AGREEMENT
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This Agreement is made by and between Roche Molecular Systems, Inc.
("Roche"), a Delaware corporation, and Myriad Genetics, Inc. ("MGI"), Salt Lake
City, Utah, hereafter collectively refereed to as "The Parties".
BACKGROUND
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X. Xxxxx has the right to grant immunities from suit under certain United
States Patents describing and claiming, inter alia a gene amplification process
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known as the polymerase chain reaction ("PCR") technology.
B. MGI has attained substantial expertise in validating, documenting and
performing sophisticated diagnostic procedures.
C. MGI desires to obtain an immunity from suit from Roche to practice PCR
Technology to perform human in vitro clinical laboratory services, and Roche is
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willing to grant such an immunity, on the terms and subject to the conditions
provided exclusively in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, Roche and MGI agree as follows:
1. Definitions
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For the purpose of this Agreement, and solely for that purpose, the
terms set forth hereinafter shall be defined as follows:
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1.1 The term "Affiliate" of a designated party to this Agreement
shall mean:
a) an organization of which fifty percent (50%) or more of the
voting stock is controlled or owned directly or indirectly
by either party to this Agreement;
b) an organization which directly or indirectly owns or
controls fifty percent (50%) or more of the voting stock of
either party to this Agreement;
c) an organization, the majority ownership of which is directly
or indirectly common to the majority ownership of either
party to this Agreement; and
d) an organization under (a), (b), or (c) above in which the
amount of said ownership is less than fifty percent (50%)
and that amount is the maximum amount permitted pursuant to
the law governing the ownership of said organization.
It is understood and agreed, however, that the term "Affiliate" shall not
include Genentech Inc., a company located at 000 Xxxxx Xxx Xxxxx Xxxxxxxxx,
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx, X.X.X. ("Genentech").
1.2 "Assay" shall mean an in vitro diagnostic procedure utilizing PCR
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Technology to detect the presence, absence or quantity of a nucleic acid
sequence associated with a specific human disease or condition.
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1.3 "Diagnostic Product" shall mean an assemblage of reagents,
including but not limited to reagents packaged in the form of a kit, useful in
performing an Assay.
1.4 "Effective Date" shall mean the date on which the last signatory
to this Agreement signs the Agreement.
1.5 "Licensed Field" shall mean the field of human in vitro
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diagnostics solely for the detection of genetic diseases, genetic pre-
disposition to disease, microorganisms associated with infectious diseases,
cancer, or for tissue transplant typing or Parentage.
1.6 "Licensed Services" shall mean the performance of an Assay by MGI
to detect nucleic acid sequences associated with a human disease or condition
within the Licensed Field. Licensed Services include but are not limited to, any
combination of the steps of collecting a sample for analysis, isolating nucleic
acid sequences therein, amplifying one or more desired sequences, analyzing the
amplified material and reporting the results.
1.7 "Licensed Technology" shall mean the application of PCR
Technology, as that term is defined in section 1.10, to perform Licensed
Services.
1.8 "Net Service Revenues" shall mean gross invoice price for the
Licensed Services performed by MGI (or the fair market value for any nonmonetary
consideration which MGI agrees to receive in exchange for Licensed Services),
less the following deductions where they are factually applicable and are not
already reflected in the gross invoice price:
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(i) discounts allowed and taken, in amounts customary in the
trade (which shall include the difference between the
dollar amount charged by MGI for a Licensed Service and the
Medicare and/or Medicaid Limits of Allowance and/or
reimbursement limitations of a Third Party insurance
program); and
(ii) sales and/or use taxes and/or duties imposed upon and with
specific reference to particular sales.
No allowance or deduction shall be made for commissions or
collections, by whatever name known.
It is hereby understood and agreed that, to the extent feasible, the
Licensed Services shall at all times be invoiced, listed and billed by MGI as a
separate item in MGI's invoices, bills and reports to customers. However, in
the event a Licensed Service is offered in combination with another non-PCR
diagnostic assay(s) or together with a non-testing service(s) (e.g., an
interpretive or consultive service) as part of a package (e.g., genetic
counseling) (this combination of a Licensed Service with a non-testing or
interpretive service is hereinafter referred to as a "Combination Service"),
then Net Service Revenues for purposes of determining royalties on a Licensed
Service which is part of a Combination Service shall be determined by
multiplying the gross invoice price, less applicable deductions, for the
Combination Service, by the appropriate fraction in Attachment I hereto. The
fraction specified in Attachment I for a particular Licensed Service shall be
mutually agreed to by The Parties as accurately reflecting the value contributed
by the Licensed Service to the overall value of the package of the Combination
Service as offered by MGI.
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The Net Service Revenues of the Licensed Services that are performed
by MGI for any person, firm or corporation controlling, controlled by, or under
common control with MGI, or enjoying a special course of dealing with MGI, shall
be determined by reference to the Net Service Revenues which would be applicable
under this Section in an arm's length transaction by MGI to a Third Party other
than such person, firm or corporation.
