PATENT LICENSE AND SETTLEMENT AGREEMENT
Exhibit
10.10
This
Patent License and Settlement Agreement, effective as of July 1, 2007
(hereinafter, "Effective Date"), is made by and between Health Discovery
Corporation ("HDC"), a Texas corporation having its principal place of business
at 0 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, and Ciphergen Biosystems, Inc.
(“Ciphergen”), a Delaware corporation having its principal place of business at
0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (referred to herein collectively as
“the Parties” and individually as a “Party”).
RECITALS
WHEREAS,
the Parties have been involved in litigation concerning, among other things,
the
alleged infringement by Ciphergen of certain patents owned by HDC and related
counterclaims asserted by Ciphergen in Health Discovery Corporation v. Ciphergen
Biosystems, Inc. Case No. 07-00285-CRB, pending as of the Effective Date in
the
United States District Court for the Northern District of California (“Pending
Litigation”); and
WHEREAS,
Ciphergen and HDC, wishing to avoid the expense of further litigation, have
agreed to settle such Pending Litigation pursuant to the terms set forth below
without either Party making any admission of any liability and, as part of
the
settlement, HDC has agreed, among other things, to grant to Ciphergen certain
licenses, releases, and immunities from suit with respect to certain patents,
and Ciphergen has agreed to pay certain fees and to grant HDC certain releases
from suit with respect to its counterclaims.
NOW,
THEREFORE, in consideration of the mutual covenants, representations, warranties
and other terms and conditions contained herein, the sufficiency of which is
hereby acknowledged, the Parties hereto agree as follows:
ARTICLE
I. DEFINITIONS
As
used
in this Agreement, the following terms, whether used in singular or in plural,
shall have the respective meanings set forth below:
1.1
“Change in Control” with respect to Ciphergen means (a) any consolidation or
merger of Ciphergen with or into any other entity in which the holders of
Ciphergen’s outstanding shares immediately before such consolidation or merger
do not, immediately after such consolidation or merger, retain stock
representing a majority of the voting power of the surviving entity or stock
representing a majority of the voting power of an entity that wholly owns,
directly or indirectly, the surviving entity; (b) the sale, transfer or
assignment of securities of Ciphergen representing a majority of the voting
power of all Ciphergen’s outstanding voting securities to an acquiring party or
“group” (as defined under the Securities Exchange Act of 1934, as amended); (c)
the sale of all or substantially all of Ciphergen’s business or assets; or (d)
any series of related transactions that would fall within clause (a), (b) or
(c)
above if viewed as a single transaction.
1.2
"Valid
Patent Claim" shall mean a claim of an issued, maintained, and unexpired patent
included within the Licensed Patents, which has not been revoked or held
unenforceable or invalid by a final decision of a court or other governmental
agency of competent jurisdiction having authority over said patent and that
final decision is not appealed or is unappealable, and which has not been
admitted to be invalid or unenforceable through reissue, disclaimer or other
similar means.
ARTICLE
II. RELEASES
AND SETTLEMENT
2.1
Mutual
Release.
Each
Party, on behalf of itself and its affiliates, agents, officers, directors,
shareholders, employees, successors and assigns (“Associated Parties”), hereby
irrevocably releases and forever discharges each other Party and its affiliates,
agents, officers, directors, shareholders, employees, scientific advisory board
members, attorneys, successors, assigns, and heirs (collectively, “Released
Parties”) of and from any and all claims, counterclaims, demands, actions,
causes of action, damages, liabilities, losses, payments, obligations, costs
and
expenses (including, without limitation, attorneys’ fees and costs) of any kind
or nature, past or present, fixed or contingent, direct or indirect, in law
or
equity, several or otherwise, known or unknown, suspected or unsuspected, that
arise from or relate in any way to any act or omission committed by a Party
prior to the Effective Date (“Released Claims”). The foregoing release shall not
apply to each Party’s obligations required to be performed under this Agreement
and shall not apply to any activity that continues beyond the Effective Date.
2.2
Waiver.
