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EXHIBIT 10.4
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement (the "Agreement"), dated the
31st day of July, 2001, is by and among Becton, Xxxxxxxxx and Company, a
corporation organized and existing under the laws of New Jersey and having its
principal office at 0 Xxxxxx Xxxxx, Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000 ("BD"),
TriPath Imaging, Inc., a corporation organized and existing under the laws of
Delaware and having its principal office at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 ("TriPath"), and TriPath Oncology, Inc., a corporation
organized and existing under the laws of Delaware and a wholly-owned subsidiary
of TriPath, having its principal office at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 ("Newco").
INTRODUCTION
1. TriPath possesses certain technology relating to image
analysis for cell and tissue disease diagnosis and monitoring.
2. TriPath has established Newco as a subsidiary for the purpose
of developing oncology assays and instrumentation and providing laboratory
services.
3. BD is engaged in the business of, among other things,
discovering, developing and marketing diagnostic products.
4. BD is a party to that certain Collaboration and License
Agreement, dated as of February 21, 1999, as amended, by and between BD and
Millennium Pharmaceuticals, Inc., a Delaware corporation ("MPI"), as successor
to Millennium Predictive Medicine, Inc. (the "BD/MPI Collaboration Agreement"),
as further amended by the Third Amendment of Collaboration and License Agreement
of even date herewith between BD and MPI (the "Third Amendment"), for the
purpose of discovering and commercializing novel diagnostic and pharmacogenomic
products.
5. BD wishes to engage Newco to, among other things, develop
diagnostic and pharmacogenomic products resulting from the Research Program
under the BD/MPI Collaboration Agreement.
NOW, THEREFORE, BD, TriPath and Newco agree as follows:
Article I
Definitions
Capitalized terms used herein which are not otherwise defined shall
have the same meanings as are assigned to them in the BD/MPI Collaboration
Agreement. When used in this Agreement, each of the following terms shall have
the meanings set forth in this Article I:
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Section 1.1 "Affiliate" means any corporation, company,
partnership, joint venture or other entity which controls, is controlled by, or
is under common control with a Party. For purposes of this Section 1.1,
"control" shall mean (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares having the
right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interests with the power to direct the management and
policies of such non-corporate entities.
Section 1.2 "Agreement Year" means (a) the period beginning on
the Effective Date and ending on September 30, 2001 (the "First Agreement
Year"), and (b) each succeeding twelve (12) month period thereafter during the
Development Program.
Section 1.3 "Assays" means formatted reagents for conducting a
diagnostic or pharmacogenomic test using (i) an instrument(s) owned by Newco, or
to which Newco otherwise has access, and/or (ii) any other platform(s)
designated by the BD/Newco Joint Steering Committee.
Section 1.4 "BD/MPI Joint Steering Committee" means the Joint
Steering Committee established and maintained under the BD/MPI Collaboration
Agreement.
Section 1.5 "Becton Xxxxxxxxx Intellectual Property" means Becton
Xxxxxxxxx Program Intellectual Property and Becton Xxxxxxxxx Non-Program
Intellectual Property, collectively.
Section 1.6 "Becton Xxxxxxxxx Non-Program Intellectual Property"
means Becton Xxxxxxxxx Non-Program Know-How and Becton Xxxxxxxxx Non-Program
Patent Rights, collectively.
Section 1.7 "Becton Xxxxxxxxx Non-Program Know-How" means any
Know-How other than Becton Xxxxxxxxx Program Know-How that is utilized in the
research, development and/or commercialization of Program Products, and is owned
or controlled by, or licensed to, BD and to which BD has the right to grant
licenses or sublicenses without violating the terms of any agreement with a
third party, provided however that, Becton Xxxxxxxxx Non-Program Know-How does
not include MPMx Program Know-How.
Section 1.8 "Becton Xxxxxxxxx Non-Program Patent Rights" means a
Patent Right (a) that covers Becton Xxxxxxxxx Non-Program Know-How, (b) that is
owned or controlled by, or is licensed to BD, and (c) to which BD has the right
to grant a license or sublicense without violating the terms of any agreement
with a third party.