1.9 "Parentage" shall mean analysis of human genetic material to
ascertain whether two or more individuals are biologically related, but
specifically excludes analysis of forensic evidence for a criminal proceeding.
1.10 "PCR Technology" shall mean polymerase chain reaction technology
covered by United States Patent Nos. B1 4,683,195 and B1 4,683,202 and any
reissue or reexamination patents thereof.
1.11 "Third Party" shall mean a party other than an Affiliate of The
Parties to this Agreement.
2. Grant
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2.1 Upon the terms and subject to the conditions of this Agreement, Roche
hereby grants to MGI, and MGI hereby accepts from Roche, a royalty-bearing, non-
exclusive immunity from suit under PCR Technology solely to use Licensed
Technology to perform Licensed Services within the United States and its
possessions and the Commonwealth of Puerto Rico. The Parties understand and
agree that no rights are hereby granted, expressly or by implication, under U.S.
Patent No. 4,965,188 (the '188 patent). An immunity from suit under the '188
patent may be obtained by purchase
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of Roche-manufactured polymerase or by contacting the Director of Licensing,
Roche Molecular Systems, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
(510/865-5400).
2.2 The Licensed Technology hereunder may be practiced solely for the
performance of Licensed Services and for no other purpose whatsoever, and no
other right, immunity or license is granted expressly, impliedly or by estoppel.
2.3 MGI expressly acknowledges and agrees that the immunity from suit
pursuant to this Agreement is personal to MGI alone and MGI shall have no right
to sublicense, assign or otherwise transfer or share its rights under the
foregoing immunity from suit and further agrees that Licensed Services will be
performed, offered, marketed and sold only by MGI and MGI shall not authorize
any other party, including Affiliates, to practice the Licensed Technology, nor
shall it practice the Licensed Technology in conjunction with any other party.
2.4 For each Combination Service that MGI offers pursuant to this
immunity from suit, MGI agrees that it will notify Roche at least sixty (60)
days before it commercializes said Combination Service. The Parties shall then
agree on the fraction of the value of Combination Services which is attributable
to the Licensed Service component. As to all other Licensed Services offered by
MGI which are not part of a Combination Service, MGI agrees to keep Roche
informed about the availability from MGI of each such Service within a
reasonable time after MGI commences offering the Service.
2.5 Roche hereby grants to MGI the right and MGI accepts and agrees
to credit Roche as the source of PCR Technology rights in MGI's, promotional
materials and any other materials intended for distribution to Third Parties as
follows:
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"This test is performed pursuant to an agreement with Roche Molecular
Systems, Inc."
3. Acknowledgement and Agreement on Diagnostic Products
----------------------------------------------------
3.1 MGI acknowledges and agrees that the immunity granted hereunder
is for the performance of Licensed Services only and does not include any right
to make, have made, offer or sell any products, including devices, PCR reagents,
kits or Diagnostic Products. MGI further acknowledges and agrees that Roche
Affiliates are in the business of providing clinical laboratory testing services
and the commercial sale of diagnostic testing systems and therefore may compete
directly with MGI's business.
4. Royalties, Records and Reports
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4.1 Royalties. For the rights and privileges granted under this
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Agreement, MGI shall pay to Roche earned royalties equal to fifteen percent
(15%) of MGI's Net Service Revenues for each Assay performed.
4.2 MGI shall keep full, true and accurate books of account
containing all particulars which may be necessary for the purpose of showing the
amount payable to Roche by way of royalty or by way of any other provision under
this Agreement. Such books and the supporting data shall be open at all
reasonable times, for three (3) years following the end of the calendar year to
which they pertain (and access shall not be denied thereafter, if reasonably
available), to the inspection of Roche or an independent certified public
accountant retained by Roche for the purpose of verifying MGI's royalty
statements or MGI's compliance in other respects with this Agreement. If in
dispute, such records shall be kept until the dispute is settled. The inspection
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of records shall be at Roche's sole cost and expense, unless the inspector
concludes that royalties reported by MGI for the period being audited are
understated by five percent (5%) or more from actual royalties, in which case
the costs and expenses of such inspection shall be paid by MGI.
4.3 MGI shall within thirty (30) days after the first day of January,
April, July and October of each year deliver to Roche a true and accurate
royalty report. This report shall give such particulars of the business
conducted by MGI during the preceding three (3) calendar months as are pertinent
to an accounting for royalty under this Agreement and shall include at least the
following:
(i) the number of tests performed in connection with
performance of the Licensed Services and Combination
Services during those three (3) months;
(ii) compilation of xxxxxxxx thereon and the allowable
deductions therefrom;
(iii) Net Service Revenues and the calculation of total
royalties thereon; and
(iv) the calculation of the net royalty payable to Roche. If
no royalties are due, it shall be so reported.
