CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.14
AGREEMENT
This Agreement is made by and between Roche Molecular Systems, Inc.
("Roche"), a Delaware corporation, and Specialty Laboratories, Inc. ("Specialty
Labs"), Santa Monica, California, hereafter collectively referred to as "The
Parties."
BACKGROUND
X. Xxxxx has the right to grant immunities from suit under certain United States
Patents describing and claiming, INTER ALIA, a gene amplification process known
as the polymerase chain reaction ("PCR") technology.
B. Specialty Labs has attained substantial expertise in validating, documenting
and performing sophisticated diagnostic procedures.
C. Specialty Labs desires to obtain an immunity from suit from Roche to practice
PCR Technology to perform human IN VITRO clinical laboratory services, and Roche
is 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 Specialty Labs agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, and solely for that purpose, the
terms set forth hereinafter shall be defined as follows:
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 Technology to detect the presence, absence or quantity of a
nucleic acid sequence associated with a specific human disease or condition.
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
diagnostics solely for the detection of genetic diseases, genetic
pre-disposition to disease, cancer, tissue transplant typing, [***],* and
microorganisms associated with infectious diseases.
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* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.6. "Licensed Services" shall mean the performance of an
Assay by Specialty Labs 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 Specialty Labs (or the fair market value for
any nonmonetary consideration which Specialty Labs 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:
(i) discounts allowed and taken in
amounts customary ____ trade (which
shall include the difference between
the dollar amount charged by
Specialty Labs 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 Specialty
Labs as a separate item in Specialty Labs' 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 Specialty Labs.
The Net Service Revenues of the Licensed Services that are performed by
Specialty Labs for any person, firm or corporation controlling, controlled by,
or under common control with Specialty Labs, or enjoying a special course of
dealing with Specialty Labs, shall be determined by reference to the Net Service
Revenues which would be applicable under this Section in an arm's length
transaction by Specialty Labs to a Third Party other than such person, firm or
corporation.
1.9. [***]* shall mean analysis of human genetic material
to ascertain [***]*.
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
2.1. Upon the terms and subject to the conditions of this
Agreement, Roche hereby grants to Specialty Labs, and Specialty Labs 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
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* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
immunity from suit under the `188 patent may be obtained by purchase 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. Specialty Labs expressly agrees that this Agreement is
intended to and does supersede all prior agreements between Specialty Labs and
the Cetus Corporation, Roche's predecessor in interest, relating to PCR
Technology, including specifically the agreement(s) dated June 3, 1988 and March
13, 1989.
2.4. Specialty Labs expressly acknowledges and agrees that the
immunity from suit pursuant to this Agreement is personal to Specialty Labs
alone and Specialty Labs 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 Specialty Labs and Specialty Labs 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.
2.5. For each Combination Service that Specialty Labs offers
pursuant to this immunity from suit, Specialty Labs 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 Specialty Labs which are not part of a
Combination Service, Specialty Labs agrees to keep Roche informed about the
availability from Specialty Labs of each such Service within a reasonable time
after Specialty Labs commences offering the Service.
2.6. Roche hereby grants to Specialty Labs the right and
Specialty Labs accepts and agrees to credit Roche as the source of PCR
Technology rights in Specialty Labs'
promotional materials and any other materials intended for distribution to Third
Parties as follows:
"This test is performed pursuant to an agreement with Roche Molecular
Systems, Inc."
3. ACKNOWLEDGMENT AND AGREEMENT ON DIAGNOSTIC PRODUCTS
3.1. Specialty Labs 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. Specialty Labs 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 Specialty Labs'
business.
4. ROYALTIES, RECORDS AND REPORTS
4.1. ROYALTIES. For the right and privileges granted under
this Agreement, Specialty Labs shall pay to Roche earned royalties equal to
[***]* of Specialty Labs' Net Service Revenues for each Assay performed.
4.2. Specialty Labs 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 Specialty Labs'
royalty statements or Specialty Labs' compliance in other respects with this
Agreement. If in dispute, such records shall be kept until the dispute is
settled. The inspection of records shall be at Roche's sole cost and expense,
unless the inspector concludes that royalties reported by Specialty Labs for the
period being audited are understated by five percent (5%) or more from the
actual royalties, in which case the costs and expenses of such inspection shall
be paid by Specialty Labs.