Section 1.9 "Change of Control" means (a) a merger, consolidation
or other transaction or series of related transactions as a result of which
persons who were shareholders of a Party immediately prior thereto would not
immediately thereafter beneficially own (as defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) at least fifty percent (50%) of the
combined voting power of such Party or the surviving entity immediately after
such transaction; or (b) any one person or group, as such terms are used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than any trustee or
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other fiduciary holding securities under an employee benefit plan of such
Party), together with any of such person's "affiliates" or "associates", as such
terms are used in the Exchange Act, becoming the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
the combined voting power of the outstanding securities of such Party, or (c)
any sale of all or substantially all of the assets of such Party, in one
transaction or a series of related transactions.
Section 1.10 "Confidential Information" means all Know-How or
other information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing Party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such Know-How or other
information is disclosed by the disclosing Party to the other Party.
Notwithstanding the foregoing, (a) all TriPath Program Intellectual Property,
Newco Program Intellectual Property and Becton Xxxxxxxxx Intellectual Property
shall constitute Confidential Information and (b) Know-How or other information
which is orally, electronically or visually disclosed by a Party, or is
disclosed in writing without an appropriate letter, stamp or legend, shall
constitute Confidential Information of a Party (i) if the disclosing Party,
within thirty (30) days after such disclosure, delivers to the other Party a
written document or documents describing the Know-How or other information and
referencing the place and date of such oral, visual, electronic or written
disclosure and the names of the persons to whom such disclosure was made, or
(ii) such Know-How or other information is of the type that is customarily
considered to be confidential information by persons engaged in activities that
are substantially similar to the activities being engaged in by the Parties
pursuant to this Agreement.
Section 1.11 "Development Plan" means (a) the research and
development plan to be undertaken in the Development Program during the First
Agreement Year, which is attached as Exhibit A to this Agreement, and (b) each
development plan established for subsequent Agreement Years by the BD/Newco
Joint Steering Committee, as each such plan may be updated or amended pursuant
to Section 2.3(b).
Section 1.12 "Development Program Director" means the person
appointed by BD or Newco to serve as such Party's principal coordinator and
liaison for the Development Program. The Development Program Director appointed
by BD is referred to as the "BD Development Program Director," and the
Development Program Director appointed by Newco is referred to as the "Newco
Development Program Director."
Section 1.13 "Effective Date" means the date on which the last of
the conditions set forth in Article XI shall have been fulfilled or waived.
Section 1.14 "Executive Officers" means the Chief Executive
Officer of BD (or a senior executive officer of BD designated by BD) and the
President of TriPath (or a senior executive officer of TriPath designated by
TriPath).
Section 1.15 "Know-How" means any information, inventions,
copyrights, trade secrets, data or materials, and software.
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Section 1.16 "Marker" means any reagent, including without
limitation, DNA, RNA, protein or antibody, which is suggested by scientific data
to be of potential use as a Diagnostic Product in the human disease of [*****]
or a component thereof. Marker shall include Marker Derivative.
Section 1.17 "Marker Derivative" means, as to a given Marker, a
derivative, improvement, new use or modification of such Marker, including
without limitation, any extension of a DNA, RNA or protein marker, or any
segment of a Marker.
Section 1.18 "Net Sales" means the gross amount invoiced by BD
and/or its Affiliates and/or sublicensees, or by Newco and/or TriPath and/or
their respective Affiliates and/or sublicensees, as the case may be, (a)
[*****], or (b) [*****]:
a. [*****]; and
b. [*****].
It is understood by BD, TriPath and Newco that a Program Product may be
sold under a reagent rental agreement, or analogous agreement, where a purchaser
is provided an instrument for use in conjunction with a Program Product and the
costs associated with the placement and use of the instrument are not separately
billed, but instead represent some portion of the purchase price of the Program
Product, such that the transaction does not enable a determination of the Net
Sales solely with respect to a Program Product. In such event, the Net Sales for
those units of such a particular Program Product which are sold on a reagent
rental or analogous basis shall be calculated by [*****].
If no Program Products are sold other than under a reagent rental
agreement or analogous basis during the period for which Net Sales is being
calculated, then the Net Sales for purposes of determining royalty payments
shall be the Net Sales [*****], that [*****] being established in accordance
with U.S. GAAP.