The correctness and completeness of each such report shall be attested
to in writing by the responsible financial officer of MGI's organization or by
MGI's external auditor or by the chairman or other head of MGI's internal audit
committee.
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Simultaneously with the delivery of each such report, MGI shall pay to
Roche the royalty and any other payments due under this Agreement for the period
covered by such report. All payments due Roche hereunder shall be sent together
with the royalty report by the due date to the following address:
Roche Molecular Systems, Inc.
X.X. Xxx 00000
Xxxxxx, XX. 00000
or to any address that Roche may advise in writing.
4.4 All amounts payable hereunder by MGI to Roche shall be payable
in United States currency.
4.5 MGI's obligation to pay royalties pursuant to this Agreement
shall terminate upon a final holding of invalidity or unenforceability of all of
the patents identified in Section 1.10, supra, by a court of appellate
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jurisdiction or by a trial court from which no appeal is or can be taken.
4.6 If MGI shall fail to pay any amount specified under this
Agreement after the due date thereof, the amount owed shall bear interest at the
Citibank NA base lending rate ("prime rate") plus 2% from the due date until
paid, provided, however, that if this interest rate is held to be unenforceable
for any reason, the interest rate shall be the maximum rate allowed by law at
the time the payment is due.
5. Performance of Licensed Services
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5.1 The Parties agree that quality assurance is of utmost importance
in the performance of Licensed Services. To that end, MGI agrees that it will:
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(a) participate in at least one independent proficiency testing
program for each Licensed Service when such program(s)
becomes available; and
(b) comply with all Medicare, Medicaid and/or CLIA standards
for diagnostic testing as well as all other applicable
federal, state and local regulations applicable to human
diagnostic testing.
6. Technology Notification
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6.1 With respect to any invention, improvement or discovery
(hereinafter referred to as "Discoveries" in this Article) of MGI made after
entering into this Agreement, resulting from work conducted under this Agreement
and being applicable to PCR, if MGI decides to license that Discovery to Third
Parties, then MGI agrees to provide to Roche, unless not possible due to MGI's
previous commitments to Third Parties relating to said Discoveries, a reasonable
opportunity to negotiate a license to use said Discoveries in PCR-based
diagnostic products and services. Such Discoveries include, but are not limited
to, improvements of the PCR process or in the performance of Assays,
modifications to or new methods of performing the Assays, including the
automation of the PCR process or of the Assays.
6.2 Any agreement reached between The Parties as a result of MGI's
notification to Roche of a Discovery pursuant to Section 6.1 hereto shall be
upon terms and conditions negotiated in good faith by The Parties.
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7. Diligence
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MGI shall exercise reasonable diligence in developing, testing,
validating, documenting, promoting and selling the Licensed Services. In the
course of such diligence, MGI shall take appropriate steps including, upon
reasonable written request of Roche, furnishing Roche with representative copies
of all promotional material relating to the Licensed Services.
8. Term and Termination
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8.1 The immunity granted to MGI herein shall commence on the
Effective Date and terminate the earliest of (a) five (5) years from said
Effective Date or (b) the date of expiration of the last to expire of the
patents included within the PCR Technology, which patent contains at least one
claim covering the performance of Licensed Services. At the end of the five year
term, this Agreement is renewable upon the same terms and conditions, for
successive one (1) year periods unless either party notifies the other in
writing within one hundred and twenty (120) days of the end of each one year
period of its intent to terminate the Agreement. Termination pursuant to such
notice shall be effective at the end of said one hundred and twenty (120) day
notice period.
8.2 If in the course of performing and offering Licensed Services,
MGI fails to comply with the quality assurance provisions of Article 5, MGI
shall so notify Roche and Roche shall notify MGI to correct the defects. MGI
shall have thirty (30) days from receipt of such notice to cure all defects of
which it is notified. If MGI does not cure all such defects within the
designated thirty (30) days, Roche may then in its sole discretion terminate
this Agreement in its entirety, or any portion thereof immediately. For the
purposes of this Section and this Agreement, MGI's failure to
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provide an accurate and correct test result when participating in an independent
proficiency testing program pursuant to Section 5.1 (a), on two consecutive
evaluations, shall automatically be deemed a failure to comply with Article 5
and shall be a material breach of this Agreement.
8.3 Notwithstanding any other Section of this Agreement, MGI may
terminate this Agreement for any reason on thirty (30) days' written notice to
Roche.
8.4 The decision of a Court or Administrative body finding Roche
liable or culpable due to MGI's performance of Licensed Services shall give
Roche the right to terminate this Agreement immediately upon notification to
Roche of said decision.
