Improvements. BBI shall keep BioSeq fully advised of any
improvements by BBI or its Affiliates during the term of this
Agreement relating to the Technology, whether patentable or not
("BBI Improvements"). At the request of BioSeq, BBI shall grant to
BioSeq a non-exclusive royalty-free license to any such BBI
Improvements, with a right to sublicense.
3. Payments
3.1. Royalty. During the term of the License BBI shall pay to BioSeq a
royalty, at the rate stated below, on BBI's Net Revenues derived
from Services. If Services are performed in whole or in part in,
and are requested by a client or customer whose principal place of
business is located in, any country or countries in which there is
no Valid Claim under a BMA Patent, then the royalty rate otherwise
applicable to Net Revenues from those Services shall be reduced by
fifty percent (50%) with respect to Services provided more than
three years from the first commercial sale of Services hereunder
by BBI. Subject to any reduction pursuant to the foregoing
sentence, for so long as the License is exclusive (see Section 8.2
below) the royalty rate shall be 5% of Net Revenues during the
three year period commencing at the earlier of (a) the first
commercial sale of Services by BBI, or (b) the end of the one year
period following commencement of the License term, and shall
increase to 8% during the next two years and to 10% during each
year thereafter; provided that if the License becomes nonexclusive
the royalty for all Net Revenues relating to Services provided
after that date shall be reduced to zero and BBI shall be deemed
to hold a fully paid license hereunder from that date forward.
Royalties shall be payable thirty days following the last day of
March, June, September and December of each calendar year on
account of Net Revenues during the quarter ended on such last day.
3.2. Reports. BBI shall provide a royalty report to BioSeq within
thirty days after the end of each quarterly period referenced in
that last sentence of Section 3.1 hereof, covering all Net
Revenues and royalties earned during that period and showing all
other facts necessary to the calculation of amounts due. All
royalty payments shall also be accompanied by a royalty report.
All payments to BioSeq shall be in United States dollars. Royalty
payments based on Net Revenues in currencies other than United
States dollars shall be converted to United States
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dollars according to the average official rate of exchange for
that currency as published in The Wall Street Journal on the first
and last days of the calendar quarter in which that royalty
accrued (or, if not published on that day, the first and last
publication days for The Wall Street Journal during that quarter).
3.3. Books and Records and Audit. BBI shall maintain full, complete and
accurate books and records covering all transactions relating to
this Agreement, including information necessary to permit
calculation and verification of amounts due under Section 3.1
hereof. BioSeq shall at any time within one (1) year of any
payment be entitled to audit the books and records of BBI
pertaining to its payment obligations hereunder, for the sole
purpose of confirming the accuracy of the amounts stated to be due
on the royalty reports submitted to BioSeq under Section 3.1
hereof. Any such audit shall be performed during normal business
hours at BioSeq's expense by a firm of independent public
accountants acceptable to both BBI and BioSeq. The independent
agent shall report only such information as would properly be
included in such a report. If such audit reveals an underpayment
of five percent (5%) or greater of the amount that should have
been paid to BioSeq for the period audited, then BBI shall bear
the expense of the audit. In the event of any underpayment, BBI
shall promptly remit to BioSeq all amounts due, with interest on
late payments payable at the rate of ten percent (10%) per year
compounded annually.
4. Patents. BioSeq shall keep BBI fully informed of all developments
in regard to the preparation, filing, prosecuting, and maintenance
of the BMA Patents and shall, to the extent practicable, provide
BBI, for comment, with pre-filing copies of any materials relating
to BMA Patents filed with any patent office worldwide. BioSeq
shall reimburse BMA for its reasonable external (out-of-pocket)
costs arising out of actions occurring after the date of this
Agreement in connection with the preparation, filing, prosecution
and maintenance of BMA Patents.
