OPTION AGREEMENT
BETWEEN
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
AND
IMAGENETICS INCORPORATED
FOR
INVENTIONS MADE IN THE FIELD
OF MOLECULAR CYTOGENETICS
TABLE OF CONTENTS
ARTICLE NO. TITLE PAGE
----------- ----- ----
RECITALS..................................................................... 1
1. DEFINITIONS.............................................................. 4
2. OPTION FOR EXCLUSIVE LICENSE............................................. 8
3. OPTION FEE............................................................... 10
4. EXERCISE OF THE OPTION................................................... 10
5. TERMS TO BE NEGOTIATED................................................... 12
6. PROGRESS REPORTS......................................................... 15
7. PATENT PROSECUTION AND MAINTENANCE....................................... 16
8. LIFE OF THE AGREEMENT.................................................... 19
9. TERMINATION BY THE REGENTS............................................... 19
10. TERMINATION BY OPTIONEE................................................. 20
11. DISPOSITION OF PATENT PRODUCT(S)
ON HAND UPON TERMINATION................................................ 20
12. USE OF NAMES AND TRADEMARKS............................................. 21
13. REPRESENTATIONS AND WARRANTS............................................ 21
14. INDEMNIFICATION......................................................... 23
15. NOTICES................................................................. 23
16. ASSIGNABILITY........................................................... 24
17. LATE PAYMENTS........................................................... 24
18. WAIVER.................................................................. 25
19. GOVERNING LAWS.......................................................... 25
20. CONFIDENTIALITY......................................................... 25
21. SUPPLY OF THE BIOLOGICAL MATERIALS...................................... 27
22. MAINTENANCE OF THE BIOLOGICAL MATERIALS................................. 28
23. MISCELLANEOUS........................................................... 29
SCHEDULE A - PAGE 1A.................................................... 31
SCHEDULE A - PAGE 2A.....................................................32
SCHEDULE A - PAGE 3A.................................................... 33
SCHEDULE B - PAGE 1B.................................................... 34
SCHEDULE C - PAGE 1C.................................................... 35
Draft date: 2/25/94
Revised: 4/15/94
OPTION AGREEMENT
FOR
INVENTIONS MADE IN THE FIELD OF MOLECULAR CYTOGENETICS
THIS OPTION AGREEMENT (the "Agreement") is made and is effective this 1st
day of July, 1994, by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a
California corporation having its statewide administrative offices at 000
Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, hereinafter
referred to as "The Regents", and IMAGENETICS INCORPORATED, an Illinois
corporation, having a principal place of business at 000 Xxxx Xxxxxxxxxxx Xxxx,
X.X. Xxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000-0000, hereinafter referred to as the
"Optionee".
RECITALS
WHEREAS, certain inventions, generally characterized as specific nucleic
acids, gene products, and gene expression pathways, herein collectively referred
to as "the Invention(s)", were made in the course of research at the University
of California, San Francisco (UCSF) in the Division of Molecular Cytometry under
the direction of Xxx X. Xxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxxx, Xxxxxxxx
Xxxxxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, and Xxxxxx Xxxxxx ("Principal
Investigators") and are covered by Regents' Patent Rights as defined below;
WHEREAS, The Regents owns an undivided interest in U.S. Patent No.
4,468,464 entitled "Process and Composition for Biologically Functional
Molecular
Chimeras" by X. Xxxxx, et al. and issued August 28, 1984, U.S. Patent No.
4,740,470 entitled "Biologically Functional Molecular Chimeras" by X. Xxxxx, et
al. and issued April 26, 1988, and U.S. Patent No. 4,237,224 entitled "Process
and Composition for Biologically Functional Molecular Chimeras" by X. Xxxxx, et
al. and issued December 2, 1980, which patents may prevent the practice of
Invention(s) claimed in Regents' Patent Rights contained in Paragraph 1.5 of
this Agreement;
WHEREAS, if it is necessary for Optionee to be licensed under the
aforementioned U.S. Patent No. 4,468,464, U.S. Patent 4,740,470, or U.S. Patent
No. 4,237,224 to practice the Invention(s) claimed in Regents' Patent Rights,
then Optionee shall obtain the necessary licenses from Stanford University; in
no case do the rights and options granted to Optionee under the terms of this
Agreement cover U.S. Patent No. 4,468,464, U.S. Patent No. 4,740,470, or U.S.
Patent No. 4,237,224;
WHEREAS, funding for any Invention made in the conduct of Research
performed under this Agreement is provided in part by the U.S. Department of
Health and Human Services (DHHS);
WHEREAS, under 35 USC Section 200-212, The Regents may elect to retain
title to any invention (including Inventions) made by it under U.S. Government
funding;
WHEREAS, if The Regents elects to retain title to the Invention, then the
law requires that The Regents grant to the U.S. Government a nontransferable,
paid-up, monexclusive, irrevocable license to use the Invention by or on behalf
of the U.S. Government throughout the world;
WHEREAS, The Regents and Optionee entered into a Research Agreement
2
entitled "Research Agreement for the Development of Molecular Cytogenetics"
dated July 1, 1994 to provide funding by Optionee to the Principal Investigators
at UCSF to perform research in the detection and treatment of disease related to
chromosome abnormalities ("Research Agreement");
WHEREAS, under the terms of the Research Agreement, Optionee may elect to
include patent applications and resulting patents covering Invention(s) arising
in the conduct of work performed under the Research Agreement in this Agreement;
WHEREAS, The Regents and Optionee entered into a License Agreement entitled
"Exclusive License Agreement to Inventions Made in the Field of Molecular
Cytogenetics", effective July 1, 1994, ("License Agreement") and Optionee may
elect to include patent applications and resulting patents covered under the
terms of this Agreement in the License Agreement;
WHEREAS, if Optionee elects to include patent applications and resulting
patents covering Invention(s) arising in the conduct of work performed under the
Research Agreement under the terms of this Agreement, then prior to exercise of
the option and inclusion of such patent applications and resulting patents into
the License Agreement, Optionee shall provide The Regents with a Plan of
Commercialization required under the terms of this Agreement covering commercial
development of the Invention(s) claimed in such patent applications and
resulting patents, and thereafter, Optionee and The Regents shall negotiate the
following terms to be included in the License Agreement based on the information
contained in the Plan of Commercialization: a) license issue fee (Paragraph
4.1); b) royalty rate (Paragraph 5.1); c) minimum annual royalties (Paragraph
5.4); and d) diligence provisions in the
3
form of specific performance milestones (Paragraph 6.4);
WHEREAS, Optionee is desirous of acquiring exclusive licenses to any and
all of Regents' Patent Rights covering the Invention(s) arising in the conduct
of work performed under the Research Agreement in Optionee's Field, subject to
rights granted by to the U.S. government as hereinafter described;
WHEREAS, the Invention(s) has utility for the detection and treatment of
chromosome abnormalities relating to specific diseases, and the Optionee has an
interest in obtaining rights to pursue the evaluation of commercial development
of the Invention(s) in Optionee's Field; and
WHEREAS, The Regents desires to grant such rights to Optionee in order that
the Invention(s) be developed and utilized to the fullest extent so that the
benefits can be enjoyed by the general public.
The parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meaning set
forth below:
1.1 "Research" means investigations leading to the development of
information, reagents and/or techniques useful for and/or resulting in
identification and/or characterization of the following:
1) genetic abnormalities
2) genes
3) gene transcripts
4) gene products
relevant to human genetic disease and for their detection or characterization.
4
1.2 "Research Agreement" means the agreement entitled "Research Agreement
for the Development of Molecular Cytogenetics" between The Regents and Licensee
dated July 1, 1994, for the conduct of Research and any extensions or renewals
thereof, and incorporated herein by reference. In the event of any
inconsistencies between the Research Agreement and this Agreement, the terms of
this Agreement shall control.
1.3 "Research Information" means technical data, processes, methods,
inventions, compositions-of-matter, and biological materials, equipment,
instruments, apparatuses, devices, articles of manufacture or component parts(s)
thereof developed under or resulting from the performance of Research under the
Research Agreement and improvements thereof, except for improvements on new
subject matter not funded by Licensee. In the event that computer software or
information management systems are created or developed in the performance of
Research under the Research Agreement such computer software or information
management systems shall be treated as Research Information. There shall be no
transfer of the physical possession of equipment, instruments, apparatuses,
devices, articles of manufacture or component part(s) thereof (except biological
materials) comprising Research Information.
1.4 "Regents' Patent Rights" means all U.S. patents and patent
applications and foreign patents and patent applications assigned to The Regents
and requested under Paragraph 1.3 infra, including any reissues, extensions,
substitutions, continuations, divisions and continuations-in-part (only to the
extent, however, that claims in the continuations-in-part are entitled to the
priority filing date of the parent
5
patent application) based on and including any subject matter claimed in or
covered by any of the following:
(1.4a) Any future patent rights to subject matter claimed in or
covered by a patent application(s) covering any Inventions
elected by Licensee under the provisions of Article VIII of
the Research Agreement.
1.5 "Patent Products" means (a) any kit, composition of matter, material,
or product; (b) any kit, composition of matter, material, or product to be used
in a manner requiring the performance of the Patent Method, or any kit,
composition of matter, material, or product produced by the Patent Method, or
(c) the practice of the Patent Method itself to the extent the manufacture, use,
or sale of (a), (b), or (c) immediately above falls within the scope of one or
more claims of Regents' Patent Rights during the term of the patent grant, in
countries in which such claim or claims have issued and have not expired, been
abandoned, disclaimed, or found invalid or unenforceable.
1.6 "Unprotected Products" means (a) any kit, composition of matter,
material, or product; (b) any kit, composition of matter, material, or product
to be used in a manner requiring the performance of the Unprotected Method, or
any kit, composition of matter, material, or product produced by the Unprotected
Method, or (c) the practice of the Unprotected Method itself to the extent the
manufacture, use, or sale of (a), (b), or (c) immediately above falls within the
scope of one or more pending claims within Regents' Patent Rights during the
period and in such countries in which such claim or claims have not issued, and
have not expired, been abandoned, disclaimed, or found invalid or unenforceable,
such period not to exceed five years
6
from the date in which the subject matter is first introduced in a patent
application in each country that such patent application is filed.
1.7 "Patent Method" means any process or method the use or practice of
which would constitute in a particular country, but for the license granted to
the Licensee pursuant to this Agreement, an infringement of an unexpired claim
of a patent within Regents' Patent Rights in that country in which the Patent
Method is used or practiced.
1.8 "Unprotected Method" means any process or method the use or practice
of which would constitute in a particular country, but for the license granted
to the Licensee pursuant to this Agreement an infringement of any unabandoned,
pending claim of a patent application within Regents' Patent Rights if such
patent application in that country in which the Unprotected Method is used or
practiced had issued.
1.9 "Product(s)" means Patent Products and Unprotected Products.
1.10 "Method" means Patent Method and Unprotected Method.
1.11 "Field" means research Product, diagnostic Product, and therapeutic
Product based on (a) detection of normal or altered specific nucleic acid
sequences, gene products, specific nucleic acid sequences, or gene expression
pathways, or (b) therapies targeted to specific nucleic acid sequences, gene
products, or gene expression pathways, provided that the Products in (a) or (b)
above do not employ or are not employed in the technique of IN SITU
hybridization.
1.12 "Affiliate(s)" of a party means any entity which, directly or
indirectly, controls such party, is controlled by such party or is under common
control with such party ("control" for these purposes being defined as the
actual, present capacity to
7
elect a majority of the directors of such affiliate, or if not, the capacity to
elect the members that control fifty percent (50%) of the outstanding stock or
other voting rights entitled to elect directors) provided, however, that in any
country where the local law shall not permit foreign equity participation of a
majority, then an "Affiliate" shall include any company in which the Licensee
shall own or control, directly or indirectly, the maximum percentage of such
outstanding stock or voting rights permitted by local law. Each reference to
Licensee herein shall be meant to include its Affiliates.