8.5 The immunity granted hereunder to MGI shall automatically
terminate upon (i) an adjudication of MGI as bankrupt or insolvent, or MGI's
admission in writing of its inability to pay its obligations as they mature;
(ii) or an assignment by MGI for the benefit of creditors; (iii) or MGI's
applying for or consenting to the appointment of a receiver, trustee or similar
officer for any substantial part of its property; (iv) such receiver, trustee or
similar officers appointment without the application or consent of MGI, if such
appointment shall continue undischarged for a period of ninety (90) days; or
MGI's instituting (by petition, application, answer, consent or otherwise) any
bankruptcy, insolvency arrangement, or similar proceeding relating to MGI under
the laws of any jurisdiction; (v) or the institution of any such proceeding (by
petition, application or otherwise) against MGI, if such proceeding shall remain
undismissed for a period of ninety (90) days or the issuance or levy of any
judgment, writ, warrant of attachment or execution or similar process against a
substantial part of the property of MGI, if such judgment, writ, or similar
process shall not be released, vacated or fully bonded within ninety (90) days
after its issue or levy; (vi) loss of MGI's
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federal or state licenses permits or accreditation necessary for operation of
MGI as a healthcare institution.
8.6 Roche shall have the right to terminate this Agreement by written
notice to MGI upon any change in the ownership or control of MGI or of its
assets. Termination under this Section shall be effective immediately upon
receipt by MGI of Roche's notice of termination. For such purposes, a "change in
ownership or control" shall mean that 30% or more of the voting stock of MGI
become subject to the control of a person or entity, or any related group of
persons or entities acting in concert, which person(s) or entity(ies) did not
control such proportion of voting stock as of the effective date of the
Agreement. Analogously, Roche shall have the right to terminate this Agreement
upon any transfer or sale of 30% or more of the assets of MGI to another party.
8.7 Breach. Upon any breach of or default of a material term under
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this Agreement by MGI, Roche may terminate this Agreement upon thirty (30) days'
written notice to MGI. Said notice shall become effective at the end of the
thirty-day (30) period, unless during said period MGI fully cures such breach or
default to Roche's reasonable satisfaction and notifies Roche of such a cure.
8.8 Upon termination of this Agreement as provided herein, all
immunities and rights granted to MGI hereunder shall revert to or be retained by
Roche. To the extent Roche has licensed technology or know-how of MGI pursuant
to Article 6 hereto, those licenses shall remain in force according to their
terms.
8.9 MGI's obligations to report to Roche and to pay royalties to
Roche as to the Licensed Services performed under the Agreement prior to
termination or expiration of the Agreement shall survive such termination or
expiration.
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9. Confidentiality - Publicity
---------------------------
9.1 Except as otherwise specifically provided in Section 2.5, MGI
agrees to obtain Roche's approval before distributing any written information,
including but not limited to promotional and sales materials, to Third Parties
which contains references to Roche or this Agreement. Roche's approval shall not
be unreasonably withheld or delayed and, in any event, Roche's decision shall be
rendered within three (3) weeks of receipt of the written information. Once
approved, such materials, or abstracts of such materials, which do not
materially alter the context of the material originally approved may be
reprinted during the term of the Agreement without further approval by Roche
unless Roche has notified MGI in writing of its decision to withdraw permission
for such use.
9.2 Each Party agrees that any financial, legal or business
information or any technical information disclosed to it (the "Receiving Party")
by the other (the "Disclosing Party") in connection with this Agreement shall be
considered confidential and proprietary and the Receiving Party shall not
disclose same to any Third Party and shall hold it in confidence for a period of
five (5) years and will not use it other than as permitted under this Agreement
provided, however, that any information, know-how or data which is orally
disclosed to the Receiving Party shall not be considered confidential and
proprietary unless such oral disclosure is reduced to writing and given to the
Receiving Party in written form within thirty (30) days after oral disclosure
thereof. Such confidential and proprietary information shall include, without
limitation, marketing and sales information, commercialization plans and
strategies, research and development work plans, and technical information such
as patent applications, inventions, trade secrets, systems, methods, apparatus,
designs, tangible material, organisms and products and derivatives thereof.
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9.3 The above obligations of confidentiality shall not be applicable
to the extent:
a) such information is general public knowledge or, after
disclosure hereunder, becomes general or public knowledge
through no fault of the Receiving Party; or
b) such information can be shown by the Receiving Party by its
written records to have been in its possession prior to
receipt thereof hereunder; or
c) such information is received by the Receiving Party from any
Third Party for use or disclosure by the Receiving Party
without any obligation to the Disclosing Party provided,
however, that information received by the Receiving Party
from any Third Party funded by the Disclosing Party (e.g.
consultants, subcontractors, etc.) shall not be released
from confidentiality under this exception; or
d) the disclosure of such information is reasonably needed for
use in connection with performing, offering and selling
Licensed Services; or
e) the disclosure of such information is required or desirable
to comply with or fulfill governmental requirements,
submissions to governmental bodies, or the securing of
regulatory approvals.
