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EXHIBIT 10.16
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
THE XXXXXXX INSTITUTE
AND
GMP | DIAGNOSTIC | PROGNOSTIC MARKERS, INC.
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EXCLUSIVE LICENSE AGREEMENT
This Agreement is made and entered into as of this 7th day of June,
2000 (the Effective Date), by and between The Xxxxxxx Institute, a 501(c)(3)
corporation duly organized and existing under the laws of the State of
California and having its principal office at 00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xx
Xxxxx, XX 00000 (hereinafter referred to as "Licensor"), and GMP|Diagnostic|
Prognostic Markers, Inc., a business corporation organized and existing under
the laws of the State of Delaware and having its principal office at One East
Broward Boulevard, Suite 1701, Xxxx Xxxxxxxxxx, XX, 00000 (hereinafter referred
to as "Licensee").
WHEREAS, Licensor is the owner of certain Patent Rights (as that term
shall be defined hereafter) and has the right to grant exclusive licenses under
said Patent Rights, subject only to a royalty-free, nonexclusive license
heretofore granted to the United States Government for those patents developed
with U.S. Government funding;
WHEREAS, Licensor desires to have the Patent Rights utilized in the
public interest and is willing to grant a license thereunder in the Field of
Use on the terms and conditions described herein;
WHEREAS, Licensee has represented to Licensor that Licensee is ready,
willing and able to engage in the commercial development, production,
manufacture, marketing and sale of Licensed Products (as that term shall be
defined hereafter) and/or the use of Licensed Processes (as that term shall be
defined hereafter) and that it shall commit itself to a thorough, vigorous and
diligent program of research and development with respect to the Patent Rights
in the Field of Use in accordance with the terms and conditions described
herein so that public utilization shall result therefrom; and
WHEREAS, Licensee desires to obtain an exclusive license under the
Patent Rights on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
For the purpose of this Agreement, the following words and phrases
shall have the meanings set forth below:
A. "Affiliate" shall mean any company or other legal entity
controlling, controlled by or under common control with Licensee. For purposes
of the definition of "Affiliate" the term "control" shall mean: (i) in the case
of a corporate entity, the direct or indirect ownership of at least a majority
of the stock or participating shares entitled to vote for the election of
directors of that entity; (ii) in the case of a partnership, the power
customarily held by a general partner to direct the management and policies of
such partnership; or (iii) in the case of a joint venture, whether in
corporate, partnership or other legal form, a more than nominal economic
interest and managerial role.
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B. "Children's Licenses" shall mean the License Agreements
between Children's Hospital and Licensee of even date pertaining to the Patent
Rights identified in Appendix 1.
C. "Combination Product(s) or Process(es)" shall mean a product
or process that includes a Marker Panel Product or Process (the "Patented
Components") sold in combination with another component(s) whose manufacture,
use or sale by an unlicensed party would not constitute an infringement of the
Patent Rights under this Agreement or the Children's Licenses (the "Unpatented
Component").
D. "Field of Use" shall mean the diagnosis or prognosis of any
disease or condition in humans or animals.
E. "First Commercial Sale" shall mean: (i) the first sale of the
first Marker Panel Product or use of the first Marker Panel Process by
Licensee, following approval of such Marker Panel Product or Process by the
Food and Drug Administration, if any such approval is necessary; or (ii) when
such governmental approval is not required, the first commercial sale of the
first Marker Panel Product, or the first commercial use of the first Marker
Panel Process.
F. "Know-how" shall mean any and all manufacturing information,
technical information, testing and analytic methods and specifications that
Licensor owns or has sufficient rights to include in the license grant in
Article II hereof, necessary for research, development or manufacture of any
Licensed Product or Licensed Process in the Field of Use.
G. "Licensed Product" shall mean any product or part thereof:
1. The manufacture, use or sale of which would infringe
any one of the issued, valid, enforceable, unexpired claim(s) or any one of the
pending claim(s) contained in the Patent Rights in any country.
2. The manufacture of which uses a "Licensed Process"
as that term shall be defined hereafter.
H. "Licensed Process" shall mean any process that would infringe
any one of the issued, valid, enforceable, unexpired claim(s) or any one of the
pending claim(s) contained in the Patent Rights in any country.
I. "Licensee" shall mean Licensee and/or its permitted
successor(s) or assignee(s) and/or its Affiliates.
J. "Marker Panel Product" shall mean any product or part
thereof:
1. The manufacture, use or sale of which in any country
would infringe any one of the issued, valid, enforceable, unexpired claim(s) or
any one of the pending claim(s) contained in any of the patent rights under the
License Agreement for the Children's Licenses as identified in Appendix 1, or
the Patent Rights under this Agreement.
2. The manufacture of which uses a "Marker Panel
Process" as that term shall be defined hereafter.
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K. "Marker Panel Process" shall mean any process that would
infringe any one of the issued, valid, enforceable, unexpired claim(s) or any
one of the pending claim(s) contained in the patent rights under the Children's
Licenses or Patent Rights under this Agreement.
L. "Net Sales" shall mean gross receipts received by Licensee or
Licensee's Affiliates for Marker Panel Products or Processes produced
hereunder, less the sum of the following:
1. Trade, quantity or cash discounts (including
refunds, rebates, chargebacks and retroactive price adjustments) allowed in
amounts customary in the trade.
2. Sales taxes, tariff duties and/or use taxes directly
imposed and with reference to particular sales.
3. Freight, storage and delivery charges (including
insurance premiums related to transportation and delivery) prepaid or allowed
to the extent reflected on the customer invoice.
4. Amounts allowed or credited on returns.
No deductions shall be made for commissions paid to individuals
whether they are with independent sales agencies or regularly employed by
Licensee and on its payroll or for the cost of collections or any reserves with
respect to potentially uncollectible accounts. Marker Panel Products or
Processes shall be considered "sold" when billed out or invoiced.