1.13 "Joint Venture" means any separate entity established pursuant to an
agreement between a third party and Licensee to constitute a vehicle for a joint
venture, which separate entity manufacture, uses, purchases, sells, or acquires
a Product from Licensee. Each reference to Licensee herein shall be meant to
include its Joint Ventures.
1.14 "License Agreement(s)" means any agreement(s) entered into by The
Regents and Optionee entitled "Exclusive License Agreement to Inventions Made in
the Field of Molecular Cytogenetics", effective July 1, 1994, which grants
Optionee the exclusive right to make, use, distribute, or sell Products covered
by the Regents' Patent Rights.
2. OPTION FOR EXCLUSIVE LICENSE
2.1 Subject to the limitations set forth in this Agreement and subject to
the licenses granted to the U.S. Government set forth in Paragraph 13.2 infra,
The Regents hereby grants to Optionee under the Regents' Patent Rights, a
royalty-free
8
right to practice the Method and a royalty-free right to make and use the
Product(s) for the development, test, and evaluation of such Product(s) to
evaluate Optionee's interest in exercising the option specified in Paragraph 2.2
infra.
2.2 Subject to the limitations set forth in this Agreement and subject to
the licenses granted to the U.S. Government set forth in Paragraph 13.2 infra,
The Regents hereby grants to Optionee a time-limited option to separately
negotiate in good faith the outstanding terms of the License Agreement specified
in Article 5 (TERMS TO BE NEGOTIATED) for an exclusive license to patent
applications and patents contained in Regents' Patent Rights claiming each
separate Product if Optionee exercises its option pursuant to Article 4
(EXERCISE OF THE OPTION).
2.3 The terms of the option set forth in Paragraph 2.2 supra for each
patent applications and patents contained in Regents' Patent Rights claiming a
Product shall be for eighteen (18) months commencing on the date Optionee
elected to include such patent applications and patents in this Agreement.
Optionee shall be entitled to renew the eighteen (18) month term of the option
set forth in this Paragraph 2.2 for such patent application for a period of one
(1) additional year, provided that Optionee pays an option renewal fee for that
Product as specified in Paragraph 3.1 infra.
2.4 This Agreement does not constitute a license to make, have made, use,
or sell Product(s) or to practice the Method except for the sole purpose of
conducting research and evaluating Optionee's interest in exercising its option.
In no case, however, shall Optionee sell Products under the terms of this
Agreement.
2.5 The licenses granted in Paragraph 3.1 hereunder shall be subject to
the rights of the U.S. Government in the Research including those set forth in
35 U.S.C.
9
200-212 and applicable governmental implementing regulations.
2.6 Nothing in this Agreement shall be deemed to limit The Regents' right
to publish and use technical data from any research performed by The Regents,
Research Information, and Regents' Patent Rights relating to the Invention(s)
and to make and use Products, Methods, and associated technology for educational
and research purposes.
3. OPTION FEE
3.1 As consideration for all the rights granted to Optionee herein,
Optionee shall pay to The Regents an option fee of Twenty-Five Thousand Dollars
($25,000.00) for each U.S. patent application(s) and U.S. patent(s) claiming a
Product elected by Optionee to be included in Regents' Patent Rights. If
Optionee elects to renew the term of the option covering the Product in
accordance with the terms of Paragraph 2.3 supra, then Optionee shall pay to The
Regents an option renewal fee of Twenty-Five Thousand Dollars ($25,000.00) for
the renewal option period for the U.S. patent application(s) and U.S. patent(s)
claiming such Product.
3.2 These fees are nonrefundable, noncreditable, and not an advance
against reimbursement for any patent costs or fees due The Regents in this
Agreement or reimbursement for any patent costs, fees, or royalties due The
Regents specified in the License Agreement.
4. EXERCISE OF THE OPTION
4.1 If Optionee elects to exercise its rights to enter negotiations to
include
10
the patent applications and patents claiming a Product in the License Agreement,
then Optionee shall notify The Regents in writing pursuant to Article 15
(NOTICES) prior to the expiration of this Agreement. Failure of Optionee to so
notify The Regents of its election hereunder shall be deemed to be an election
by Optionee not to secure a license.
4.2 Within thirty (30) days after Optionee's notification to The Regents
pursuant to Paragraph 4.1 immediately above, Optionee shall specify in writing
those particular patent applications, patents, and territories for which it
desires a license covering the Product from The Regents and those in which it
has no interest. Such notification shall include a copy of a Plan of
Commercialization covering the specific Product(s) to be made, used, or sold by
Optionee. "Plan of Commercialization" means a reasonably detailed plan
containing information regarding, but not limited to, a development plan
outlining specific performance milestones and timetable for a Product's
commercial development and its introduction to the market place, projected sales
for the Product, the date of the anticipated first commercial sale of a Product,
projected costs and profits for such Product, and other terms commonly included
in business plans. Failure of Optionee to provide a Plan of Commercialization
to The Regents in accordance with this Paragraph 4.2 shall be deemed to be an
election by Optionee not to secure a license.
4.3 With respect to Optionee's election not to secure a license under
Paragraph 4.1 or 4.2 to any patent application claiming both an ISH Invention
and a Non-ISH Invention, Optionee's election will not be deemed to be an
abandonment or termination of rights to an ISH Invention under the 1st License
Agreement.
11
4.4 Within two (2) months after Optionee's notification to The Regents of
its election to exercise its option, Optionee and The Regents shall enter into
good-faith negotiations for the purpose of negotiating the outstanding terms and
conditions of the License Agreement specified in Article 5 (TERMS TO BE
NEGOTIATED).