Each
Party, on behalf of itself and its Affiliates, agents, representatives,
officers, directors, shareholders, employees, attorneys, advisors, insurers,
successors and assigns, hereby irrevocably and forever waives all rights it
may
have arising under California Civil Code Section 1542 (or any analogous
requirement of law) with respect to the foregoing release. Each Party
understands that Section 1542 provides that:
A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his favor at the time of executing the release, which if known by
him
must have materially affected his settlement with the debtor.
Each
Party acknowledges that it has been fully informed by its counsel concerning
the
effect and import of this Agreement under California Civil Code Section 1542
and
other requirements of law.
2.3
Dismissal
of Pending Litigation.
Within
ten (10) days after the Effective Date, the Parties shall cause to be completed,
executed and filed with the applicable court a stipulated dismissal with
prejudice of the Pending Litigation consistent with this Agreement and in the
form attached hereto as Attachment B (the “Dismissal”).
2.4
No
Admission.
This
Agreement is entered into in order to compromise and settle disputed claims,
without any acquiescence on the part of any Party as to the merit of any claim,
defense, affirmative defense, counterclaim, liabilities or damages related
to
any patent rights and/or the Pending Litigation. Neither this Agreement nor
any
part thereof shall be, or be used as, an admission of infringement or liability
by anyone, at any time for any purpose.
ARTICLE
III. LICENSE
GRANT
3.1
License: HDC grants to Ciphergen a worldwide, non-exclusive, fully
paid-up,
royalty-free
license
to the patents
and
pending patent applications (“the Licensed Patents”) identified in attached
Schedule A,
including any divisionals, continuations or continuations-in-part of the
Licensed Patents to the extent that they have claims covering the Licensed
Field, which is defined as follows:
(a) Manufacture,
offer
for sale, sale,
use
and/or
importation
of
SELDI-based mass spectrometers and Associated Software, which is defined
as the software developed and sold by Ciphergen under the trademarks
ProteinChip®
Software, Biomarker Patterns™
Software,
and
CiphergenExpress™
Software (whether done by Ciphergen or by a third party on Ciphergen’s behalf).
Customers
of Ciphergen will have an implied license to utilize the Licensed Patents when
using SELDI instruments purchased from Ciphergen with the Associated
Software, but will
have no
separate right to use Support Vector Machine (SVM) technology as claimed
in the Licensed Patents apart from their use of the SELDI-based mass
spectrometers with the Associated Software, which expressly excludes the
addition or substitution of third party-based SVM technology to or
for the Associated Software;
(b) Use
of
SVM software in conjunction with a SELDI-based mass spectrometer by Ciphergen
and/or a research institution(s), pursuant to or in connection with a
collaboration between Ciphergen and such research institution(s) and primarily
for Ciphergen’s benefit; and
(c) Development,
clinical testing and/or commercialization of tests or test kits, utilizing
the
methods described in paragraph 3.1(b), which are commercialized by Ciphergen
and/or subsequently transferred by Ciphergen to a Ciphergen partner or third
party for commercialization.
3.2
Assignment:
Ciphergen may not assign its rights under this Agreement without the written
consent of HDC, with the exception that Ciphergen may assign its rights under
this agreement to a wholly-owned subsidiary without HDC’s consent. Any
assignment hereunder of Ciphergen’s obligations under this Agreement shall
specifically obligate the assignee to perform the payment obligations under
Article IV.
ARTICLE
IV. FEES
4.1
Fees.
In
exchange for the grant by HDC of the license as described above and the
covenants contained herein, Ciphergen shall pay HDC the sum of $600,000 over
a
two year period. The payment by Ciphergen to HDC is agreed to be on the
following schedule:
|
Event
|
Amount
|
|
Signing
of the License Agreement
|
$200,000
|
|
3
Months After Signing
|
$100,000
|
|
12
Months After Signing
|
$150,000
|
|
24
Months After Signing
|
$150,000
|
|
Total:
|
$600,000
|
and
be
made by wire transfer of immediately available funds to:
WIRING
INSTRUCTIONS
_____________________
Name
of Bank: _________________
_________________
_________________
Bank
ABA Routing
No.: _________________
Bank
Account
No.:
_________________
Bank
Account
Name: _________________
_________________
Contact: _________________
_________________
4.2
Late
Payments.