5. Representations and Warranties of BMA and BioSeq.
5.1. Representations and Warranties of BMA. BMA represents and warrants
that it is the owner of the entire right, title and interest to
the BMA Patents, and that BioSeq is its exclusive licensee of the
BMA Patents and Technology for all markets, products, and
applications.
5.2. Representations and Warranties of BioSeq. BioSeq represents and
warrants that it has the right and authority to enter into this
Agreement and to grant the License granted hereunder, and that
this Agreement and the
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License do not and will not conflict with the terms of any other
agreement to which BioSeq is a party or by which it is bound.
5.3. Disclaimers. Except as otherwise expressly set forth in this
Agreement, BMA and BioSeq and their directors, officers,
employees, and agents make no representations and extend no
warranties of any kind, either express or implied.
6. Representations, Warranties and Acknowledges of BBI.
6.1. Representations and Warranties. BBI represents and warrants that
it has the right and authority to enter into this Agreement and
that this Agreement and the exercise of the License do not and
will not conflict with the terms of any agreement to which BBI is
a party or by which it is bound.
6.2. Disclaimers. Except as otherwise expressly set forth in this
Agreement, BBI, its directors, officers, employees and agents make
no representations and extend no warranties of any kind, either
express or implied.
7. Indemnification
7.1 Indemnification by BMA. BMA shall indemnify, defend and hold BBI,
its directors, officers, employees and affiliates, harmless from
and against all claims, proceedings, demands and liabilities of
any kind whatsoever (including reasonable attorneys' fees and
costs and other expenses of litigation) resulting from the
material breach of BMA of any of its representations, warranties
or covenants contained in this Agreement.
7.2 Indemnification by BioSeq. BioSeq shall indemnify, defend and hold
BBI, its directors, officers, employees and affiliates, harmless
from and against all claims, proceedings, demands and liabilities
of any kind whatsoever (including reasonable attorneys' fees and
costs and other expenses of litigation) resulting from the
material breach by BioSeq of any of its representations,
warranties, acknowledgments or covenants contained in this
Agreement.
7.3. Indemnification by BBI. BBI shall indemnify, defend and hold
BioSeq, its directors, officers, employees and affiliates harmless
from and against all claims, proceedings, demands and liabilities
of any kind whatsoever (including reasonable attorneys' fees and
costs and other expenses of litigation) resulting from the
material breach by BBI of any of its
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representations, warranties, acknowledgments or covenants
contained in this Agreement.
7.4 Infringement.
(a) Third Party Infringement. Each party shall notify
the other promptly of any possible infringements, unauthorized
possession, knowledge or use of the intellectual property
embodied in any of the BMA Patents by others of which such
party becomes aware, and shall promptly furnish the other
party with full details of such infringements, unauthorized
possession, knowledge or use. BioSeq shall have the first
right, but not the obligation, at its expense, to bring any
action on account of any such infringements, unauthorized
possessions, knowledge or use, and BBI shall cooperate with
BioSeq, as BioSeq may reasonably request, in connection with
any such action. If, within sixty (60) days after receipt by
BioSeq of a written request from BBI that it bring such action
BioSeq does not do so, BBI shall have the right, at its
expense and in its own name or in the name of BioSeq, if
required by law, to do so on its own behalf and on behalf of
BioSeq, and BioSeq shall cooperate with BBI, as BBI may
reasonably request, in connection with such action. No such
legal action may be settled by one party without the other's
prior written consent, which consent shall not be unreasonably
withheld. Damages recovered in any such actions which are
determined to relate to lost sales by BBI, after reimbursement
to each party of its expenses in prosecuting such actions,
shall be treated as proceeds of Net Revenues hereunder and
paid to each party accordingly.