5. TERMS TO BE NEGOTIATED
5.1 If Optionee exercises its rights to patent applications and patents
claiming a specific Product under Article 4 (EXERCISE OF THE OPTION), then
Optionee and The Regents shall thereafter negotiate in good-faith to determine
the following provisions covering each such Product to be included in the terms
of the License Agreement:
(5.1a) the cash amount of the license issue fee for each Product
licensed hereunder to be paid to The Regents; the cash
amount of the license issue fee shall reflect the Product's
value and shall be based on information contained in the
Plan of Commercialization for that Product;
(5.1b) the royalty rate based on each Product to be included in the
License Agreement. The basis for the negotiated royalty
rate shall be the profitability of each Product calculated
in accordance with the information contained in the Plan of
Commercialization provided to The Regents by Optionee for
each such Product;
(5.1c) the amount of minimum annual royalty payments to be paid to
The Regents for each Product; these minimum annual
royalties shall be paid to The Regents and shall be based on
a percentage of the anticipated income due The Regents from
royalty income based on the anticipated net sales of a
Product; a U.S. dollar amount comprising the minimum annual
royalties shall be paid to The Regents on dates established
by the parties during the good-faith negotiation in which
market introduction is expected for a Product based on
information provided in the Plan of Commercialization; the
minimum annual royalties shall be
12
paid to The Regents in the negotiated amounts and at the
negotiated times whether or not a Product is available for
sale in any country;
(5.1d) diligence provisions in the form of specific performance
milestones representing technical and regulatory
achievements needed to be attained in order to commercialize
each Product elected hereunder and the corresponding date
each such milestone will be met by Optionee; the
negotiation establishing specific performance milestone and
the corresponding date it will be met will be based on
information provided in the Plan of Commercialization for
each Product;
5.2 Upon successful conclusion of the negotiation pursuant to
Subparagraphs 5.1a through 5.1d supra, the terms agreed upon by the parties
hereto covering each Product or Method claimed in a patent application(s) and
patent(s) issuing thereon and elected by Optionee to be included in the License
Agreement shall be set forth in Appendix A thereof, which shall be attached
thereto and incorporated therein.
5.3 If Optionee and The Regents are unsuccessful in establishing terms and
conditions covering each Product or Method in accordance with the provisions of
Subparagraphs 5.1a through 5.1d supra, then either party may refer any
controversy or claim arising out of or relating to this Article 5 (TERMS TO BE
NEGOTIATED) binding arbitration under the provisions of this Paragraph 5.3 by so
notifying the other party in writing in accordance with the provisions of
Article 15 (NOTICES) stating the nature of the dispute to be resolved.
5.4 Within fifteen (15) business days following such notice three
arbitrators shall be selected by the following process:
(5.4a) Each party shall designate one individual, not an employee,
director, paid consultant, or shareholder of the party to
serve as an arbitrator; and
13
(5.4b) These two arbitrators shall select a third individual, who
shall be an attorney experienced in arbitration proceedings,
to serve as the third arbitrator and to preside in
resolution of the dispute. The third arbitrator shall not
be an employee, director or shareholder of either party.
5.5 Promptly after selection of the three arbitrators, the arbitrators
shall meet with the parties at which time the parties shall each present in
writing the issue to be resolved and a proposed ruling on it. Such writing
shall be served on the other party in advance and be limited to no more than
twenty (20) pages.
5.6 The following general provisions shall apply to the arbitration
proceeding:
(5.6a) No later than thirty (30) days after the appointment of the
third arbitrator, the arbitrators shall set a date for a
hearing to resolve the issue identified by the parties. The
hearing shall take place no later than one hundred twenty
(120) days from the original notice requesting arbitration;
(5.6b) The arbitrators shall permit the taking of not more than one
(1) deposition by each party, and shall permit, subject to
the provisions of a mutually agreeable protective order, the
production of only those documents immediately and directly
bearing on the issue or issues subject to arbitration and
only to the extent necessary for the convenience and use of
the arbitrators, and shall not require or permit any other
discovery by any means, including, but not limited to,
depositions interrogatories or production of documents;
(5.6c) No later than ten (10) business days prior to the hearing,
each party may submit a single written brief or memorandum
in support of its position which may be no more than twenty
(20) pages. Each party shall be entitled to no more than
three (3) hours of hearing to present testimony or
documentary evidence. Such time limitation shall include
any direct, cross or rebuttal testimony, but such time
limitation shall only be charged against the party
conducting such direct, cross or rebuttal testimony. It
shall be the responsibility of the arbitrators to determine
whether each party has had the three (3) hours to which it
is entitled or may, upon good cause shown, have additional
time to present its case;
14
(5.6d) Each party shall have the right to be represented by
counsel. The arbitrators shall have sole discretion with
regard to the admissibility of evidence. Admissibility will
be decided by two-thirds vote; and
(5.6e) Within fifteen (15) days of the conclusion of the hearing,
each party must submit a proposal finding to the
arbitrators.
5.7 The arbitrators shall rule on the disputed issue within thirty (30)
days following the completion of the testimony of both parties. Such ruling
shall adopt in their entirety the proposed findings of one of the parties on the
disputed issue, or the arbitrators shall propose alternative findings. The
issue shall be resolved upon two-thirds vote of the arbitrators.
5.8 Arbitration shall take place in the location of choice of the party
who has not requested arbitration, but such location shall be in the state of
California.
5.9 The arbitrators shall be paid reasonable fees plus expenses, which
shall be shared equally between The Regents and Optionee.
5.10 The decision of the arbitrators shall be enforceable, but not
appealable, in any court of competent jurisdiction.
6. PROGRESS REPORTS
6.1 Beginning six (6) months from the election by Optionee to include
patent applications under Paragraph 1.1 supra (Regents' Patent Rights), Optionee
shall submit to The Regents a progress report covering the Optionee's activities
related to the development and testing of each Product covered by this
Agreement. Such progress report shall thereafter be submitted semi-annually.