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9.4 With the exception of Section 2.5, each party shall, to the
extent reasonably practicable, maintain the confidentiality of the provisions of
this Agreement and shall refrain from making any public announcement or
disclosure of the terms of this Agreement without the prior consent of the other
party, except to the extent a party concludes in good faith that such disclosure
is required under applicable law or regulations, in which case the other party
shall be notified in advance.
10. Compliance
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In exercising any and all rights and in performing its obligations
hereunder, MGI shall comply fully with any and all applicable laws, regulations
and ordinances and shall obtain and keep in effect licenses, permits and other
governmental approvals, whether at the federal, state or local levels, necessary
or appropriate to carry on its activities hereunder. MGI further agrees to
refrain from any activities that would have an adverse effect on the business
reputation of Roche. Roche will advise MGI of any such activities and MGI will
have thirty (30) days to correct such activity.
11. Assignment
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This Agreement shall not be assigned by MGI (including without
limitation any purported assignment or transfer that would arise from a sale or
transfer of MGI's business). Roche may assign all or any part of its rights and
obligations under this Agreement at any time without the consent of MGI. MGI
agrees to execute such further acknowledgments or other instruments as Roche may
reasonably request in connection with such assignment.
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12. Negation of Warranties and Indemnity
------------------------------------
12.1 Nothing in this Agreement shall be construed as:
(a) a warranty or representation by Roche as to the validity or
scope of any Licensed Technology;
(b) a warranty or representation that the practice of the Licensed
Technology is or will be free from infringement of patents of
Third Parties (however, Roche is not aware of any such
infringement and no such claim has been made);
(c) an obligation to bring or prosecute actions or suits against
Third Parties for infringement;
(d) except as expressly set forth herein, conferring the right to
use in advertising, publicity or otherwise any trademark, trade
name, or names, or any contraction, abbreviation, simulation or
adaptation thereof, of Roche;
(e) conferring by implication, estoppel or otherwise any license,
right or immunity under any patents or patent applications of
Roche other than those specified in PCR Technology, regardless
of whether such patents and patent applications are dominant or
subordinate to those in PCR Technology;
(f) an obligation to furnish any know-how not provided in PCR
Technology; or
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(g) creating any agency, partnership, joint venture or similar
relationship between Roche and MGI.
12.2 ROCHE MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
12.3 MGI acknowledges that the technology licensed hereby is newly
developed, and agrees to take all reasonable precautions to prevent death,
personal injury, illness and property damage from the use of such technology.
MGI shall assume full responsibility for its use of the Licensed Technology and
shall defend, indemnify and hold Roche harmless from and against all liability,
demands, damages, expenses (including attorneys' fees) and losses for death,
personal injury, illness, property damage or any other injury or damage,
including any damages or expenses arising in connection with state or federal
regulatory action, in view of the use by MGI, including its officers, directors,
agents and employees, of the Licensed Technology, except that MGI shall not be
liable to Roche for injury or damage arising solely because of Roche's
negligence.
12.4 Roche warrants and represents that is has the right and power to
grant this immunity from suit to MGI and that the granting of such immunity does
not require the consent or approval of a Third Party. Roche does hereby place
MGI on notice, however, that the Xxxxxxx Kodak Company ("Kodak") has asserted
certain interests in PCR Technology, which assertions are the subject of an
arbitration proceeding between Kodak, Roche and the Cetus Corporation (now part
of Chiron). Roche believes that any claims Kodak has asserted or may assert, as
would impact this Agreement, are without merit. However, The Parties expressly
agree that Roche will not be held responsible or liable in any way to MGI in the
event that Kodak is found to have certain rights in PCR Technology that may
impact this Agreement or the rights granted hereunder, except that Roche agrees
to refund to MGI that portion of the
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royalties actually paid to Roche by MGI under this Agreement which portion of
the royalties is held by a final decree in the above-mentioned arbitration to
belong to Kodak. In no event shall Roche's refund to MGI exceed the total
royalties MGI already paid to Roche.
13. General
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13.1 This Agreement constitutes the entire agreement between The
Parties as to the subject matter hereof, and all prior negotiations,
representations, agreements and understandings are merged into, extinguished by
and completely expressed by it. This Agreement may be modified or amended only
by a writing executed by authorized officers of each of The Parties.
13.2 Any notice required or permitted to be given by this Agreement
shall be given by postpaid, first class, registered or certified mail, or by
courier or facsimile, properly addressed to the other party at the respective
address as shown below:
If to Roche for legal notice:
Roche Molecular Systems, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
If to Roche for any other reason:
Roche Molecular Systems, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Licensing Manager
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If to MGI:
Myriad Genetics, Inc.
000 Xxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: President
Either party may change its address by providing notice to the other party.