Notwithstanding anything herein to the contrary, the following shall not be
considered a sale of a Marker Panel Product or Process under this Agreement:
(i) the transfer of a Marker Panel Product or Process to an Affiliate for sale
by the Affiliate in a transaction that will be royalty bearing; (ii) the
transfer of a Marker Panel Product or Process to a third party without
consideration to Licensee in connection with the development or testing of a
Marker Panel Product or Process; (iii) the transfer of a Marker Panel Product
or Process to a third party without consideration in connection with the
marketing or promotion of the Marker Panel Product or Process; or (iv) sale or
use of a Marker Panel Product or Process by a Sublicensee.
M. "Patent Rights" shall mean all of the following intellectual
property that Licensor owns or has rights to during the term of this Agreement:
1. The United States and foreign patents and/or patent
applications listed in Appendix 2 attached hereto and incorporated herein by
reference and divisionals and continuations thereof to the extent that they are
(a) directly related to the subject matter specifically described in the
patents and/or patent applications listed in Appendix 2 and (b) within the
Field of Use.
2. The United States and foreign patents issued from
the applications listed in Appendix 2, and from divisionals and continuations
of those applications to the extent that they are (a) directly related to the
subject matter specifically described in the patents and/or patent applications
listed in Appendix 2 and (b) within the Field of Use.
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3. Claims of United States and foreign continuations in
part applications and of the resulting patents, to the extent that they are (a)
directly related to the subject matter specifically described in the United
States and foreign patent applications described in Appendix 2 and (b) within
the Field of Use.
4. Claims of all later filed foreign patent
applications, and of the resulting patents, to the extent that they are based
on subject matter specifically described in the United States patent and/or
patent applications described in subparagraphs 1, 2 or 3 of this Article I,
Paragraph M.
5. Any reissues, divisions, amendments, reexaminations
or extensions of the United States or foreign patents described in
subparagraphs 1, 2, 3 or 4 of this Article I, Paragraph M.
6. All enhancements and improvements consisting of
claims not presented in, but dominated by, the claims contained in the patents
and patent applications identified in subparagraphs 1 through 5 above, which
are conceived of, or conceived of and first reduced to practice, prior to or in
the course of the Program, as such term is used in the Sponsored Research
Agreement.
N. "Research Program" shall mean the research program between
Licensee and Licensor that is sponsored by Licensee pursuant to the Sponsored
Research Agreement.
O. "Sponsored Research Agreement" shall mean the Sponsored
Research Agreement between the parties, dated this even date herewith,
including any extensions and renewals of the same.
P. "Sublicensee" shall mean a person or entity unaffiliated with
Licensee to whom Licensee has granted an arm's length sublicense under this
Agreement.
Q. "Sublicense Consideration" shall mean consideration of any
kind received by the Licensee from a sublicense for sales of Marker Panel
Products or Processes or fees received, in whatever form (including, without
limitation, cash, securities or in-kind consideration), such as upfront fees or
milestone fees and including any premium paid by the Sublicensee over Fair
Market Value for stock of the Licensee received in consideration for such
sublicense. However, not included in Sublicense Consideration are amounts paid
to the Licensee by the Sublicensee for product development, research work,
clinical studies and regulatory approvals performed by or for the Licensee and
related to the Marker Panel Product, or third parties on their behalf pursuant
to a specific agreement including a performance plan and commensurate budget
related to the Marker Panel Product. The term "Fair Market Value for stock" as
used in this Paragraph shall mean the average of the closing prices of the
stock on all securities exchanges on which the stock may at the time be listed
or, if there have been no sales on any such exchange on the date the value is
being determined (the "Valuation Date"), the average of the highest bid and
lowest asked prices on all such exchanges at the end of the Valuation Date, or,
if the stock is not so listed, the average of the representative bid and asked
prices quoted in the NASDAQ System as of 4:00 p.m., New York time, on the
Valuation Date or, if on such day the stock is not quoted in the NASDAQ System,
the average of the highest bid and lowest asked prices on the Valuation
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Date in the domestic over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor organization, in each
such case averaged over a period of twenty (20) days consisting of the
Valuation Date and the nineteen (19) consecutive business days prior to such
day. If on the Valuation Date the stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
Fair Market Value of each share of such stock shall be the fair market value of
a share of the stock as of the Valuation Date, as reasonably determined by the
Board.
ARTICLE II. GRANT
A. Licensor hereby grants to Licensee the worldwide right and
exclusive license to make, have made, use and sell the Licensed Products and to
practice the Licensed Processes in the Field of Use to the end of the term for
which the Patent Rights are granted, unless sooner terminated as provided in
this Agreement.
B. Notwithstanding anything above to the contrary, Licensor
shall retain a royalty-free, nonexclusive, irrevocable license for the Field of
Use (i) to practice, and to sublicense other non-profit research organizations
to practice, the Patent Rights for noncommercial research purposes only, and
(ii) to transfer biological materials and information covered by the Patent
Rights to research institutions and other non-profit collaborators for
noncommercial research purposes only, pursuant to Material Transfer Agreements
providing that any and all unmodified descendants and derivatives of materials
and information covered by the Patent Rights will remain property of the
Institute. For purposes of this paragraph, noncommercial research purposes
shall exclude the practice of the Patent Rights to perform clinical research
for a for-profit organization, to produce or manufacture products for general
sale, or to perform diagnostic or prognostic services for a fee.
C. The license granted hereunder shall be subject to the rights
of the United States government, if any, under applicable laws or regulations.
D. Subject to the terms of this Agreement, including the rights
of termination set forth by Article XIII, Licensor hereby grants to Licensee
the worldwide, irrevocable, perpetual right and non-exclusive license to
practice Know-How to develop, test, make, have made, use, sell, have sold,
offer for sale and import for use or resale the Licensed Products and Licensed
Processes in the Field of Use for the term of this Agreement.