6.2 The progress reports submitted under Paragraph 6.1 immediately above
15
shall include, but not be limited to, the following topics so that The Regents
may be able to determine the progress of the development of each Product:
- summary of work completed
- key scientific discoveries
- summary of work in progress
7. PATENT PROSECUTION AND MAINTENANCE
7.1 The Regents shall diligently prosecute and maintain the United States
and foreign patent applications and patents comprising Regents' Patent Rights
using counsel of its choice. The Regents shall promptly provide Optionee with
copies of all relevant documentation so that Optionee may be currently and
promptly informed and apprised of the continuing prosecution, and may comment
upon such documentation sufficiently in advance of any initial deadline for
filing a response, provided, however, that if Optionee has not commented upon
such documentation prior to the initial deadline for filing a response with the
relevant government patent office or The Regents must act to preserve Regent's
Patent Rights, The Regents shall be free to respond appropriately without
consideration of Optionee's comments, if any. Both parties hereto agree to keep
this documentation in confidence in accordance with the provisions of Article 20
(CONFIDENTIALITY) herein. The Regents' counsel will take instructions only from
The Regents. The Regents shall retain counsel of its choice that is reasonably
acceptable to Licensee, provided, however, that if Licensee rejects The Regents'
choice of counsel three (3) times consecutively (i.e., three different new
attorneys), then The Regents shall be free, in its sole discretion, to choose an
attorney
16
of its choice.
7.2 The Regents shall use all reasonable efforts to amend any patent
application to include claims requested by the Optionee and required to protect
each Product contemplated to be sold or Method to be practiced under the License
Agreement.
7.3 The Regents shall, at the request of Optionee, file, prosecute, and
maintain patent applications and patents covered by Regents' Patent Rights in
foreign countries if available. The Optionee must notify The Regents within
seven (7) months of the filing of the corresponding United States application of
its decision to request The Regents to file foreign counterpart patent
applications. This notice concerning foreign filing shall be in writing and
must identify the countries desired. The absence of such a notice from the
Optionee to The Regents within the seven (7) month period shall be considered an
election by Optionee not to request The Regents to secure foreign patent rights
on behalf of the Optionee. The Regents shall have the right to file patent
applications at its own expense in any country Optionee has not included in its
list of desired countries, and such applications and resultant patents, if any,
shall not be included in the licenses granted under this Agreement. However,
The Regents shall notify Optionee of such foreign countries in which The Regents
filed patent applications and in which Optionee elected not to secure foreign
rights. Subject to the availability of relevant rights, Optionee shall have the
right and option to include in the License Agreement (if not already licensed
exclusively to a third party) those patent applications and patents issuing
thereon filed in countries not originally included in Optionee's desired list at
any time up to five (5) years from the filing date
17
of such patent applications, provided, however, that Optionee shall notify The
Regents in writing of its decision and shall share equally with other licensees
in all filing, prosecution, and maintenance fees for such additional patents and
patent applications.
7.4 1/n of past, present and future costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications
and all costs and fees relating to the maintenance of patents covered by
Regents' Patent Rights in Paragraph 1.5 shall be borne by Optionee. The costs
of all interferences and oppositions shall be considered prosecution expenses
and also shall be borne by Optionee. Optionee shall reimburse The Regents for
all costs and charges within thirty (30) days following receipt of a proper
itemized invoice from The Regents to which relevant law firm xxxxxxxx shall be
attached. For purposes of this Paragraph, "n" means the number of Regents'
licensees to Regents' Patent Rights. But, the United States Government shall
not be considered a licensee of The Regents.
7.5 The Optionee's obligation to underwrite and to pay patent filing costs
and related costs, prosecution and maintenance costs shall continue for so long
as this Agreement covers the relevant patent application and patent issuing
thereon, provided, however, that the Optionee may terminate its obligations with
respect to any patent application or patent in any or all designated countries
upon three (3) months written notice to The Regents. The Regents will use its
best efforts to curtail the associated patent costs after such a notice is
received from the Optionee. The Regents may continue prosecution and/or
maintenance of such application(s) or patent(s) at its sole discretion and
expense, provided, however, that the Optionee shall have no further right or
licenses thereunder.
18
8. LIFE OF THE AGREEMENT
8.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement shall be
in force from the effective date recited on page one and shall remain in effect
for the term of any outstanding option under Paragraph 2.3.
8.2 Any termination of this Agreement shall not affect the rights and
obligations set forth in the following Articles:
Article 12 Disposition of Product on Hand Upon Termination
Article 13 Use of Names and Trademarks
Article 14 Indemnification
Article 17 Late Payments
Article 20 Confidentiality
8.3 Any termination of this Agreement shall not relieve Optionee of its
obligation to pay any monies due or owing at the time of such termination and
shall not impair any accrued right of The Regents or Optionee.
9. TERMINATION BY THE REGENTS
9.1 If Optionee should violate or fail to perform any term or covenant of
this Agreement, then The Regents may give written notice of such default
("Notice of Default") to Optionee. If Optionee should fail to repair such
default within sixty (60) days of the effective date of such notice, then The
Regents shall have the right to terminate this Agreement and the rights herein
by a second written notice ("Notice of Termination") to Optionee. If a Notice
of Termination is sent to Optionee, then this
19
Agreement shall automatically terminate on the effective date of such notice.
Such termination shall not relieve Optionee of its obligation to pay any fees
owing at the time of such termination and shall not impair any accrued right of
The Regents. These notices shall be subject to Article 15 (NOTICES).
10. TERMINATION BY OPTIONEE
10.1 Optionee shall have the right at any time to terminate this Agreement
in whole or as to any portion of Regents' Patent Rights by giving notice in
writing to The Regents. Such notice of termination shall be subject to Article
15 (NOTICES) and termination of this Agreement shall be effective sixty (60)
days from the effective date of such notice.
10.2 Any termination pursuant to Paragraph 10.1 immediately above shall not
relieve Optionee of any obligation or liability accrued hereunder prior to such
termination or rescind anything done by Optionee or any payments made to The
Regents hereunder prior to the time such termination becomes effective, and such
termination shall not affect in any manner any rights of The Regents arising
under this Agreement prior to such termination.