Payments late by more than forty-five (45) days shall bear an interest at the
rate of 2% over the prime rate in effect at Citibank, Manhattan on the due
date,
not to exceed the maximum rate permitted by law. Payments late by more than
sixty (60) days shall be deemed to be a breach of this Agreement and shall
immediately terminate any sublicenses granted by Ciphergen hereunder, any
implied licenses enjoyed by Ciphergen’s customers, and the provisions of Article
7.1.
ARTICLE
V. TERM
AND TERMINATION
5.1
Termination
and Expiration.
This
Agreement shall be effective as of the Effective Date, even though necessary
ratifying signatures may be at a later date, and shall remain in full force
and
effective until expiration of the last Valid Patent Claim.
5.2
Impact
of Change in Control.
Upon a
change in control, the successor in interest shall fulfill all obligations
Ciphergen has under this Agreement and shall acquire the rights Ciphergen has
under this Agreement pursuant to Article III.
5.3
Insolvency.
Should
Ciphergen (a) become insolvent or unable to pay its debts as they mature, or
(b)
make an assignment of substantially all of its business assets for the benefit
of creditors, or (c) permit or procure the appointment of a receiver for
substantially all of its business assets, or (d) become the subject of any
bankruptcy, insolvency or similar proceeding and be unable to perform its
obligations hereunder, then HDC may at any time thereafter on written notice
to
Ciphergen, effective forthwith, cancel this Agreement and any sublicenses
granted by Ciphergen hereunder, any implied licenses enjoyed by Ciphergen’s
customers, and negate the releases and discharges granted by HDC pursuant to
this Agreement.
ARTICLE
VI. REPRESENTATIONS,
WARRANTIES AND COVENANTS
6.1
HDC
Representations, Warranties and Covenants.
HDC
represents, warrants and covenants that (a) HDC has the full power to enter
into
this Agreement and to perform its obligations hereunder; (b) HDC is the owner
of
the entire right, title and interest in and to the Licensed Patents; (c) HDC
has
the sole right and authority to enter into this Agreement and grant the rights,
licenses, releases and immunities granted hereunder, without the need for any
licenses, releases, consents, approvals or immunities not yet granted or
obtained; (d) HDC has not previously granted and shall not grant any rights
in
the HDC Licensed Patents in the Licensed Field that are inconsistent with the
rights and licenses granted to Ciphergen herein or that would cause Ciphergen
not to have a fully paid-up, worldwide, non-exclusive, right and license under
the Licensed Patents in the Licensed Field; and (e) Attachment A includes all
patents and patent applications within the Licensed Field existing as of the
Effective Date.
6.2
Ciphergen
Representations, Warranties and Covenants.
Ciphergen represents, warrants and covenants that (a) Ciphergen has the full
power to enter into this Agreement and to perform its obligations hereunder;
and
(b) Ciphergen represents that it has no interest in and no claim to any of
the
Licensed Patents except as expressly granted in this Agreement.
6.3
Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 6.1 and 6.2
OF
THIS AGREEMENT, NO PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED.
ARTICLE
VII. MISCELLANEOUS
PROVISIONS
7.1
Covenant
not to Xxx:
HDC
agrees that neither HDC nor any affiliate of HDC will xxx Bio-Rad, any Bio-Rad
affiliate or any third party acting on Bio-Rad’s behalf (including Salford
Systems), for its manufacture, offer for sale, sale,
use,
and
importation
of
SELDI-based mass spectrometers when used with the Associated Software. Nothing
herein, however, gives Bio-Rad any separate right to use Support Vector Machine
technology as claimed in the Licensed Patents apart from the SELDI-based mass
spectrometers and Associated Software and the SELDI instrumentation business
that Bio-Rad acquired from Ciphergen, which expressly excludes the addition
or
substitution of third party-based SVM technology to or for
the
Associated Software. This covenant shall be binding upon, and inure to, the
benefit of the parties, their successors, assigns and executors, administrators,
personal representatives and heirs. Further, this covenant not to xxx is
intended to “run with” the patent rights in question. Accordingly, if HDC
assigns such patent rights or any right to enforce such patent rights to any
third party, the relevant assignment agreement shall include a provision
pursuant to which the assignee agrees that its ownership of such patent rights
is subject to, and it will comply with and honor, the covenants set forth
herein.