Unless otherwise specified herein, any notice given in accordance with the
foregoing shall be deemed given within four (4) full business days after the day
of mailing, or one full day after the date of delivery to the courier, or the
date of facsimile transmission, as the case will be.
13.3 Governing Law and Venue. This Agreement and its effect are
------------------------
subject to and shall be construed and enforced in accordance with the law of the
State of New Jersey, U.S.A., except as to any issue which by the law of New
Jersey depends upon the validity, scope or enforceability of any patent within
the Licensed Technology, which issue shall be determined in accordance with the
applicable patent laws of the United States. The Parties agree that the
exclusive jurisdiction and venue for any dispute or controversy arising from
this Agreement shall be in the United States District Court for the District of
New Jersey if federal jurisdiction exists, and if no federal jurisdiction
exists, then in the Superior Court of New Jersey.
13.4 Arbitration. Notwithstanding the provisions of Section 13.3
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above, any dispute concerning solely the determination of facts such as, but not
limited to, (i) the value of a Combination Service and a Licensed Service
pursuant to Section 1.8; (ii) a determination of royalty rate payments owed
pursuant to Section 4.1; (iii) compliance with quality assurance pursuant to
Article 5; (iv) good faith compliance with Article 6; and which dispute does
not involve a question of law, shall be settled by final and binding arbitration
at a mutually convenient location in the State of New Jersey
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pursuant to the commercial arbitration rules of the American Arbitration
Association, in accordance with the following procedural process:
(a) The arbitration tribunal shall consist of three
arbitrators. Each party shall nominate in the request for
arbitration and the answer thereto one arbitrator and the
two arbitrators so named will then jointly appoint the
third arbitrator as chairman of the arbitration tribunal.
(b) The decision of the arbitration tribunal shall be final and
judgment upon such decision may be entered in any competent
court for juridical acceptance of such an award and order
of enforcement. Each party hereby submits itself to the
courts of the place of arbitration, but only for the entry
of judgment with respect to the decision of the arbitrators
hereunder.
Each party hereby submits itself to the jurisdiction of the courts of
the place of arbitration, but only for the entry of judgment with respect to the
decision of the arbitrators hereunder.
13.5 Nothing in this Agreement shall be construed so as to require
the commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement or concerning the legal right of The
Parties to enter into this contract and any statute, law, ordinance or treaty,
the latter shall prevail, but in such event the affected provisions of the
Agreement shall be curtailed and limited only to the extent necessary to bring
it within the applicable legal requirements.
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13.6 If any provision of this Agreement is held to be unenforceable
for any reason, it shall be adjusted rather than voided, if possible, in order
to achieve the intent of the parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
full extent possible.
IN WITNESS WHEREOF, The Parties hereto have set their hands and seals and
duly executed this Agreement on the date(s) indicated below, to be effective on
Effective Date as defined herein.
ROCHE MOLECULAR SYSTEMS, INC. MYRIAD GENETICS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------- --------------------------
Typed Name: Xxxxx Xxxxxxx Typed Name: Xxxxx X. Xxxxxxx
Title: President Title: President
Date: 2/7/93 Date: 4/23/93
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ATTACHMENT I
Percentage of Net Service
Revenues for Combination
Services which is
Attributable to Licensed
Licensed Services Services
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[TO BE DETERMINED]
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RIDER CONCERNING SUPPLEMENTAL PATENT RIGHTS TO
DIAGNOSTIC SERVICES AGREEMENT
The purpose of this rider is to set forth the agreement of Myriad Genetics, Inc.
("MGI") and Roche Molecular Systems, Inc. ("RMS") concerning the supplemental
rights to additional patents relating to PCR technology which RMS offers and the
parties agree to add to the rights granted to MGI by the Agreement between the
parties, dated April 23, 1993 (the "Diagnostic Services Agreement").
1. It is understood by the parties that RMS may, from time to time, come into
possession or control of additional patents or claims of patents relating
to PCR technology rights to which RMS may decide to offer to add to the
Diagnostic Services Agreement and which MGI may desire to accept.
Accordingly, appended hereto as APPENDIX A is a list of such additional
patents or claims of patents as RMS is currently offering to which MGI, by
its authorized representative, has indicated its acceptance thereof in
accordance with the rights of use and all other pertinent obligations,
restrictions and limitations as set forth in the Diagnostic Services
Agreement.
2. APPENDIX A may be amended by mutual agreement of the parties in writing so
as to add additional patent rights being offered by RMS. Accordingly, a new
APPENDIX A signed and dated by both parties shall supersede any prior
APPENDIX A and shall become a part of this rider.