In the event Program Products are sold together with other products at
a single price, or a Program Product is configured as a combination package
containing other products which do not interact with the Program Validated
Marker to [*****], such single price shall be [*****].
All such amounts as described in this Section 1.18 shall be determined
from the books and records of BD and its Affiliates and/or sublicensees, or
Newco and TriPath and their respective Affiliates and/or sublicensees, as the
case may be, maintained in accordance with U.S. GAAP.
Section 1.19 "Newco Program Intellectual Property" means Newco
Program Know-How and Newco Program Patent Rights, collectively.
Section 1.20 "Newco Program Know-How" means any Know-How that (a)
is developed using MPMx Program Intellectual Property or Becton Xxxxxxxxx
Intellectual Property, (b) either (i) Newco or TriPath develops or acquires in
the course of the Research Program
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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and/or the Development Program, or (ii) Newco or TriPath develops or acquires
during the term of, but not in the course of, the Research Program and/or the
Development Program, and (c) is owned or controlled by, or licensed to Newco or
TriPath and to which Newco or TriPath has the right to grant licenses or
sublicenses without violating the terms of any agreement with a third party;
provided that Newco Program Know-How shall not include Newco/MPI Joint Program
Know-How.
Section 1.21 "Newco Program Patent Rights" means a Patent Right
(a) that covers Newco Program Know-How, (b) that is owned or controlled by, or
is licensed to Newco or TriPath, and (c) to which Newco or TriPath has the right
to grant a license or sublicense without violating the terms of any agreement
with a third party.
Section 1.22 "Newco Sublicense Agreement" means the Sublicense
Agreement by and among BD, TriPath and Newco dated as of the date hereof.
Section 1.23 "Non-Cervical Screening Product" means a Screening
Product in a Disease Area other than cervical cancer.
Section 1.24 "Party" means BD, TriPath or Newco; "Parties" means
any combination of two or more of BD, TriPath and Newco, as the context
indicates. As used in this Agreement, references to "third parties" do not
include a Party or its Affiliates.
Section 1.25 "Patent Rights" means a U.S. and/or foreign patent or
patent application and all divisions, continuations, continuations-in-part,
reissues, reexaminations and extensions thereof, in whole or in part.
Section 1.26 "Reference Laboratory Services" means any service
that utilizes a Program Product to obtain information that is reported to a
third party for which the provider of the service receives financial
consideration.
Section 1.27 "Screening Product" shall have the meaning set forth
in the BD/MPI Collaboration Agreement. Screening Product shall include any serum
based monitoring assay used to assess therapeutic responses.
Section 1.28 "Transitional Services Agreement" means the
Transitional Services Agreement by and among BD, TriPath and Newco dated as of
the date hereof.
Section 1.29 "TriPath License Agreement" means the License and
Intellectual Property Access Agreement by and between BD and TriPath dated as of
the date hereof.
Section 1.30 "TriPath Program Intellectual Property" means TriPath
Program Know-How and TriPath Program Patent Rights, collectively.
Section 1.31 "TriPath Program Know-How" means any Know-How that is
utilized in the research, development and/or commercialization of Program
Products or a Viable Platform, and is owned or controlled by, or licensed to,
TriPath and to which TriPath has the right to grant licenses or sublicenses
without violating the terms of any agreement with a third party provided that
TriPath Program Know-How shall not include Newco Program Know-How.
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Section 1.32 "TriPath Program Patent Rights" means a Patent Right
(a) that covers TriPath Program Know-How, (b) that is owned or controlled by, or
licensed to, TriPath, and (c) to which TriPath has the right to grant a license
or sublicense without violating the terms of any agreement with a third party.
Section 1.33 "Viable Platform" means a semi or fully automated
instrument used to detect and/or measure clinically relevant analyte(s) of test
specimens, which instrument is (a) available to Newco for use with Program
Products (including, to the extent applicable, the receipt by Newco of all
licenses from third-parties required to commercialize Program Products using
such instrument), and (b) determined by the BD/MPI Joint Steering Committee to
be suitable for use with Program Products.