E. Licensee agrees that Licensed Products leased or sold in the
United States shall be manufactured substantially in the United States.
F. In order to establish exclusivity for Licensee, Licensor
hereby agrees that it shall not, without Licensee's prior written consent,
grant to any other commercial party a license to make, have made, use, lease
and/or sell Licensed Products or to use the Licensed Processes in the Field of
Use during the period of time in which this Agreement is in effect, except as
otherwise specified in this Agreement or as required by law to grant rights to
the United States Government.
G. Licensee shall have the right to enter into sublicensing
agreements with respect to any of the rights, privileges, and licenses granted
hereunder, subject to the terms and conditions
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hereof. Such sublicenses will terminate upon the termination of Licensee's
rights granted herein unless events of default are cured by Licensee or
Sublicensee within thirty (30) days of notification by Licensor of default
and/or as otherwise provided by the terms of this Agreement.
H. Licensee agrees that any sublicense granted by it shall
provide that the obligations to Licensor of Articles II (Grant), V (Reports and
Records), VII (Infringement), VIII (Insurance and Indemnification), IX (Export
Controls), X (Non-Use of Names), XI (Assignment), XII (Dispute Resolution),
XIII (Term and Termination) and XV (Miscellaneous Provisions) of this Agreement
shall be binding upon the Sublicensee as if it were a party to this Agreement.
Licensee further agrees to attach a copy of this Agreement to all sublicense
agreements, deleting economic terms when and as appropriate.
I. Licensee agrees to provide to Licensor notice of any
sublicense granted hereunder and to forward to Licensor a copy of any and all
fully executed sublicense agreements within thirty (30) days of execution
thereof. Licensee further agrees to forward to Licensor annually a copy of such
reports received by Licensee from its Sublicensees during the preceding twelve
(12) month period as shall be pertinent to a royalty accounting under the
applicable sublicense, and to fully comply with Paragraphs C and D of Article
X.
X. Licensee shall advise Licensor in writing of any
consideration received from any Sublicensee in connection with a grant of a
sublicense of the Patent Rights.
K. Licensor agrees that if Licensee has provided to Licensor
notice that Licensee has granted a sublicense to a Sublicensee under this
Agreement, then in the event Licensor terminates this Agreement for any reason
provided hereafter, Licensor shall provide to such Sublicensee no less than
thirty (30) days prior to the effective date of said termination, written
notice of said termination at the address specified by Licensee to Licensor in
Licensee's notice to Licensor under Paragraph H of this Article II. Licensor
agrees that upon the Sublicensee's notice as described below and provided the
Sublicensee is not in breach of its sublicense, Licensor shall grant to such
Sublicensee license rights and terms equivalent to the sublicense rights and
terms which the Licensee shall have granted to said Sublicensee; provided that
the Sublicensee shall remain a Sublicensee under this Agreement for a period of
at least sixty (60) days following receipt of notice from Licensor. Sublicensee
shall during said sixty (60) day period provide to Licensor notice wherein the
Sublicensee: (i) reaffirms the terms and conditions of this Agreement as it
relates to the rights the Sublicensee has been granted under the sublicense;
(ii) agrees to abide by all of the terms and conditions of this Agreement
applicable to sublicensees and to discharge directly all pertinent obligations
of Licensee which Licensee is obligated hereunder to discharge; and (iii)
acknowledges that Licensor shall have no obligations to the Sublicensee other
than its obligations set forth in this Agreement with regard to the Licensee's
obligations under the pertinent sublicense.
L. The license granted hereunder shall not be construed to
confer any rights upon Licensee by implication, estoppel or otherwise as to any
technology not described in the Patent Rights, or as to any field not described
in the Field of Use.
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
ARTICLE III. DUE DILIGENCE
A. The parties acknowledge that Licensee has provided to
Licensor prior to the date of execution of this Agreement a written
commercialization development plan ("Development Plan") setting forth the
initial indications and markets for Licensed Products and Licensed Processes.
The Development Plan is attached hereto as Appendix 3 and is hereby
incorporated herein by reference.
B. Licensee shall use commercially reasonable efforts to achieve
the objectives set forth in the Development Plan. Licensee shall be deemed to
have used such commercially reasonable efforts so long as it has or has caused
third parties to timely fund the Development Plan in accordance with the budget
decided therein.
ARTICLE IV. ROYALTIES AND OTHER PAYMENTS
A. For the rights, privileges and exclusive licenses granted
hereunder, Licensee shall pay to Licensor the following amounts in the manner
hereinafter provided until the end of the term of the last to expire Patent
Right, unless this Agreement shall be sooner terminated as hereinafter
provided:
1. A license issue fee of [***], which license issue fee
shall be deemed earned and due immediately upon the execution of this Agreement.
2. Licensee shall reimburse Licensor for expended
patent costs to date in an amount not to exceed [***] due immediately upon
receipt of an invoice and supporting documentation.
3. Licensee shall make the following milestone payments
to Licensor upon the occurrence of the following events ("Milestones"):
a. [***] upon the First Commercial Sale; and
b. A License Maintenance Fee of [***], which
shall be payable one year after the execution of this Agreement.
4. [***] of the "Running Royalties." Running Royalties
shall mean an amount equal to [***] of the first [***] of Net Sales and [***] of
Net Sales over that amount.
5. In the event Licensee has granted sublicenses under
the License Agreements, Licensor is entitled to [***] of Sublicense
Consideration.
B. No multiple royalties shall be payable because any Marker
Panel Product or Marker Panel Process, its manufacture, use, lease or sale are
or shall be covered by more than one Patent Rights patent application or Patent
Rights patent licensed under this Agreement.