11. DISPOSITION OF PATENT PRODUCT(S) ON HAND UPON TERMINATION
11.1 Upon termination of this Agreement or election by Optionee not to
include patent applications and patents issuing thereon claiming a Product in
the License Agreement, Optionee shall destroy or return to the Principal
Investigators the relevant Product(s) in its possession within fifteen (15) days
following the effective
20
date of its election of termination of this Agreement. Optionee shall provide
The Regents within thirty (30) days following said termination date with written
notice that the relevant Product(s) have been destroyed.
12. USE OF NAMES AND TRADEMARKS
12.1 Nothing contained in this Agreement shall be construed as conferring
any right to use in advertising, publicity, or other promotional activities any
name, trade name, trademark, or other designation of either party hereto by the
other (including contraction, abbreviation, or simulation of any of the
foregoing). Unless required by law, the use by Optionee of the name, "The
Regents of the University of California" or the name of any campus of the
University of California is expressly prohibited.
12.2 It is understood that The Regents shall be free to release to the
inventors and senior administrative officials employed by The Regents the terms
and conditions of this Agreement upon their request. If such release is made,
then The Regents shall request that such terms and conditions not be disclosed
to others. It is further understood that should a third party inquire whether a
license to Regents' Patent Rights is available, The Regents may disclose the
existence of this Agreement and the extent of the grant in Article 2 to such
third party, but shall not disclose the name of Optionee, except where The
Regents is required to release such information under either the California
Public Records Act or other applicable law.
13. REPRESENTATIONS AND WARRANTS
13.1 Optionee represents and warrants the following:
21
(13.1a) Optionee shall fund Research under and according to the
Research Agreement, which Research shall be under the
direction of the Principal Investigators.
13.2 The Regents represents and warrants the following:
(13.2a) Regents' Patent Rights were developed under funding provided
in part by the Department of Health and Human Services
(DHHS);
(13.2b) Pursuant to 35 USC 200-212, The Regents may elect to retain
title to any invention (including the Inventions) made by it
under U.S. Government funding;
(13.2c) If The Regents elects to retain title to the Inventions, The
Regents is required by law to grant to the U.S. Government a
nontransferable, paid up, non-exclusive, irrevocable license
to use the Inventions by or on behalf of the U.S. Government
throughout the world.
13.3 The Regents represents to the best of its knowledge and accordingly
warrants that:
(13.3a) Invention(s) are provided WITHOUT WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER WARRANTY, EXPRESSED OR IMPLIED. THE REGENTS MAKES NO
REPRESENTATION OR WARRANTY THAT EACH PATENT PRODUCT,
UNPROTECTED PATENT PRODUCT, OR METHOD WILL NOT INFRINGE ANY
PATENT OR OTHER PROPRIETARY RIGHT;
(13.3b) IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF
THIS OPTION OR THE USE OF THE INVENTION(S), METHOD,
UNPROTECTED PATENT PRODUCT, OR PATENT PRODUCT;
(13.3c) Nothing in this Agreement shall be construed as a warranty
or representation by The Regents as to the validity,
enforceability, or scope of any of Regents' Patent Rights; a
warranty or representation that anything made, used, sold,
or otherwise disposed of under any rights granted in this
Agreement is or will be free from infringement of
22
patents of third parties; an obligation to bring or
prosecute actions or suits against third parties for patent
infringement; or conferring by implication, estoppel or
otherwise any license or rights under any patents of The
Regents other than Regents' Patent Rights as defined herein,
regardless of whether such patents are dominant or
subordinate to Regents' Patent Rights (specifically, The
Regents does not grant to Optionee any rights under U.S.
Patent No. 4,468,464, U.S. Patent No. 4,237,224 and U.S.
Patent No. 4,740,470 set forth in the Recitals of this
Agreement); or an obligation to furnish any know-how that
does not constitute Research Information not provided under
the Research Agreement or Regents' Patent Rights.
14. INDEMNIFICATION
14.1 Optionee agrees to indemnify, hold harmless, and defend The Regents,
its officers, employees, and agents; the sponsors of the research that led to
the Invention; the inventors (and their employers) of any invention covered by
any patents and patent applications comprising Regents' Patent Rights,
Invention, Method, and Product(s) contemplated hereunder against any and all
claims, suits, losses, damage, costs, fees, and expenses resulting from or
arising out of anything performed under this Agreement.
15. NOTICES
15.1 Any payment, notice, or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective (a) on the date of delivery if delivered
in person or (b) on the fourth day after mailing if mailed by first-class
certified mail, postage paid, to the respective address given below, or to such
other address as it shall designate by written notice given to the other party
as follows:
23
In the case of the Optionee: IMAGENETICS INCORPORATED
000 Xxxx Xxxxxxxxxxx Xxxx
P. 0. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Vice President, Research & Development
In the case of The Regents: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
Office of Technology Transfer
0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Director
16. ASSIGNABILITY
16.1 This Agreement is binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns, provided, however,
this Agreement shall be personal to the Licensee and shall be assignable by the
Licensee only with the written consent of The Regents, which consent shall not
be unreasonably withheld, except that Licensee may freely assign this Agreement
to an Affiliate or to a business entity that acquires all or substantially all
of the business or assets of the Licensee and that assumes, in writing, the
performance of all provisions of this Agreement, the 2nd License Agreement, and
the Research Agreement.
17. LATE PAYMENTS
17.1 In the event royalty payments, fees, or patent prosecution costs are
not received by The Regents when due, Optionee shall pay to The Regents interest
charges at the rate of five percent (5%) plus the rate of interest which is
charged by the San Francisco Federal Reserve Bank to member banks twenty-five
(25) days prior to the date the payment was due. Such interest shall be
calculated from the date
24
payment was due until actually received by The Regents. Acceptance by The
Regents of any late payment interest from Optionee under this Paragraph 17.1
shall in no way affect the provision of Article 18 (WAIVER) herein.
18. WAIVER
18.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.
19. GOVERNING LAWS
19.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or
patent application shall be governed by the applicable laws of the country of
such patent or patent application.