(b) Third Party Actions. To BioSeq's knowledge, the
exercise of the rights granted herein will not result in the
infringement of valid patents of third parties. Nevertheless,
each party will promptly notify the other in the event any
relevant third party patents come to its notice. Neither party
gives any warranty regarding the infringement of third party
rights by practice of the license granted hereunder, and gives
no indemnity against costs, damages, expenses or other losses
arising out of proceedings brought against the other party or
any other person by any third party. In the event either party
is sued for infringement of any rights of any third party in
the exercise of its rights hereunder, the other party shall
extend to it, at no charge, good faith assistance and support
in defending such action, and may participate in the conduct
of the suit at its own expense, but, shall be under no
obligation in respect thereof.
8. Term and Termination.
8.1. Term. The term of this Agreement shall extend until the last Valid
Claim to expire under the BMA Patents, except as provided in
Section 8.2 below.
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8.2 License Term. The term of the License set forth in Section 2
above, as distinguished from the term of this Agreement, shall
commence upon the earlier of (a) BBI's payment pursuant to Section
1.2(iii) of the Preferred Stock Purchase Agreement between the
parties of even date, and (b) December 31, 1997, and shall
continue on an exclusive basis until the first commercial sale of
an Instrument by BioSeq to a third party pursuant to a bona fide
intention of BioSeq to conduct a business involving the
manufacture, sale and servicing of Instruments in the ordinary
course of a business, upon which occurrence the License shall
become non-exclusive and, upon full payment of any royalties due
in respect of sales of Services prior to that date, fully paid and
royalty free.
8.3. Termination by BioSeq. In additional to all other remedies BioSeq
may have, BioSeq may terminate this Agreement and the License
granted in this Agreement in the event that BBI defaults on any
payment to BioSeq and such default continues unremedied for a
period of thirty (30) days after BBI receives written notice of
default from BioSeq; or BBI fails to perform any of its materials
obligations, warranties, duties or responsibilities hereunder, and
such failure continues unremedied for a period of thirty (30) days
after written notice thereof to BBI by BioSeq.
8.4. Termination by BBI. If the claims under the BMA Patents covering a
Service are determined to be invalid or unenforceable in the
United States by any court or tribunal of competent jurisdiction
(including a determination in the U.S. Patent and Trademark Office
that it not subject to appeal within that Office), and the
determination becomes final in that it is not further reviewable
through exhaustion of all permissible application for rehearing or
review, or through the expiration of the time permitted for such
applications, BBI may terminate this Agreement at will and shall
have no further royalty obligation. In addition to all other
remedies BBI may have, BBI may terminate this Agreement and the
License granted in this Agreement tin the event that BMA or BioSeq
fails to perform any of its materials obligations, warranties,
duties or responsibilities hereunder, and such failure continues
unremedied for a period of thirty (3) days after written notice
thereof by BBI.
8.5. BMA Confirmation and Extension. BMA has joined in the grant of
License rights to BBI under Section 2 above. Accordingly, in the
event the BMA License terminates at a time this License Agreement
is in effect, such termination shall not affect the validity or
efficacy of BBI's rights to the BMA Patents, Technology or
Instruments, or other rights and privileges granted BBI hereunder;
and in such event, if so requested by BBI, BMA shall enter into a
separate and direct license agreement extending directly to
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BBI, without any involvement of BioSeq, all rights, licenses,
benefits and privileges granted to BBI hereunder.
9. Miscellaneous
9.1. Governing Law; Jurisdiction. This Agreement shall be governed and
construed in accordance with the internal laws of the Commonwealth
of Massachusetts. The parties hereto agree to submit to personal
jurisdiction in the Commonwealth of Massachusetts and to accept
and agree to venue in that State.
9.2. Waiver. No provision of the Agreement may be waived except in
writing by both parties hereto. No failure or delay by either
party hereto in exercising any right or remedy hereunder or under
applicable law will operate as a waiver thereof, or a waiver of a
particular right or waiver of any right or remedy on any
subsequent occasion.