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
C. To the extent that Licensee obtains subsequent to the date of
this Agreement licenses to third party patents or other intellectual property
that are necessary to produce or sell the specific markers covered by the
Patent Rights for Marker Panel Products or Processes, Licensee may deduct from
the Running Royalties and Sublicense Consideration due to Licensor twenty
percent (20%) of the royalties due on such third party patents or intellectual
property, up to an amount equal to fifty percent (50%) of Running Royalties and
Sublicense Consideration due Licensor hereunder.
D. For purposes of calculating Running Royalties for a
Combination Product or Process one of the following methods will be used:
1. By multiplying the Net Sales of the Combination
Product or Combination Process during the applicable royalty accounting period
("accounting period") by a fraction, the numerator of which is the aggregate
gross selling price of the Licensed Component(s) contained in the Combination
Product or Combination Process if sold separately, and the denominator of which
is the sum of the gross selling price of the Licensed Component(s) and the
Unlicensed Component(s) contained in the Combination Product or Combination
Process if sold separately; or
2. In the event that no such separate sales are made of
the Licensed Component(s) or the Unlicensed Components during the applicable
accounting period, Net Sales for purposes of determining Running Royalties
payable hereunder shall be calculated by multiplying the Net Sales of the
Combination Product or Combination Process by a fraction, the numerator of
which is the fair market value of the Licensed Component(s) and the denominator
of which is the sum of the fair market value of the Licensed Component(s) and
the Unlicensed Component(s) contained in the Combination Product or Combination
Process.
E. Running Royalties payments shall be paid in United States
dollars in La Jolla, California, or at such other place as Licensor may
reasonably designate consistent with the laws and regulations controlling in
any foreign country. If the currency conversion shall be required in connection
with the payments of Running Royalties or other amounts hereunder, the
conversion shall be made by using the exchange rate prevailing at Fleet Bank on
the last business day of the calendar quarterly reporting period to which such
royalty payments relate.
F. The Running Royalties payments set forth in this Agreement
shall, if overdue, bear interest until payment at a per annum rate of four
percent (4%) above the prime rate in effect at Fleet Bank on the due date. The
payment of such interest shall not foreclose Licensor from exercising any other
rights it may have under this Agreement as a consequence of the lateness of any
payment.
G. In consideration of the issuance of the license of the Patent
Rights as contained in this Agreement, Licensee shall issue a total of [***]
shares of Common Stock of Licensee, $.001 par value per share, (the "Shares") in
the name of Licensor and such persons as Licensor shall designate in writing to
Licensee. Licensee represents to Licensor that, as of the Effective Date, the
aggregate number of Shares equals no less than [***] of the Licensee's issued
and outstanding Common Stock calculated on a "Fully Diluted Basis." For purposes
of this Paragraph, "Fully Diluted Basis" shall mean
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
that the total number of issued and outstanding shares of the Licensee's Common
Stock shall be calculated to include conversion of all issued and outstanding
securities then convertible into common stock, the exercise of all then
outstanding options and warrants to purchase shares of common stock, whether or
not then exercisable, and shall assume the issuance or grant of all securities
reserved for issuance pursuant to any Licensee stock or stock option plan in
effect on the date of the calculation.
H. The equity interest held by Licensor shall not be diluted
below [***] until the earlier of (i) an initial public offering of securities by
Licensee, or (ii) the funding of Licensee by GMP|Companies, Inc. or other
entities has reached [***] in the aggregate.
ARTICLE V. REPORTS AND RECORDS
A. Licensee shall keep, and shall require its Affiliates and
Sublicensees to keep, full, true and accurate books of account in accordance
with generally accepted accounting principles and containing sufficient detail
to enable Licensor to determine the royalty and other amounts payable to
Licensor under this Agreement and the accuracy of the reports required under
Paragraph C of this Article V. Said books of account shall be kept at
Licensee's principal place of business or the principal place of business of
the appropriate division of Licensee to which this Agreement relates. Said
books and the supporting data shall be retained for at least five (5) years
following the end of the calendar year to which they pertain.
B. Licensor shall have the right to audit the books of account
described above from time to time to the extent necessary to verify the reports
provided for herein or compliance in other respects with this Agreement.
Licensor or its agents shall perform these audits at Licensor's expense during
Licensee's regular business hours. If as a result of an audit it is determined
that additional amounts owed to Licensor represent more than 10% of the
originally reported amount, Licensee shall reimburse Licensor for all
reasonable costs incurred by Licensor in conducting the applicable audit.
C. Licensee shall deliver to Licensor true and accurate reports
by March 31, for the period July 1 through December 31 of the previous year,
and on September 30, for the period January 1 through June 30 of the current
year, giving such particulars of the business conducted by Licensee, its
Affiliates and its Sublicensees under this Agreement as shall be pertinent to a
royalty accounting hereunder and to verify Licensee's activities with respect
to achieving the objectives of the Development Plan described in Article III
above. These reports shall include at least the following:
1. Number of Marker Panel Products or Processes
manufactured and sold.
2. Aggregate xxxxxxxx for Marker Panel Products and
Processes sold.
3. Accounting for all Marker Panel Products and
Processes sold.
4. Applicable deductions including an accounting of all
funds that have been set aside for product development, research work, clinical
studies and regulatory approvals.
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5. Total royalties due.
6. Names and addresses of all Sublicensees of Licensee.
7. Payments received by Licensee from Affiliates and
Sublicensees.
8. Marker Panel Products manufactured and sold to the
U.S. Government. No royalty obligations shall arise from sales or use by, for
or on behalf of the U.S. Government in view of a royalty-free, nonexclusive
license that may heretofore have been granted to the U.S. Government.