20. CONFIDENTIALITY
20.1 Optionee and The Regents respectively shall treat and maintain the
other party's proprietary business, patent prosecution, software, engineering
drawings, process and technical information, and other proprietary information
(hereinafter referred to as "Proprietary Information") in confidence using at
least the same degree of care as that party uses to protect its own proprietary
information of a like nature for a period from the date of disclosure until five
(5) years after the date of termination of this Agreement, provided that all
Proprietary Information shall be
25
labeled or marked confidential or as otherwise similarly appropriate by the
disclosing party, or if the Proprietary Information is orally disclosed, then it
shall be reduced to writing or some other physically tangible form, marked and
labeled as set forth above by the disclosing party and delivered to the
receiving party within thirty (30) days of the oral disclosure as a record of
the disclosure and the confidential nature thereof. Notwithstanding the
foregoing, Optionee may disclose Proprietary Information to its employees,
agents, consultants, and contractors, or as is deemed necessary by Optionee for
any purpose set forth or relating to this Agreement, provided that any such
parties are bound by a like duty of confidentiality.
(20.1a) Nothing contained herein shall in any way restrict or impair the
right of Optionee or The Regents to use, disclose, or otherwise
deal with any Proprietary Information:
i) which recipient can demonstrate by written records was previously
known to it; or
ii) which is now, or becomes in the future, public knowledge other
than through acts or omissions of recipient; or
iii) which is lawfully obtained without restrictions by recipient from
sources independent of the disclosing party; or
iv) which is required to be disclosed to a governmental entity or
agency in connection with seeking any governmental or regulatory
approval, or pursuant to the lawful requirement or request of a
governmental entity or agency; or
v) which is furnished to a third party by the recipient with similar
confidentiality restrictions imposed on such third party, as
evidenced in writing; or
vi) which The Regents is required to disclose pursuant to the
California Public Records Act or other applicable law.
If The Regents is required to disclose Optionee's Proprietary Information
pursuant to
26
Subparagraphs (iv) and (vi) above, The Regents shall give Licensee ten (10) days
notice prior to disclosure.
20.2 The Optionee and The Regents agree to destroy or return to the
disclosing party Proprietary Information received from the other in its
possession within fifteen (15) days following the effective date of termination.
However, each party may retain one copy of proprietary information for archival
purposes in nonworking files. Optionee and The Regents agree to provide each
other, within thirty (30) days following termination, with a written notice that
Proprietary Information has been returned or destroyed.
21. SUPPLY OF THE BIOLOGICAL MATERIALS
21.1 The Regents agrees to initially supply Optionee with viable samples of
the biological materials comprising Research Information (to the extent that
such biological materials are in a form acceptable for transfer) within thirty
(30) days upon request from Optionee up until three (3) months after termination
of the Research Agreement. To the extent Optionee requires and requests
additional samples from The Regents during the term hereof, and The Regents has
such additional samples in its possession, The Regents agrees to supply such
additional samples. Optionee agrees to pay the actual handling and shipping
costs for any additional samples provided.
21.2 To the extent Optionee is able to produce biological materials,
reagents, compositions, and materials derived from Research Information, and
subject to prudent and reasonable business judgment, Optionee shall make
reasonable efforts to provide biological materials, reagents, compositions, and
materials derived from
27
Research Information at no charge to The Regents for research purposes only in
the Division of Molecular Cytometry or in research programs at Xxxxxxxx Berkeley
Laboratory under the direction of Xxx X. Xxxx and Xxxxxx Xxxxxx. In the event
Optionee provides biological materials, reagents, compositions, and materials to
The Regents, such biological materials, reagents, compositions, and materials
are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. Optionee's obligations to provide materials shall not exceed a fair
market value for such materials in excess of one hundred fifty thousand dollars
($150,000).
22. MAINTENANCE OF THE BIOLOGICAL MATERIALS
22.1 The Regents agrees to instruct the Principal Investigators that when
circulating replicable biological materials comprising Research Information to
third parties to do so under the terms and conditions set forth in the
Biological Material Transmission Letter attached hereto as Schedule A. The
Regents expressly reserves the right to transfer replicable biological materials
comprising Research Information as provided in this Paragraph 16.1 to
Universities and nonprofit research organizations to the extent that such
transfer does not compete with Optionee. The Regents shall inform Optionee of
third party requests for biological materials and shall provide Optionee with a
copy of the fully-executed copy of the Biological Material Transmittal Letter.
The Regents shall inform Optionee of comments, suggestions, and information
provided The Regents by recipients of biological material. Optionee shall not
interfere with The Regents efforts to bail these materials to third parties.
22.2 The Optionee agrees not to transfer the replicable biological
materials
28
comprising Research Information (to the extent that such materials are not part
of any Product sold by Optionee) that are not freely available to others accept
to Affiliates, Joint Ventures, sublicensees, and potential sublicensees.
23. MISCELLANEOUS
23.1 The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
23.2 This Agreement will not be binding upon the parties until it has been
signed below on behalf of each party, in which event, it shall be effective as
of the date recited on page one.
23.3 No amendment or modification hereof shall be valid or binding upon the
parties unless made in writing and signed on behalf of each party.
23.4 This Agreement and the Research Agreement embody the entire
understanding of the parties and shall supersede all previous communications,
representations, or understandings, either oral or written, between the parties
relating to the subject matter hereof.
29
23.5 In case any of the provisions contained in this Agreement shall be
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provisions hereof,
but this Agreement shall be construed as if such invalid or illegal or
unenforceable provisions had never been contained herein.
IN WITNESS WHEREOF, both The Regents and Optionee have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, on the day and year hereinafter written.
IMAGENETICS INCORPORATED THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/ Xxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxx
----------------------- ---------------------------
(Signature) (Signature)
Name Xxxx X. Xxxxxx Name Xxxx X. Xxxxxxx
--------------------- --------------------------
(Please Print)
Title President Title: Director
-------------------- Office of Technology Transfer
Date June 7, 1994 Date 7/11/94
--------------------- --------------------------
[STAMP]
30
SCHEDULE A - PAGE 1A
University of California/San Francisco Campus (UCSF)
Instructions for Standard Letter Transmitting
Biological Materials to Universities and
Nonprofit Institutions
The attached letter is authorized for use by University of
California/(UCSF) Principal Investigators and Administrators ONLY with
Scientists at other UNIVERSITIES AND NONPROFIT RESEARCH INSTITUTIONS when
transmitting cell lines, plasmids and the like for non-commercial research
purposes.