3. It is expressly understood and agreed by the parties that the grant of
additional patent rights herein does not in any way otherwise modify the
Diagnostic Services Agreement and that all provisions of that Agreement
shall remain in full
-1-
RIDER CONCERNING SUPPLEMENTAL PATENT RIGHTS TO
DIAGNOSTIC SERVICES AGREEMENT (Cont'd.)
force and effect as originally set forth therein. The term of the
Diagnostic Services Agreement shall control the enjoyment of rights
hereunder and is not extended by the rights granted hereby nor shall there
be any additional royalty obligation to RMS beyond that set forth in said
Agreement.
4. In consideration of the further rights being granted it hereunder, MGI
agrees to remain in good faith compliance with the applicable terms of the
Diagnostic Services Agreement, including reporting and payment of royalties
and the limitation on use of PCR technology strictly for the performance of
licensed services and not to make products.
5. In the event that MGI's obligation to pay royalties under the Diagnostic
Services Agreement for its rights to use the PCR technology shall cease for
any reason, whether by termination, expiry, invalidation or otherwise, then
the parties agree that this rider shall become null and void and the rights
granted hereunder terminated without notice and the parties shall be free
to negotiate a new agreement with respect to the patent rights listed on
APPENDIX X.
XXXXX MOLECULAR SYSTEMS, INC. Accepted and Agreed,
MYRIAD GENETICS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------- --------------------------
Title: President Title: President
Date: July 30, 1993 Date: 9/3/93
------------------------- ------------------------
-2-
APPENDIX A TO RIDER
Additional Patents
------------------
U.S. Patent Number 5,008,182
U.S. Patent Number 5,176,995
U.S. Patent Number 5,219,727
ROCHE MOLECULAR SYSTEMS, INC. MYRIAD GENETICS, Inc.
By: /s/ Xxxxx Xxxxxxx, Ph.D. By: /s/ Xxxxx X. Xxxxxxx
---------------------------- --------------------------
Xxxxx Xxxxxxx
Title: Director of Licensing Title: President
Date: 7/19/93 Date: 9/3/93
-------------------------- ------------------------
AMENDMENT TO
PCR DIAGNOSTIC SERVICE AGREEMENT
This is an amendment (hereinafter "Amendment") to the Agreement dated April
23, 1993 ("Agreement"), by and between Roche Molecular Systems, Inc. ("RMS"),
having an office at 0000 X.X. Xxxxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx 00000-0000,
and Myriad Genetics, Inc. ("MGI"), Salt Lake City, Utah, hereafter collectively
referred to as "The Parties".
BACKGROUND
----------
On April 23, 1993, The Parties hereto entered into an Agreement whereby RMS
granted MGI an immunity from suit under certain of RMS's patents describing and
claiming polymerase chain reaction ("PCR") to perform human in vitro clinical
-- -----
laboratory services.
The Parties to the above-referenced Agreement desire to amend and
supplement certain terms of the Agreement upon the terms and conditions set
forth herein.
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and agreements contained herein, RMS and MGI agree as follows:
-1-
1. Definitions
-----------
All capitalized and highlighted terms used herein and not otherwise
defined herein shall have the respective meanings given to them in the Agreement
dated April 23, 1993 between The Parties. To the extent a term is defined herein
and also appears in the Agreement, the definition provided herein shall
supersede that provided in the Agreement.
2. Amendments to the Agreement
---------------------------
The Agreement is, effective as of the date of the last signature
hereto, hereby amended as follows:
A. Article 1 of the Agreement is amended as follows:
1.8 "Net Service Revenues" shall mean gross invoice price for the
Licensed Services performed by MGI (or the fair market value for any nonmonetary
consideration which MGI agrees to receive in exchange for Licenses Services),
less the following deductions where they are factually applicable and are not
already reflected in the gross invoice price:
(i) discounts allowed and taken, in amount customary in the
trade (which shall include the difference between the dollar
amount charged by MGI for a Licensed Service and the
Medicare and/or Medicaid Limits of Allowance and/or
reimbursement limitation of a Third Party insurance
program);
-2-
(ii) sales and/or use taxes and/or duties imposed upon and with
specific reference to particular sales; and
(iii) actual bad debt, up to 2% of gross invoice price for
Licensed Services, which bad debt MGI can prove and
document that it was reasonable and diligent in its efforts
to collect payment.
B. Article 8 is amended as follows:
8.1 The immunity from suit granted to MGI herein shall commence on
the Effective Date and terminate on the date of expiration of the last to expire
of the patents included within the PCR Technology, which patent contains at
least one claim covering the performance of Licensed Services.
C. Article 12 is amended as follows:
Section 12.4, the "Kodak" clause, is deleted in its entirety.
-3-
D. General Provisions
------------------
1. Effect of Amendments. On and after the date hereof, the Agreement
---------------------
shall be deemed to be amended and supplemented as hereinabove set forth, as
fully and with the same force and effect as if the amendments set forth herein
had originally been set forth in the Agreement.