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* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
4.3. Specialty Labs 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 Specialty Labs 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.
This report shall be sent to the following Roche address:
Roche Molecular Systems, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Licensing Manager
The correctness and completeness of each such report shall be attested
to in writing by the responsible financial officer of Specialty Labs'
organization or by Specialty Labs' external auditor or by the chairman or other
head of Specialty Labs' internal audit committee.
Simultaneously with the delivery of each such report, Specialty Labs
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 by the due date to the following address:
Roche Molecular Systems, Inc.
X.X. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000
or to any address that Roche may advise in writing.
4.4. All amounts payable hereunder by Specialty Labs to Roche
shall be payable in United States currency.
4.5. Specialty Labs' obligation to pay royalties pursuant to
this Agreement shall terminate upon a final holding of invalidity or
unenforceability of all the patents identified in Section 1.10, SUPRA, by a
court of appellate jurisdiction or by a trials court from which no appeal is or
can be taken.
4.6. If Specialty Labs 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 allowed by
law at the time payment is due.
5. PERFORMANCE OF LICENSED SERVICES
The Parties agree that quality assurance is of utmost
importance in the performance of Licensed Services. To that end, Specialty Labs
agrees that it will:
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
6.1. With respect to any invention, improvement or discovery
(hereinafter referred to as "Discoveries" in this Article) of Specialty Labs
made after entering into this Agreement, resulting from work conducted under
this Agreement and being applicable to PCR,
if Specialty Labs decides to license that Discovery to Third Parties, then
Specialty Labs agrees to provide to Roche, unless not possible due to Specialty
Labs' previous commitment 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
Specialty Labs' 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.
7. DILIGENCE
Specialty Labs shall exercise reasonable diligence in
developing, testing, validating, documenting, promoting and selling the Licensed
Services. In the course of such diligence, Specialty Labs shall take appropriate
steps including, upon reasonable written request of Roche, furnish Roche with
representative copies of all promotional material relating to the Licensed
Services.
8. TERM AND TERMINATION.
8.1. The immunity granted to Specialty Labs 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 PCT 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 this 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, Specialty Labs fails to comply with the quality assurance provisions
of Article 5, Specialty Labs shall so
notify Roche and Roche shall notify Specialty Labs to correct the defects.
Specialty Labs shall have thirty (30) days from receipt of such notice to cure
all defects of which it is notified. If Specialty Labs 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 portion thereof
immediately. For the purposes of this Section and this Agreement, Specialty
Labs' failure to 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,
Specialty Labs may terminate this Agreement for any reason on thirty (30) days'
written notice to Roche.
8.4. The decision of a Court of Administrative body finding
Roche liable or culpable due to Specialty Labs' 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 Specialty Labs shall
automatically terminate upon (i) an adjudication of Specialty Labs as bankrupt
or insolvent, or Specialty Labs' admission in writing of its inability to pay
its obligations as they mature; (ii) or an assignment by Specialty Labs for the
benefit of creditors; (iii) or Specialty Labs' 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 Specialty Labs, if such appointment, shall
continue undischarged for a period of ninety (90) days; or Specialty Labs'
instituting (by petition, application, answer, consent or otherwise) any
bankruptcy, insolvency arrangement, or similar proceeding relating to Specialty
Labs under the laws of any jurisdiction; (v) or the institution of any such
proceeding (by petition, application or otherwise) against Specialty Labs, 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 Specialty Labs, 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 Specialty
Labs' federal or state licenses permits or accreditation necessary for operation
of Specialty Labs as a healthcare institution.
8.6. Roche shall have the right to terminate this Agreement by
written notice to Specialty Labs upon any change in the ownership or control of
Specialty Labs or of its assets. Termination under this Section shall be
effective immediately upon receipt by Specialty Labs 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 Specialty Labs 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 Specialty Labs to another
party.
8.7. BREACH. Upon the breach of or default of a material term
under this Agreement by Specialty Labs, Roche may terminate this Agreement upon
thirty (30) days' written notice to Specialty Labs. Said notice shall become
effective at the end of the thirty-day (30) period, unless during said period
Specialty Labs 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 Specialty Labs hereunder shall revert to or
be retained by Roche. To the extent Roche has licensed technology or know-how of
Specialty Labs pursuant to Article 6 hereto, those licenses shall remain in full
force according to their terms.