Section 1.34 Additional Definitions. Each of the following
definitions is set forth in the section of this Agreement indicated below:
Definition Section
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"1974 Convention" 12.4
"ADR" 10.1
"ASR" 3.1(b)
"BD Development Program Director" 1.13
"BD Gene" 7.1
"BD Indemnified Parties" 12.1(b)
"BD/Newco Joint Steering Committee" 2.1(a)
"BD Representatives" 2.1(c)
"Breaching Party" 9.3
[*****] 4.2(b)
"CPR" Exhibit D
"Development Milestones" 2.3
"First Agreement Year" 1.2
"Infringing Activity" 5.3(b)
"Invalidity Claim" 5.4(b)
"Licensed Intellectual Property" 8.5(e)
[*****] 4.2(b)
[*****] 4.2(b)
[*****] 4.2(b)
"Newco Indemnified Parties" 12.1(a)
"Newco Inventions" 5.1(a)
"Newco Development Program Director" 1.13
"Non-Breaching Party" 9.3
[*****] 3.1(b)
Article II
Development Program
Section 2.1 BD/Newco Joint Steering Committee.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
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a. Composition; Responsibilities. BD and Newco shall establish a
joint steering committee (the "BD/Newco Joint Steering Committee"), comprised of
(i) [*****] representatives of BD and [*****] representatives of Newco, [*****].
Each Party shall make its designation of its representatives not later than
thirty (30) days after the Effective Date. Each Party shall use reasonable
efforts to designate as its representatives individuals that shall have the
requisite experience and knowledge to oversee the Development Program. The
BD/Newco Joint Steering Committee shall meet within forty-five (45) days after
the Effective Date and, thereafter, at least quarterly during the course of the
Development Program or until termination of this Agreement, if earlier, to (i)
[*****] of the Development Program, (ii) [*****] to be prepared [*****] for the
Development Program for each Agreement Year following the First Agreement Year,
including the Development Milestones (as herein defined) set forth therein, and
any [*****], (iii) [*****] for the Development Program, (iv) [*****] set under
the BD/MPI Collaboration Agreement, (v) [*****] for Program Products, [*****],
(vi) subject to Section 2.4, [*****], (vii) [*****] under Section 2.4 of the
BD/MPI Collaboration Agreement, (viii) consider and act upon such other matters
as are specified in this Agreement, (ix) [*****], if any, pursuant to Section
2.4 of the BD/MPI Collaboration Agreement and (xi) attempt to [*****] this
Agreement that may arise between BD and Newco. The location of such meetings of
the BD/Newco Joint Steering Committee shall alternate between New Jersey and
North Carolina, or as otherwise agreed by the Parties. The BD/Newco Joint
Steering Committee may also meet by means of a telephone conference call. Either
BD or Newco may change any one or more of its representatives to the BD/Newco
Joint Steering Committee at any time upon notice to the other Party. Each of BD
and Newco shall use reasonable efforts to cause its representatives to attend
the meetings of the BD/Newco Joint Steering Committee. If a representative of a
Party is unable to attend a meeting, such Party may designate an alternate to
attend such meeting in place of the absent representative. In addition, each of
BD and Newco may, at its discretion, invite non-voting employees, and, with the
consent of the other Party, consultants or scientific advisors (provided they
are engaged under obligations of confidentiality) to attend the meetings of the
BD/Newco Joint Steering Committee to, among other things, review and discuss the
Development Program and its results.
b. Decision Making.
i. In general, matters to be agreed upon or
approved by BD and Newco shall be referred to the BD/Newco Joint Steering
Committee. Upon five business days written notice, either Party may convene a
special meeting of the BD/Newco Joint Steering Committee for the purpose of
resolving disputes. All decisions of the BD/Newco Joint Steering Committee
(including, without limitation, resolution of disputes) shall be made [*****].
ii. Each Executive Officer shall have the right
to engage the services of any number of independent experts in the field in
question (each individual so engaged by each Executive Officer to be engaged
under obligations of confidentiality and [*****].
iii. [*****].