9. All consideration received from Sublicensees.
D. Until the First Commercial Sale, Licensee shall provide to
Licensor at least annually, on each anniversary of the Effective Date of this
Agreement, reasonable detail regarding the activities of Licensee and
Licensee's Affiliates and Sublicensees relative to achieving the objectives set
forth in the Development Plan in a timely manner, including but not limited to,
reports of financial expenditures to achieve said objectives, research and
development activities, regulatory approvals, strategic alliances and
manufacturing, sublicensing and marketing efforts.
E. With each such report submitted, Licensee shall pay to
Licensor the Running Royalties and other consideration, if any, due and payable
under this Agreement. If no Running Royalties or other consideration, if any,
shall be due, Licensee shall so report.
F. On or before the ninetieth (90th) day following the close of
Licensee's fiscal year, Licensee shall provide Licensor with Licensee's
certified financial statements for the preceding fiscal year, including at a
minimum a balance sheet and an operating statement.
ARTICLE VI. PATENT PROSECUTION
A. Licensor shall apply for, seek prompt issuance of, and
maintain during the term of this Agreement the Patent Rights set forth in
Appendix 2. The prosecution, filing and maintenance of all Patent Rights
applications and patents shall be the primary responsibility of Licensor.
Licensee shall have reasonable opportunities to advise Licensor, including
concerning the selection and/or retention of counsel, and shall cooperate with
Licensor in the prosecution, filing and maintenance of the Patent Rights.
Licensor agrees to implement requests from Licensee to the extent such requests
are reasonable and not in conflict with the policies and objectives of the
Licensor.
B. Licensee shall reimburse to Licensor the amount of all fees
and costs relating to the filing, prosecution and maintenance of the Patent
Rights incurred after the date of this Agreement. Licensor shall provide to
Licensee an itemized invoice of all such fees and Licensee shall pay to
Licensor all amounts due under said invoice within ten (10) days of the date of
said invoice. If the Patent Rights are licensed to third parties, such patent
costs shall be equitably apportioned.
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C. In the event Licensor elects not to pursue, maintain or
retain a particular Patent Right licensed to Licensee hereunder, Licensor shall
so notify Licensee in sufficient time for Licensee to assume the filing,
prosecution and/or maintenance of such application or patent at Licensee's
expense. In such event, Licensor shall provide to Licensee any authorization
necessary to permit Licensee to pursue and/or maintain such Patent Right.
Licensee shall have no further royalty obligations under this Agreement with
respect to any such Patent Right.
ARTICLE VII. INFRINGEMENT
A. Licensee and Licensor shall each inform the other promptly in
writing of any alleged infringement by a third party of the Patent Rights in
the Field of Use and of any available evidence thereof.
B. Licensor shall have the first right to enforce any patent
within Patent Rights against any infringement or alleged infringement, past or
future, thereof, and shall at all times keep Licensee informed as to the status
thereof. Licensor may, in its sole judgment and at its own expense, institute
suit against any such infringer or alleged infringer, past or future, and
control, settle, and defend such suit in a manner consistent with the terms and
provisions hereof. Should any damages award or settlement obtained exceed the
unreimbursed out-of-pocket expenses and legal fees of such action, the
remaining portion shall be treated as Sublicense Consideration. Licensor shall
indemnify Licensee against any order for costs that may be made against
Licensee in such proceedings.
C. If Licensor elects not to enforce any patent within the
Patent Rights in the Field of Use, then it shall so notify Licensee in writing
within six (6) months of receiving notice that an infringement exists, and
Licensee may, at its own expense, take steps to enforce any patent, for past or
future infringement, in a manner consistent with the terms and provisions
hereof. Should any damages award or settlement obtained exceed the costs of
such action the remaining portion shall be treated as Sublicense Consideration.
Licensee shall indemnify Licensor and other licensees of the Patent Rights
against any order for costs that may be made against Licensor in such
proceedings.
Licensee shall fully inform and consult with Licensor with respect to
all of the steps referred to in the preceding sentence, including without
limitation initiating or prosecuting litigation. Licensor shall have the right
to (i) approve Licensee's choice of counsel in any such litigation, and (ii)
review in advance all major decisions, positions or actions that Licensee
wishes to take in any such litigation, which would impair any interest of
Licensor in the Patent Rights, including interests of Licensor's third party
licensees. All such decisions, positions or actions shall be promptly reviewed
by the Licensor (i.e. within 20 days), and Licensee shall consider, and discuss
with Licensor, in good faith any concerns or issues Licensor may raise.
D. In the event Licensee shall undertake the enforcement and/or
defense of the Patent Rights by litigation, Licensee may withhold up to fifty
percent (50%) of the payments otherwise thereafter due to Licensor under
Paragraphs A(4) and (5) of Article IV above and apply the same toward
reimbursement of Licensee's unreimbursed out-of-pocket expenses and legal fees
of such action. Any recovery of damages by Licensee for each such suit shall be
applied first in satisfaction of any unreimbursed expenses and legal fees of
Licensee relating to such suit and
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next toward reimbursement of Licensor for any payments under Article IV past
due or withheld and applied pursuant to this Article VII. The balance remaining
from any such recovery shall be treated as Sublicense Consideration.
E. In the event that a declaratory judgment action alleging
invalidity or noninfringement of any of the Patent Rights shall be brought
against Licensee, Licensor, at its option, shall have the right, within thirty
(30) days after commencement of such action, to intervene and participate in
the defense of the action at its own expense.
F. In any infringement suit which either party may institute to
enforce the Patent Rights pursuant to this Agreement, the other party hereto
shall, at the request and the expense of the party initiating such suit,
cooperate in all reasonable respects and, to the extent reasonably possible,
have its employees testify when requested and make available relevant records,
papers, information, samples, specimens, and the like.