7.2
Agreement
to Arbitrate:
Any
dispute arising out of or related to this Agreement shall be addressed
diligently and in good faith by the Parties. In the event such dispute cannot
be
resolved within (30) days from the date on which either Party notified the
other
Party in writing of such dispute (or such longer time as agreed upon by the
Parties), the matter shall be submitted to binding arbitration. For this
purpose,
HDC and
Ciphergen agree to forgo
a
jury trial and arbitrate
any future dispute
related
to this Agreement
in San
Francisco, California, before a single arbitrator that
is
acceptable to both Parties.
7.3
Governing
Law.
This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Delaware (without giving effect to the laws,
rules or principles thereof regarding conflict of laws); provided, however,
that
all questions with respect to the interpretation of the claims and the validity
of any patents or patent applications shall be determined in accordance with
the
laws of the respective country in which such patents or patent applications
shall have been granted or filed, as applicable.
7.4
Notices.
Any
notice, request, demand or other communication required or permitted hereunder
shall be in writing, shall reference this Agreement and shall be deemed to
be
properly given: (a) when delivered personally; (b) when sent by facsimile,
with
written confirmation of receipt; (c) five (5) business days after having been
sent by registered or certified mail, return receipt requested, postage prepaid;
or (d) two (2) business days after deposit with a private industry express
courier, with written confirmation of receipt. All notices shall be sent to
the
address set forth below (or to such other address or person as may be designated
by a Party by giving written notice to the other Party pursuant to this
section).
|
Health
Discovery Corporation
|
Ciphergen
Biosystems, Inc.
|
|
Attention:
Chief Executive Officer
|
Attention:
President and Chief Executive Officer
|
|
0
Xxxx Xxxxx Xxxxxx
|
0000
Xxxxxxxxx Xxxxxx
|
|
Xxxxxxxx,
XX 00000
|
Xxxxxxx,
XX 00000
|
7.5
Waiver.
A
waiver, express or implied, by either HDC or Ciphergen of any right under this
Agreement or of any failure to perform or breach hereof by the other Party
hereto shall not constitute or be deemed to be a waiver of any other right
hereunder or of any other failure to perform or breach hereof by such other
Party, whether of a similar or dissimilar nature thereto.
7.6
Severability.
If any
provision of this Agreement is unenforceable or invalid under any applicable
law
or is so held by applicable court decision, such unenforceability or invalidity
shall not render this Agreement unenforceable or invalid as a whole, and, in
such event, such provision shall be changed and interpreted so as to best
accomplish the objectives of the Parties within the limits of applicable law
or
applicable court decision.
7.7
Force
Majeure.
In the
event any Party hereto is prevented from or delayed in the performance of any
of
its obligations hereunder by reason of acts of God, war, strikes, riots, storms,
fires or any other cause whatsoever beyond the reasonable control of the Party,
the Party so prevented or delayed shall be excused from the performance of
any
such obligation to the extent and during the period of such prevention or
delay.
7.8
Cumulative
Remedies.
The
rights and remedies of the Parties as set forth in this Agreement are not
exclusive and are in addition to any other rights and remedies now or hereafter
provided by law or at equity.
7.9
Captions
and Headings.
The
captions and headings used in this Agreement are inserted for convenience only,
do not form a part of this Agreement, and shall not be used in any way to
construe or interpret this Agreement.
7.10
Construction.
This
Agreement has been negotiated by the Parties and shall be interpreted fairly
in
accordance with its terms and without any construction in favor of or against
any Party.
7.11
Counterparts.