1. Choose the appropriate form of university or nonprofit research
institution in paragraph 2.
2. Choose whether or not to include the phrase "our cooperative" in
paragraph 2.
3. Insert in paragraph 4 the amount of processing charge. If the
material is to be shipped at no charge, insert the words "no charge".
4. Send the letter IN DUPLICATE to the other scientists.
5. Do not send biological materials until you receive the duplicate copy
executed by both the scientist and the other institution.
6. Send a copy of the fully executed letter agreement to:
Xxxx X. Xxxxxxx
Director
Office of Technology Transfer
0000 Xxxxxx Xxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
7. Any changes in the wording of this standard letter must be reviewed by
the Director of the Office of Technology Transfer before acceptance.
Note: Do not use this letter for the exchange of living plants. A separate
"Testing Agreement for the Plant Varieties" is available for that
purpose.
31
SCHEDULE A - PAGE 2A
SAMPLE LETTER FOR USE PRIOR TO TRANSMISSION OF BIOLOGICAL
MATERIALS TO INVESTIGATORS AT UNIVERSITIES OR NON-PROFIT
RESEARCH INSTITUTIONS
(date)
IN DUPLICATE
To:_____________________
This is to (acknowledge receipt of your letter) (confirm our telephone
conversation) in which you requested certain research materials developed in
this laboratory be sent to you for scientific research purposes. The materials
concerned, which belong to The Regents of the University of California/San
Francisco Campus (UCSF) are:__________________________________________.
While I cannot transfer ownership of these materials to you, I will be
pleased to permit your use of these materials within your (university)
(Non-Profit Research Institution) laboratory for (our cooperative) scientific
research. However, before forwarding them to you, I require your agreement that
the materials will be received by you only for use in (our cooperative work)
(scientific research), that you will bear all risk to you or any others
resulting from your use, and that you will not pass these materials, their
progeny or derivatives, on to any other party or use them for commercial
purposes without the express written consent of The Regents of the University of
California. You understand that no other right or license to these materials,
their progeny or derivatives, is granted or implied as a result of our
transmission of these materials to you.
These materials are to be used with caution and prudence in any
experimental work, since all of their characteristics are not known.
As you recognize, there is a processing cost to us involved in providing
these materials to you. We will xxxx you for our processing costs, which will
amount to $___________________.
If you agree to accept these materials under the above conditions, please
sign the enclosed duplicate copy of this letter, then have it signed by an
authorized representative of your institution, and return it to me. Upon
receipt of that confirmation I will forward the material(s) to you.
32
SCHEDULE A - PAGE 3A
(Note: other paragraphs discussing the relevant literature, the nature of the
work, hazards relating to materials to be sent etc. may be appropriate. These
will vary depending on the individual circumstances and the relationship between
the two parties previously established. Be sure to retain a signed copy when
received and send a photocopy of the completed agreement to the University of
California Patent Administrator, Office of Technology Transfer, Systemwide
Administration, 0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000)
Sincerely yours,
ACCEPTED:
RESEARCH INVESTIGATOR
-------------------
Printed Name
-------------------
(Signature)
-------------------
Date
RESEARCH UNIVERSITY OR
NON-PROFIT INSTITUTION
-------------------
Printed Name
-------------------
(Signature)
-------------------
Date
33
SCHEDULE B - PAGE 1B
The PRINCIPAL INVESTIGATORS listed below understand and agree to abide by
the terms and conditions of Articles 22 (MAINTENANCE OF THE BIOLOGICAL
MATERIALS) of this Agreement between The Regents of the University of
California and Imagenetics Incorporated effective July 01, 1994 and to
instruct all relevant personnel working within their laboratory to act
accordingly. Said paragraph reads, in part, as follows:
16.1 THE REGENTS AGREES TO INSTRUCT THE PRINCIPAL INVESTIGATORS THAT WHEN
CIRCULATING REPLICABLE BIOLOGICAL MATERIALS COMPRISING RESEARCH INFORMATION
THAT HAVE NOT BEEN RELEASED IN AN UNRESTRICTED MANNER TO THIRD PARTIES TO
DO SO UNDER THE TERMS AND CONDITIONS SET FORTH IN THE BIOLOGICAL MATERIAL
TRANSMISSION LETTER ATTACHED HERETO AS APPENDIX A.
By /s/ Xxx X. Xxxx 4/24/94
--------------------- --------------------
Xxx X. Xxxx Date
By /s/ Xxxxxx Xxxxxx 5-31-94
--------------------- --------------------
Xxxxxx Xxxxxx Date
By /s/ Xxxxx Xxxxxxxxxxx 5/24/94
--------------------- --------------------
Xxxxx Xxxxxxxxxxx Date
By /s/ Xxxxxxxx Xxxxxxx 5/24/94
--------------------- --------------------
Xxxxxxxx Xxxxxxx Date
By /s/ Xxxx Xxxxxxxxx 8/25/94
--------------------- --------------------
Xxxx Xxxxxxxxx Date
By /s/ Xxxxx Xxxxxx 5/31/94
--------------------- --------------------
Xxxxx Xxxxxx Date
By /s/ Xxxxxx Xxxxxx 5/24/94
--------------------- --------------------
Xxxxxx Xxxxxx Date
34
SCHEDULE C - PAGE 1C
Chancellor Xxxxxx X. Xxxxxx of the University of California at San
Francisco has read and approved the terms and conditions of the option agreement
titled OPTION AGREEMENT FOR INVENTIONS MADE IN THE FIELD OF MOLECULAR
CYTOGENETICS.
By /s/ Xxxxxx X. Xxxxxx 7/15/94
---------------------------------- ---------------
Chancellor Xxxxxx X. Xxxxxx Date
35