G. Licensee shall during the exclusive period of this Agreement
have the sole right subject to the terms and conditions hereof to sublicense
any alleged infringer for future use of the Patent Rights. Any upfront fees
paid to Licensee shall be Sublicense Consideration.
H. Any settlement of an infringement action described in
Paragraph B and C of this Article VII shall be subject to mutual consent of the
Licensor and Licensee, which consent shall not be unreasonably withheld,
conditioned or delayed. Licensee acknowledges and agrees that it shall not be
unreasonable for Licensor to withhold its consent to such a settlement at the
request of a third party licensee of Licensor under patents or patent
applications related to the Patent Rights if such third party licensee's rights
could be materially and adversely affected by such settlement. In addition,
Licensee shall have the right to consent, which consent shall not be
unreasonably withheld, conditioned or delayed, to any settlement of patent
litigation by Licensor or any third party licensee of Licensor related to the
Patent Rights if Licensee's rights could be materially affected by such
settlement.
ARTICLE VIII. UNIFORM INDEMNIFICATION
AND INSURANCE PROVISIONS
A. Licensee shall indemnify, defend and hold harmless Licensor,
its corporate affiliates, current or future directors, trustees, officers,
faculty, medical and professional staff, employees, students and agents and
their respective successors, heirs and assigns (the "Indemnitees"), against any
liability, damage, loss or expense (including reasonable attorney's fees and
expenses of litigation) incurred by or imposed upon the Indemnitees or any one
of them in connection with any claims, suits, actions, demands or judgments
arising out of any theory of product liability (including, but not limited to,
actions in the form of tort, warranty, or strict liability) concerning any
product, process or service made, used or sold by Licensee or any Sublicensee
pursuant to any right or license granted to Licensee under this Agreement.
B. Licensee agrees, at its own expense, to provide attorneys
reasonably acceptable to Licensor to defend against any actions brought or
filed against any party indemnified by Licensee hereunder with respect to the
subject of indemnity contained herein, whether or not such actions are
rightfully brought.
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C. Licensee's indemnification under Article VIII, Paragraph A
and duty to defend under Article VIII, Paragraph B shall not apply to any
liability, damage, loss or expense to the extent that it is directly
attributable to the negligent activities, reckless misconduct or intentional
misconduct of the Indemnitees.
D. Beginning at the time as any product, process or service
relating to, or developed pursuant to, this Agreement is being used in clinical
trials, commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or
agent of Licensee, Licensee shall, at its sole cost and expense, procure and
maintain policies of commercial general liability and products liability
insurance in amounts not less than $2,000,000 per incident and $2,000,000
annual aggregate, with an insurer which is A.M. Best rated "A" or higher, and
naming the Indemnitees as additional insureds. Such commercial general
liability insurance shall provide (i) product liability coverage (including for
clinical trials) and (ii) contractual liability coverage for Licensee's
indemnification under Article VIII, Paragraphs A through C of this Agreement.
If Licensee elects to self-insure all or part of the limits described above
(including deductibles or retentions which are in excess of $250,000 annual
aggregate), such self-insurance program must be acceptable to Licensor and the
Risk Management Foundation of the Harvard Medical Institutions, Inc. The
minimum amount of insurance coverage required under this Article VIII,
Paragraph D shall not be construed to create a limit of Licensee's liability
with respect to its indemnification under Article VIII, Paragraphs A through C
of this Agreement.
E. Licensee shall provide Licensor with written evidence of such
insurance upon request of Licensor. Licensee shall provide Licensor with
written notice at least thirty (30) days prior to the cancellation, non-renewal
or material change in such insurance. If Licensee does not obtain replacement
insurance providing comparable coverage within such thirty (30) day period,
Licensor shall have the right to terminate this Agreement effective at the end
of such thirty (30) day period. In such an event, Licensee shall be given
written notice by Licensor of its termination of this Agreement and Licensee
shall have thirty (30) days to reinstate this Agreement by providing written
evidence of replacement insurance providing comparable coverage.
F. Licensee shall maintain such commercial general liability
insurance during (i) the period that any such product, process or service is
being commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of
Licensee and (ii) a reasonable period after the period referred to above, which
in no event shall be less than fifteen (15) years, unless tail insurance is
obtained.
G. Licensee represents and warrants that the interests in the
Patent Rights granted to Licensee are free and clear of all liens, claims and
encumbrances of third parties claiming by through or under Licensor except as
otherwise described in the Agreement. OTHER THAN WARRANTIES SET FORTH HEREIN,
LICENSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTY OF NONINFRINGEMENT, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE
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RESEARCH PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO
LICENSEE HEREUNDER AND HEREBY DISCLAIMS THE SAME.
H. Article VIII, Paragraphs A through G shall survive expiration
or termination of this Agreement.
ARTICLE IX. EXPORT CONTROLS
It is understood that Licensor is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United
States Government and/or written assurances by Licensee that Licensee shall not
export data or commodities to certain foreign countries without prior approval
of such agency. Licensor neither represents that a license shall not be
required, nor that if required, it shall be issued.
ARTICLE X. NON-USE OF NAMES
Licensee shall not use the name of Licensor nor the name of any of its
corporate affiliates or employees, nor any adaptation thereof, without prior
written consent, or deemed consent, as defined in the second sentence of this
Article, obtained from Licensor in each case, which consent shall not be
unreasonably withheld. For the purposes of this Article X, Licensor shall be
deemed to have consented to the use of its name, in form and content, unless it
objects in writing not less than ten (10) business days after Licensor's actual
receipt, as confirmed by Licensee, of Licensee's proposed use of Licensor's
name, accompanied by a request for consent, which request shall specify that
(a) Licensor is to provide notice of any objections within ten (10) business
days of receipt of the notice and (b) failure to timely object shall be deemed
to constitute consent. Any Licensee request of the type referred to in the
preceding sentence shall be directed to the attention of: Office of the
President, The Xxxxxxx Institute, 00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xx Xxxxx,
Xxxxxxxxxx 00000.