This
Agreement may be executed (including, without limitation, by facsimile
signature) in one or more counterparts with the same effect as if the parties
had signed the same document. Each counterpart so executed shall be deemed
to be
an original, and all such counterparts shall be construed together and shall
constitute one Agreement.
7.12
Entire
Agreement; Amendment.
This
Agreement, including the Exhibit(s) attached hereto which are incorporated
herein by reference, constitutes the entire understanding and only agreement
between the Parties with respect to the subject matter hereof and supersedes
any
and all prior or contemporaneous negotiations, representations, agreements
and
understandings, written or oral, that the Parties may have reached with respect
to the subject matter hereof. No agreements altering or supplementing the terms
hereof may be made except by means of a written document signed by the duly
authorized representatives of each of the Parties hereto.
IN
WITNESS WHEREOF, the Parties hereto have caused this instrument to be signed
in
duplicate by their duly authorized officers.
HEALTH
DISCOVERY CORPORATION
Agreed
by: /s/ Xxxxxxx X. Xxxxxxxx
Printed
Name: Xxxxxxx X. Xxxxxxxx
Title:
Chief Executive Officer
Date:
July 10, 2007
CIPHERGEN
BIOSYSTEMS, INC.
Agreed
by: /s/ Xxxx X. Page
Printed
Name: Xxxx X. Page
Title:
Chief Executive Officer
Date:
July 5, 2007
ATTACHMENT
A
Licensed
Patents
LICENSED
INTELLECTUAL PROPERTY
|
Country/
Region
|
Patent/Publication/
Application
No.
|
Description
|
|
U.S.
|
6,128,608
|
Enhancing
Knowledge Discovery Using Multiple Support Vector
Machines
|
|
U.S.
|
6,427,141
|
Enhancing
Knowledge Discovery Using Multiple Support Vector
Machines
|
|
U.S.
|
6,658,395
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
U.S.
|
6,760,715
|
Enhancing
Biological Knowledge Discovery Using Multiple Support Vector
Machines
|
|
U.S.
|
6,789,069
|
Method
of Identifying Patterns in Biological Systems and Method of
Uses
|
|
U.S.
|
6,882,990
|
Method
of Identifying Biological Patterns Using Multiple Data
Sets
|
|
Australia
|
764897
|
Pre-processing
and Post-processing for Enhancing Knowledge Discovery Using Support
Vector
Machines
|
|
Australia
|
780050
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
China
|
ZL00808062.3
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
Europe
|
1192595
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
Norway
|
319,838
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
South
Africa
|
00/7122
|
Pre-processing
and Post-processing for Enhancing Knowledge Discovery Using Support
Vector
Machines
|
|
Canada
|
2,330,878
|
Pre-Processing
and Post-Processing for Enhancing Knowledge Discovery Using Support
Vector
Machines
|
|
Europe
|
1082646
|
Pre-Processing
and Post-Processing for Enhancing Knowledge Discovery Using Support
Vector
Machines
|
|
Hong
Kong
|
011065063
|
Pre-Processing
and Post-Processing for Enhancing Knowledge Discovery Using Support
Vector
Machines
|
|
India
|
2000/00580
|
Pre-Processing
and Post-Processing for Enhancing Knowledge Discovery Using Support
Vector
Machines
|
|
Canada
|
2,371,240
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
India
|
2001/01329
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
Israel
|
146705
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
Japan
|
2000-620577
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
South
Korea
|
7015064/2001
|
Enhancing
Knowledge Discovery from Multiple Data Sets Using Multiple Support
Vector
Machines
|
|
Canada
|
2,388,595
|
Method
of Identifying Patterns in Biological Systems and Method of
Uses
|
|
Europe
|
1236173
|
Method
of Identifying Patterns in Biological Systems and Method of
Uses
|
|
Germany
|
60024452
|
Method
of Identifying Patterns in Biological Systems and Method of Uses
(German
patent from XX0000000)
|
|
Japan
|
2001-534088
|
Method
of Identifying Patterns in Biological Systems and Methods of
Uses
|
ATTACHMENT
B
Dismissal