2. Limitations. Except as amended and supplemented hereby, all the
------------
terms and provisions of the Agreement shall remain unchanged and in full force
and effect. No alteration or amendment to this Amendment shall be binding on any
party hereto unless reduced to writing signed by both parties.
IN WITNESS WHEREOF, The Parties hereto have set their hands and seals and
duly executed this Amendment on the date(s) indicated below, to be effective on
the date on which the last party to execute the Amendment signs below.
ROCHE MOLECULAR SYSTEMS, INC. MYRIAD GENETICS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
-------------------------- --------------------------
Typed Name: Xxxxx Xxxxxxx Typed Name: Xxxxx X. Xxxxxxx
Title: President Title: PRESIDENT
Date: July 30, 1993 Date: 9/3/93
------------------------ ------------------------
-4-
[logo] Roche Molecular Systems
Roche Molecular Systems. Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx. Xxxxxxxxxx 00000
Date: July 14, 1995
To: Xxxxx X. Xxxxxxx, President
Myriad Genetics, Inc.
copy: Xxx Xxxxx, Controller
Re: Proposed Change in Royalty Reporting for License Agreement dated April 23,
1993, between Roche Molecular Systems, Inc. ("RMS"), Licensor, and Myriad
Genetics, Inc. (MGI"), Licensee
RMS is pleased to offer Myriad Genetics, Inc. an opportunity to simplify the
royalty reporting requirements of the above-referenced Agreement between RMS
and MGI (the "Agreement"). Under the Agreement, MGI must submit quarterly
royalty reports. This letter is to offer MGI the option of converting to a
biannual schedule of royalty reporting. If you accept this option, instead of
having to provide detailed reports every three months, within 30 days, you will
report only once every six months, within 60 days. Royalty payments due will be
submitted, as usual, along with the royalty report. We believe that initiating
this new reporting schedule will alleviate our licensees' administrative
burdens.
If you choose to have this change apply to the Agreement, the terms of Article
4, Section 4.3 will be amended as follows:
MGI shall within sixty (60) days after the first day of January and July of
each year deliver to RMS a true and accurate royalty report. Such report
shall cover the preceding six (6) calendar months; and shall be submitted
either i) on the "Summary Royalty Report", a copy of which is attached
hereto as Attachment II, or ii) on a form generated by MGI which duplicates
the format of the Summary Royalty Report; and shall include at least the
following:
To indicate MGI's acceptance of this amendment to the Agreement, please have an
authorized representative of MGI sign both duplicate originals of this letter.
You should retain one fully executed original and return the other, within
forty-five (45) days to: Xxxxx Xxxxx, Licensing Manager, at the address shown
above. This will effectively amend the Agreement as of the date of your
signature. If we have not received the executed letter within 45 days of the
date written above, this offer shall be deemed withdrawn, and MGI shall
continue to report on a quarterly basis, within 30 days.
If you have any questions, you may telephone Xx. Xxxxx at (000) 000-0000 or
Xxxxxxx Xxxxx, Licensing Coordinator, at (000) 000-0000.
Sincerely,
ROCHE MOLECULAR SYSTEMS, INC. MYRIAD GENETICS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
---------------------------- ------------------------------
Xxxxx Xxxxxxx, Ph.D. Name: Xxxxx X. Xxxxxxx
Director of Licensing
Title: President & CEO
Date: 7/28/95
[logo] Roche Molecular Systems
A Member of the Roche Group
Roche Molecular Systems, Inc.
0000 Xxxxxxxx Xxxxxx
November 13, 1996 Xxxxxxx, Xxxxxxxxxx 00000
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
Xxx Xxxxx By Facsimile c/o: 000-000-0000
Vice President of Finance
MYRIAD GENETICS, INC.
000 Xxxxxx Xxx
Xxx Xxxx Xxxx, XX 00000
Re: Agreement effective April 23, 1993 between Roche Molecular Systems, Inc.
and Myriad Genetics, Inc. covering PCR-based human diagnostic services
Dear Xx. Xxxxx:
This is in response to your inquiry about alternative royalty options to those
presently contained in Myriad's Agreement.
The percent royalty owed on net sales revenues under the above-referenced
Agreement may be lowered by the up-front payment of annual minimum royalties,
which are fully creditable against royalties earned in the ensuing twelve-month
period. An annual minimum payment is due within thirty (30) days of January 1st
for each calendar year in which Myriad wishes to participate in this program.
The following schedule details the amounts of such annual minimum up-front
payments and the resulting royalty rates.
PERCENT ROYALTY RATE AS A FUNCTION OF UP-FRONT PAYMENT
------------------------------------------------------
Annual Minimum
Up-Front Payment Royalty Rate
---------------- ------------
0 15%
$ 50,000 13%
$150,000 11%
$250,000 9%
Please call me with any questions you may have about the implementation of this
program.
Sincerely,
ROCHE MOLECULAR SYSTEMS, INC.
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
Licensing Manager