ARTICLE XI. ASSIGNMENT
A. Except as otherwise provided herein, this Agreement is not
assignable in whole or in part, and any attempt to do so shall be void and of
no effect.
B. Licensor may assign this Agreement at any time to any
corporate affiliate of Licensor without the prior consent of Licensee.
C. Except as provided in Article XI, Paragraph D below, Licensee
may assign this Agreement to another entity only with the prior written consent
of Licensor, which consent shall not be unreasonably withheld or delayed.
D. Notwithstanding anything herein to the contrary, in the event
Licensee merges with another entity, is acquired by another entity, or sells
all or substantially all of its assets to another entity, Licensee may assign
its rights and obligations hereunder to, in the event of a
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merger or acquisition, the surviving entity, and in the event of a sale, the
acquiring entity, without Licensor's consent so long as: (i) Licensee is not
then in breach of this Agreement; (ii) the proposed assignee has a net worth at
least equivalent to the net worth Licensee had as of the date of this
Agreement; (iii) the proposed assignee has available resources and sufficient
scientific, business and other expertise comparable to Licensee in order to
satisfy its obligations hereunder; (iv) Licensee provides written notice of the
assignment to Licensor, together with documentation sufficient to demonstrate
the requirements set forth in subparagraphs (i) through (iii) above, at least
thirty (30) days prior to the effective date of the assignment; and (v)
Licensor receives from the assignee, in writing, at least thirty (30) days
prior to the effective date of the assignment: (a) reaffirmation of the terms
of this Agreement; (b) an agreement to be bound by the terms of this Agreement;
and (c) an agreement to perform the obligations of Licensee under this
Agreement.
ARTICLE XII. DISPUTE RESOLUTION AND ARBITRATION
A. Except for the right of either party to apply to a court of
competent jurisdiction for a temporary restraining order, a preliminary
injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm, any and all claims, disputes or controversies arising under,
out of, or in connection with the Agreement, including any dispute relating to
patent validity or infringement, which the parties shall be unable to resolve
within sixty (60) days shall be mediated in good faith. The party raising such
dispute shall promptly advise the other of such claim, dispute or controversy
in writing, describing the dispute in reasonable detail. By no later than five
(5) business says after the recipient has received such notice of dispute, each
party shall have selected a representative who shall have the authority to bind
such party and shall have advised the other party in writing of the name and
title of such representative.
B. Within fifteen (15) days of receipt of a request for
mediation as described above, the parties agree to commence mediation in the
City of Boston, Commonwealth of Massachusetts in accordance with the policies
and procedures of Endispute, Inc. ("Endispute"), or in the event that Endispute
is no longer in operation, in accordance with the policies and procedures of
the American Arbitration Association (the "AAA"). The parties shall select a
mediator acceptable to both of them from a list provided by Endispute. The
parties agree to cooperate in good faith in said mediator's efforts to assist
the parties to resolve the dispute. Each party agrees to pay fifty percent
(50%) of the costs of said mediation. If the matter has not been resolved
within thirty (30) days of the commencement of mediation, either party may
request in writing that the matter be submitted to arbitration in accordance
with the following subparagraph.
C. Any and all claims, disputes or controversies arising under,
out of, or in connection with this Agreement, which have not been resolved by
good faith negotiations between the parties or by mediation shall be resolved
by final and binding arbitration in Boston, Massachusetts in accordance with
the rules of the AAA then obtaining and all expenses, in connection therewith,
will be shared equally, except for the expense of the parties' respective legal
counsels. A single arbitrator shall be mutually agreed upon and if the parties
are unable to agree on a mutually acceptable arbitrator, an arbitrator shall be
chosen in accordance with AAA rules. Any award rendered in such arbitration
shall be final and may be enforced by either party.
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D. Notwithstanding the foregoing, nothing in this Article shall
be construed to waive any rights or timely performance of any obligations
existing under this Agreement.
ARTICLE XIII. TERM AND TERMINATION
A. Subject to the other Paragraphs of this Article, the term of
this Agreement shall be not less than fifteen (15) years or the life of the
last expiring Patent Right, whichever period is the longer term.
B. Licensor may terminate this Agreement immediately upon the
bankruptcy, insolvency, liquidation, dissolution or cessation of operations of
Licensee; or the filing of any voluntary petition for bankruptcy, dissolution,
liquidation or winding-up of the affairs of Licensee; or any assignment by
Licensee for the benefit of creditors; or the filing of any involuntary
petition for bankruptcy, dissolution, liquidation or winding-up of the affairs
of Licensee which is not dismissed within ninety (90) days of the date on which
it is filed or commenced.
C. Licensor may terminate this Agreement upon thirty (30) days
prior written notice in the event of Licensee's failure to pay to Licensor its
portion of Running Royalties or other amounts due and payable hereunder in a
timely manner, unless Licensee shall make all such payments to Licensor within
said thirty (30) day period. Upon the expiration of the thirty (30) day period,
if Licensee shall not have made all such payments to Licensor, the rights,
privileges and licenses granted hereunder shall terminate.
D. Except as otherwise provided in Paragraph C above, either
party may terminate this Agreement upon sixty (60) days prior written notice in
the event of the other party's breach or default of any material term or
condition or warranty contained in this Agreement, unless breaching party shall
cure such breach to the nonbreaching party's reasonable satisfaction within
said sixty (60) day period. Upon the expiration of the sixty (60) day period,
if the breaching party shall not have cured said breach to the reasonable
satisfaction of the nonbreaching party, the rights, privileges and license
granted hereunder shall terminate.