9.3. Severability. It is the intention of the parties to comply with
all applicable laws domestic or foreign in connection with the
performance of their respective obligations hereunder. In the
event that any provision of this Agreement, or any party hereof,
is found invalid or unenforceable, the remainder of this Agreement
will be binding on the parties hereto, and will be construed as if
the invalid or unenforceable provision or part thereof had been
deleted, and the Agreement shall be deemed modified to the extent
necessary to render the surviving provisions enforceable to the
fullest extent permitted by law.
9.4. Assignment. BioSeq and BBI may each, without the prior consent of
the other, assign this Agreement to any of their respective
Affiliates and, with the prior written consent of the other, which
shall not be unreasonably withheld, to any entity which shall
assume all of the assigning party's obligations hereunder. Any
purported assignment is violation of the preceding sentence shall
be void. The identity of a prospective assignee as an organization
or entity involved in the Field shall not be a basis for a
reasonable objection to any assignment otherwise permitted
hereunder. Any permitted assignee shall assume all obligations of
its assignor under this Agreement. No assignment shall relieve
either party of responsibility for the performance of any accrued
obligation which such party than has hereunder.
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9.5. Counterparts. This Agreement may be executed in duplicate both of
which shall be deemed to be originals, and both of which shall
constitute one and the same Agreement.
9.6. Notice. All communications between the parties with respect to any
of the provisions of this Agreement will be sent to the addresses
set out below, or to other addresses as notified by the parties
for the purpose of this clause, by prepaid, registered or
certified air mail which shall be deemed received by the other
party on the seventh business day following deposit in the mails,
or by cable, telex, facsimile transmission, or other electronic
means of communication (which shall be deemed received when
transmitted), with confirmation by letter given by the close of
business on the next following business day:
if to BMA, at
BioMolecular Assays, Inc.
00 Xxxxxxx Xxxxxx, Xxxx #X
Xxxxxx, Xxxxxxxxxxxxx 00000-00000
Attention: Xxxxx X. Xxxxx, Chairman
if to BioSeq, at
BioSeq, Inc.
00 Xxxxxxx Xxxxxx, Xxxx #X
Xxxxxx, Xxxxxxxxxxxxx 00000-00000
Attention: Xxxxx X. Xxxxxxxx, Xx.
President and Chief Executive Officer
with a copy to:
Warner & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esquire
if to BBI, at
Boston Biomedica, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
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with a copy to:
Brown, Rudnick, Freed & Gesmer, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esquire
9.7. Authority. The undersigned represent that they are each duly
authorized to sign this Agreement on behalf of the party for whom
they purport to act. Each party represents that no provision of
this Agreement will violate the provisions of any other agreement
that such party may have with any other person or legal entity.
Each party has relied on that representation in entering into this
Agreement
9.8. Entire Agreement. This Agreement, including the Schedules appended
hereto, contains the entire understanding of the parties relating
to the matters referred to herein, and supersedes and mergers all
prior proposals, understanding and all other agreements, oral and
written, between the parties relating to the subject of this
Agreement
9.9. Binding on Successors. The license granted hereunder shall inure
to the benefit of and be binding upon BMA, BioSeq and BBI,
respectively, and their respective successors and assigns.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
BIOSEQ, INC.
By: /s/ X. Xxxxxxxx
------------------------------
Title: President & CEO
---------------------------
BOSTON BIOMEDICA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: President & CEO
---------------------------
President and CEO
As to its specific obligations hereunder only:
BIOMOLECULAR ASSAYS, INC.
By: /s/ X. Xxxxxxxx
----------------------
Title: President & CEO
-------------------
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Schedule 1.2
To License Agreement
BioSeq, Inc. to Boston Biomedica, Inc.
--------------------------------------------------------------------------------
BMA Patents and Pending Applications
1. type US application
title "Controlling Enzymatic Activity"
date March 7, 1995
2. type US CIP application
title "Controlling Enzymatic Activity"
date June 7, 1995
3. type PCT and US CIP application
title "Pressure Cycling Reactor"
date March 7, 1996
4. type US application
title "Pressure Controlled Separation and Purification Process"
date scheduled to file by September 1996