8.9. Specialty Labs' obligations to report to Roche and to pay
royalties to Roche as to the Licensed Services performed under this Agreement
prior to termination or expiration of the Agreement shall survive such
termination or expiration.
9. CONFIDENTIALITY - PUBLICITY
9.1. Except as otherwise specifically provided in Section 2.5,
Specialty Labs 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
Specialty Labs 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.
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 the
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.
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 this Agreement or its terms 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
In exercising any and all rights and in performing its
obligations hereunder, Specialty Labs 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. Specialty Labs further agrees to refrain from any activities that
would have an adverse effect on the business reputation of Roche. Roche will
advise Specialty Labs of any such activities and Specialty Labs will have thirty
(30) days to correct such activity.
11. ASSIGNMENT
This Agreement shall not be assigned by Specialty Labs
(including without limitation any purported assignment or transfer that would
arise from a sale or transfer of Specialty Labs' business). Roche may assign all
or any part of its rights and obligations under this Agreement at any time
without the consent of Specialty Labs. Specialty Labs agrees to
execute such further acknowledgments or other instruments as Roche may
reasonably request in connection with such assignment.
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
g) creating any agency, partnership, joint
venture or similar relationship between
Roche and Specialty Labs.
12.2. ROCHE MAKES NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12.3. Specialty Labs acknowledges that the technology licensed
hereby is experimental in nature and agrees to take all reasonable precautions
to prevent death, personal injury, illness and property damage from the use of
such technology. Specialty Labs 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 Specialty Labs of
the Licensed Technology, except that Specialty Labs shall not be liable to Roche
for injury or damage arising solely because of Roche's negligence. As used in
this Section, "Specialty Labs" includes its officers, directors, agents and
employees.
12.4. Roche warrants and represents that it has the right and
power to grant this immunity from suit to Specialty Labs and that the granting
of such immunity does not require the consent or approval of a Third Party.
Roche does hereby place Specialty Labs 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 Specialty Labs in the event that Kodak is found to have
certain rights in PCR Technology that may impact this Agreement or the rights
granted hereunder.
13. GENERAL
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
If to Specialty Labs:
Specialty Laboratories, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
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 may 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 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 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.
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
the day and year first above written.
ROCHE MOLECULAR SYSTEMS, INC. SPECIALTY LABORATORIES, INC.
By: /s/ XXXXX XXXXXXX By: /s/
-------------------------- --------------------------
Xxxxx Xxxxxxx
Title: President Title: President
Date: MAY 28, 1992 Date: JUNE 6, 1992
-------------------------- --------------------------
ATTACHMENT I
Licensed Services Percent of Net Service
----------------- Revenues for Combined
Services which is
Attributable to Licensed
Services
------------------------
Tests in Planning
-----------------
1. [***]*
--------------------------
* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT I
COMBINATION SERVICES
PERCENT OF NET SERVICE
REVENUES FOR COMBINATION
SERVICES WHICH IS
ATTRIBUTABLE TO LICENSED
LICENSED SERVICES SERVICES
----------------- -------------------------------------
[***]* [***]*
[***]* [***]*
--------------------------
* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDMENT TO
PCR DIAGNOSTIC SERVICE AGREEMENT
This is an amendment (hereinafter "Amendment") to the PCR Diagnostic
Services Agreement dated June 6, 1992 ("the Agreement"), between Roche Molecular
Systems, Inc. ("RMS") , having an office at 0000 X.X. Xxxxxxx 000, Xxxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000-0000, and Specialty Laboratories, Inc.
("Specialty Labs"), Santa Monica, California, hereinafter collectively referred
to as "The Parties".
BACKGROUND
On June 6, 1992, The Parties entered into an Agreement whereby RMS
granted Specialty Labs 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 certain
terms of the Agreement upon the terms and conditions set forth herein.
NOW THEREFORE, for and in consideration of the premises and of mutual
covenants and agreements contained herein, RMS and Specialty Labs agree as
follows:
1. The Agreement is hereby amended as follows:
A. Article 4.1 is deleted in its entirety and replaces with the
following:
"4.1 ROYALTIES.
a) For the rights and privileges granted under this
Agreement, Specialty Labs shall pay to RMS
earned royalties equal to:
i) [***]* of Specialty Labs's Net Service
Revenues for each Licensed Service performed
when no annual minimum payment is made;
ii) [***]* of Specialty Labs's Net Service
Revenues for each Licensed Service performed
when a Level I annual minimum is made;
iii) [***]* of Specialty Labs's Net Service
Revenues for each Licensed Service performed
when a Level II annual minimum payment is
made; and
iv) [***]* of Specialty Labs's Net Service
Revenues for each Licensed Service performed
when a Level III annual minimum payment is
made.