E. Licensee shall have the right to terminate this Agreement and
related Sponsored Research with Licensor at any time upon six (6) months' prior
written notice to Licensor, and upon payment by Licensee of all amounts due
Licensor through the effective date of termination.
F. Upon termination of this Agreement for any reason, nothing
herein shall be construed to release either party from any obligation that
matured prior to the effective date of such termination. Licensee and any
Sublicensee thereof may, however, after the effective date of such termination,
sell all Licensed Products and complete Licensed Products in the process of
manufacture at the time of such termination and sell the same, provided that
Licensee shall pay to Licensor the Running Royalties and the portion of
Sublicensee Consideration thereon as required under this Agreement and shall
submit the reports required under this Agreement on the sales of Licensed
Products.
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ARTICLE XIV. PAYMENTS, NOTICES, AND OTHER
COMMUNICATIONS
A. All payments, notices, reports and/or other communications
made in accordance with this Agreement, shall be sufficiently made or given on
the date of the mailing if delivered by hand, by facsimile or sent by first
class mail postage prepaid and addressed as follows:
In the case of Licensor: Xxxxxx X. Xxxxx
Vice President & Chief Administrative Officer
The Xxxxxxx Institute
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxxx 00000
In the case of Licensee: Xxxx Xxxxxxx, M.D., President
GMP | Diagnostic | Prognostic Markers, Inc.
Xxx Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
or such other address as either party shall notify the other in writing.
ARTICLE XV. GENERAL PROVISIONS
A. All rights and remedies hereunder will be cumulative and not
alternative.
B. This Agreement may be amended only by written agreement
signed by the parties.
C. It is expressly agreed by the parties hereto that Licensor
and Licensee are independent contractors and nothing in this Agreement is
intended to create an employer relationship, joint venture, or partnership
between the parties. No party has the authority to bind the other.
D. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all proposals,
negotiations and other communications between the parties, whether written or
oral, with respect to the subject matter hereof.
E. If any provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not be impaired thereby.
F. Licensor agrees to promptly issue, from time to time, upon
written request, estoppel certificates in favor of the Licensee, Sublicensees
or potential Sublicensees setting forth the status of this Agreement and, if in
default, the conditions required to cure the same.
G. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original as against the party whose signature
appears thereon, but all of which taken together shall constitute but one and
the same instrument.
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H. The failure of either party to assert a right to which it is
entitled or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the other party.
I. Licensee agrees to xxxx any Licensed Products sold in the
United States with all applicable United States patent numbers. All Licensed
Products shipped to or sold in other countries shall be marked in such a manner
as to conform with the patent laws and practices of the country of manufacture
or sale.
J. Each party hereto agrees to execute, acknowledge and deliver
such further instruments and do all such further acts as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
K. The paragraph headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
L. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to choice of law rules.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date last written below.
XXXXXXX INSTITUTE GMP | DIAGNOSTIC | PROGNOSTIC
MARKERS, INC.
By: By:
----------------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxx Xxxxxxx, M.D.
Title: Chief Administrative Officer Title: President
Appendix 1 - Children's Patent Rights
Appendix 2 - Xxxxxxx Patent Rights
Appendix 3 - Development Plan
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APPENDIX 1
Patent Rights for the Children's License Agreements
6,037,138 (breast cancer associated MMP)
09/469,637 (urine assay, etc.)
5,663,071 (nucleic acids, vectors, host cell)
5,721,337 (protein)
5,831,033 (antibody)
CMCC 737 (TB 16)
5,858,681 (method of prognosis)
09/135,599 (method of diagnosis)
6,017,717
PCT/US98/21671
ID CMCC 737
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APPENDIX 2
Patent Rights for the Xxxxxxx License Agreement
------------------------------------------------------------------ -------------------------------------------
ARTICLE XVI. Patent Family U.S. Patent Nos., Application Nos. or
Application Names
------------------------------------------------------------------ -------------------------------------------
1. BAP-1 Family i. 5,539,094
------------------------------------------------------------------ -------------------------------------------
ii. 5,650,491
------------------------------------------------------------------ -------------------------------------------
iii. 5,641,866
------------------------------------------------------------------ -------------------------------------------
iv. 5,686,595
------------------------------------------------------------------ -------------------------------------------
2. BCL-G Family i. App. 09/461,641 filed 12/14/99
------------------------------------------------------------------ -------------------------------------------
3. BAG Family i. App. 09/150,489 filed 9/9/98 (Novel
Bag-1 Related Proteins)
------------------------------------------------------------------ -------------------------------------------
ii. App. 09/394,142 filed 9/9/99 (Novel
BAG proteins and nucleic acid molecules)
------------------------------------------------------------------ -------------------------------------------
iii. App. 09/350,518 filed 7/19/99
(Measuring levels of BAG expression)
------------------------------------------------------------------ -------------------------------------------
iv. PCT\US99\21053 filed 9/9/99 (Novel
Bag-1 Related Proteins)
------------------------------------------------------------------ -------------------------------------------
4. BAX Inhibitor Proteins i. 5,837,838
------------------------------------------------------------------ -------------------------------------------
5. TRAF Family i. App. 09/434,784 filed 11/5/99
------------------------------------------------------------------ -------------------------------------------
6. Novel CARD Proteins i. App 09/388,221 filed 9/1/99
------------------------------------------------------------------ -------------------------------------------
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX 3
DEVELOPMENT PLAN
GMP | Diagnostic | Prognostic Markers, Inc. agrees to fund up to an
aggregate of [***] to fund the research and development and the
commercialization of the Marker Panel Products and Marker Panel Processes, and
shall attempt to develop a Marker Panel Product or Marker Panel Process pursuant
to the following schedule:
June 1, 2000 through May 31, 2003 - Sponsored Research and Research and
Development
June 1, 2003 through May 31, 2005 - Obtain FDA approval and develop boxed
assays in commercial form