iv. Subject to subsection (c) below and
notwithstanding any other provision contained in this Section 2.1 to the
contrary, [*****], including without limitation,
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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decisions regarding the Performance Specifications and the Viable Platform, and
the resolution of any disputes pursuant to the deadlock and dispute resolution
provisions of the BD/MPI Collaboration Agreement, and [*****] and the resolution
of any such disputes.
c. BD/MPI Joint Steering Committee. BD shall have a
nominee of Newco admitted as a representative of BD on the BD/MPI Joint Steering
Committee, and shall also appoint a nominee of Newco as BD's Program Director
under the Research Program (the BD employees and Newco nominees on the BD/MPI
Joint Steering Committee being referred to herein collectively as the "BD
Representatives"). The BD/Newco Joint Steering Committee shall determine, in
accordance with the procedures set forth in this Section 2.1, how the BD
Representatives shall vote on all matters brought to a vote of the BD/MPI Joint
Steering Committee and no BD Representatives shall vote on any such matters
brought to a vote of the BD/MPI Joint Steering Committee until the BD/Newco
Joint Steering Committee has made such a determination; provided, that in the
event pursuant to Section 2.1, the BD/Newco Joint Steering Committee and the
Executive Officers shall fail to agree on how the BD Representatives shall vote
on the BD/MPI Joint Steering Committee with respect to adjustments to or
allocations of the Funding Amount pursuant to Section 4.5 of the BD/MPI
Collaboration Agreement, then [*****] with respect to such matters (it being the
agreement of the Parties, however, that BD shall not fail to pay MPI the full
Funding Amount (approximately [*****] of which remains to be allocated by the
BD/MPI Joint Steering Committee for the Fourth Contract Year and later Contract
Years plus an Additional Payment of [*****] pursuant to Section 4.2 of the
BD/MPI Collaboration Agreement) or pay less than the minimum Funding Amount for
the Second, Third and Fourth Contract Years without the prior written consent of
Newco, which consent shall not be unreasonably withheld).
Section 2.2 Research and Development Programs. Subject to Section
2.1 and in reliance upon the representations, warranties and covenants under
Article 8 of this Agreement, Newco hereby agrees to assume BD's obligations
under the Research Program and the Development Program pursuant to the BD/MPI
Collaboration Agreement, including without limitation, undertaking those
obligations of BD set out in Sections 2.7(c) and 2.10 of the BD/MPI
Collaboration Agreement with respect to the Research Program and Development
Program, respectively.
Section 2.3 Management of Development Program.
a. Development Program Directors. BD and Newco shall
each appoint a Development Program Director prior to the Effective Date. Each
Party shall have the right to designate a different Development Program
Director. The Development Program Directors shall jointly oversee the conduct of
the Development Program and shall be responsible for, among other things,
[*****].
b. Development Plan. Newco shall undertake the
Development Program during the Program Term in accordance with the Development
Plan. The Development Plan shall set forth the development goals and specific
quarterly development milestones (the "Development Milestones") for the
Development Program during each Agreement Year. Newco shall prepare the
Development Plan for each Agreement Year following the First Agreement
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Year. The Development Program Directors shall periodically review the
Development Plan and [*****], as well as any proposed revised development goals
or Development Milestones for the Development Plan. [*****] an expeditious
basis.
Section 2.4 Commercialization.
a. Commercialization Issues. The BD/Newco Joint Steering
Committee shall review issues regarding the manufacturing (including without
limitation, the transfer pricing between the Parties for assays and instruments,
to the extent applicable), marketing, promotion, sale and distribution of
Program Products in the Territory, subject to any rights of MPI pursuant to
Section 2.11(a) of the BD/MPI Collaboration Agreement, and to Section 19 of the
Third Amendment. Without limiting the generality of the foregoing, [*****]
(subject to the receipt of any necessary consent or approval under the BD/MPI
Collaboration Agreement), [*****] (provided, that in no event shall a Party be
required to commercialize any Program Product if such Party determines it does
not wish to commercialize such Program Product). In furtherance thereof,
[*****]. Without in any way limiting the generality of the foregoing, unless
Newco otherwise agrees in writing, Newco shall be present at any discussions
with any third party for potential rights to develop and/or commercialize any
Program Product which is a Screening Product. Notwithstanding the foregoing, in
the event any license granted hereunder by BD relating to any Exclusive Product
Area or Co-Exclusive Non-Colon Pharmacogenomic Product Opportunity is terminated
or converted to non-exclusive pursuant to Sections 2.7 or 2.9, in either case
with respect to the Territory or a Major Market, then [*****].