Payment levels for 1997 are listed on the attached
Appendix A. RMS will inform Specialty Labs, no later than
December 1st of the current year, of the
--------------------------
* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
minimum payments required at each level for the next calendar
year. Under no circumstances will the royalty be less than
[***]*.
b) Such up-front payment of annual minimum royalties
is fully creditable against royalties earned in
the calendar year for which the payment has been
made. The annual minimum payment shall be made
within thirty (30) days of the first January for
each year that Specialty Labs wishes to make such
payment."
2. Except as specifically amended hereby, all the terms and provisions of
the Agreement remain unchanged and in full force and effect.
3. The Effective Date of this Agreement shall be January 1, 1997.
IN WITNESS WHEREOF, The Parties hereto have set their hands and seals
and duly executed this Amendment on the date(s) indicated below.
ROCHE MOLECULAR SYSTEMS, INC. SPECIALTY LABORATORIES, INC.
By: /s/ XXX XXXXX By: /s/ XXXX X. XXXXXXX
--------------------------- ---------------------------
Name: Xxx Xxxxx Name: Xxxx X. Xxxxxxx
Title: Vice President, R&D Title: V.P. Finance
Date: AUGUST 14, 1997 Date: AUGUST 25, 1997
--------------------------- ---------------------------
--------------------------
* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
APPENDIX A
Annual Minimum Payments for 1997
Level I [***]*
Level II [***]*
Level III [***]*
--------------------------
* PORTIONS OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Roche Molecular Systems
August 17, 1993
Xxxxx X. Xxxxx, M.D., Ph.D
President
Specialty Laboratories, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000-0000
Re: License Agreement dated June 6, 1992 by and between Roche Molecular
Systems, Inc. and Specialty Laboratories, Inc.
Dear Dr. Xxxxx:
Over 100 laboratories in 31 states are now participating in Roche Molecular
Systems' PCR licensing program performing tests for a wide range of genetic
traits and infectious agents. In our continued effort to meet the needs of the
medical diagnostics community, RMS is pleased at this time to offer Specialty
Laboratories, Inc. and our other licensees several additions to the PCR
diagnostic service license agreement.
We are extending the term of your license, adding a "bad debt" provision, and
expanding the list of patent rights under which you are licensed, with no
increase royalty rates. The enclosed Amendment and Rider, when fully executed,
will modify the Roche/Specialty Labs agreement to include the changes, which we
believe will be beneficial to you and your organization. The changes are:
- The arbitration between Xxxxxxx Kodak and Roche has been concluded, and
there is no longer any need for the language of Section 12.4, which has
been deleted in its entirety from new agreements.
- The term of the Agreement, currently set at five (5) years from the date
of execution is hereby extended to the life of the basic PCR patents
(which expire on July 28, 2004).
- Three new patents have issued to Roche which cover specific uses of the
PCR process. These are U.S. Patents #5,176,995, covering the use of PCR
in virus detection, #5,008,182, covering the detection of HIV, and
#5,219,727, on a method of quantitative PCR. We are extending to you, in
the enclosed Rider, rights under these patents for the term of the
Agreement.
- We have added to the definition of Net Service Revenues, an allowance for
uncollectible xxxxxxxx up to a maximum of 2% of gross xxxxxxxx.
Specialty Laboratories, Inc.
August 17, 1993
Page 2
If you elect to have the foregoing modifications apply to the agreement with
Specialty Labs, please sign the Amendment and Rider and return one fully
executed original of each document to me within forty-five (45) days of the date
of this letter. If we do not receive the executed documents within forty-five
days, your PCR Agreement will remain unchanged.
Please contact the RMS Licensing office if you have any questions. You may call
me at the number shown above, Xxxxx Xxxxx at (000) 000-0000, or Xxxxxxx Xxxxx at
(000) 000-0000.
With best wishes for your success.
Sincerely,
Xxxxx Xxxxxxx, Ph.D.
Director of Licensing
Roche Molecular Systems, Inc.
Enclosure(s)