b. Product Labeling. Newco and TriPath acknowledge that
MPI has certain rights under the BD/MPI Collaboration Agreement (i) to have its
name and logo (or any successor name and logo) on the product label for Program
Products, and to have all written materials associated with each Program Product
indicate that the Program Product was developed with the use of MPI technology,
and (ii) to monitor the quality of such Program Products, and each of Newco and
TriPath agrees to comply with such provisions of the BD/MPI Collaboration
Agreement to the extent it markets and sells any Program Product.
Section 2.5 [Intentionally omitted]
Section 2.6 Newco Development Diligence Obligations.
a. General Obligation. In furtherance of Section 2.2,
Newco agrees to comply with the diligence obligations set forth in Section 2.12
of the BD/MPI Collaboration Agreement; provided, that (i) BD and Newco
acknowledge and agree, that to the extent there are any obligations set forth in
Section 2.12 of the BD/MPI Collaboration Agreement pertaining to the
commercialization of Program Products, the obligations of Newco under this
Section 2.6 shall be subject to [*****] pursuant to Section 2.4, (ii) the time
periods for performing Newco's diligence obligations may be adjusted by the
BD/Newco Joint Steering Committee as a result of any determinations made by the
BD/Newco Joint Steering Committee pursuant to Section 2.4, and (iii) the time
periods for performing Newco's diligence obligations may be extended in the
event the BD/MPI Joint Steering Committee has extended the time allotted to meet
the applicable diligence benchmark under the BD/MPI Collaboration Agreement.
Notwithstanding
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the foregoing, Newco shall have no obligation to comply with any diligence
obligations added to or modified in the BD/MPI Collaboration Agreement after the
Effective Date of this Agreement unless Newco has agreed in advance to such
additions or modifications, and BD hereby agrees not to add to or modify any
such obligations in the BD/MPI Collaboration Agreement without the prior written
consent of Newco, which consent shall not be unreasonably withheld.
b. Progress Reports. Newco shall provide BD with reports
as required by Sections 2.12(c) and 2.13 of the BD/MPI Collaboration Agreement.
Section 2.7 Failure to Meet Development Milestones. In the event
that BD does not believe that Newco has met any Development Milestones set forth
in the Development Plan, and as a result of such failure, BD believes that there
is a substantial risk that any of the diligence obligations set forth in the
BD/MPI Collaboration Agreement will not be met with respect to any Exclusive
Product Area or Co-Exclusive Non-Colon Pharmacogenomic Product Opportunity, then
the following provisions shall apply:
(a) Notice; Determination; Effects. BD shall notify Newco
in writing to that effect. If Newco shall disagree with BD's determinations,
[*****], pursuant to Section 2.1. If the BD/Newco Joint Steering Committee or
the Executive Officers resolve the dispute in favor of BD, or are unable to
resolve the dispute in the time allotted in Section 2.1, then, at the election
of BD, and upon notification by BD to Newco, BD may [*****] to any Program
Products relating to such Exclusive Product Area or Co-Exclusive Non-Colon
Pharmacogenomic Product Opportunity[*****] either enters into an agreement with
any third party for the further development and/or commercialization of Program
Products for which royalties are due to Newco from BD hereunder or develops such
Program Products itself, [*****].
(b) Exceptions to BD's Right to Terminate or Convert to
Non-Exclusive.
(i) Reasonable Efforts. Notwithstanding the
foregoing, BD shall have no right to [*****] as contemplated in paragraph (a)
above if each of the following conditions are met: (1) Newco can demonstrate
that it has used commercially reasonable efforts in the development and
commercialization of Program Products up until the time of the failure to meet
the Development Milestones [*****], to a revised date (in no event later than
six months after the failure unless it is necessary to restart the relevant
clinical trials, in which event such date as shall be agreed upon by the
BD/Newco Joint Steering Committee) by which Newco shall meet such Development
Milestones; and (3) Newco achieves the Development Milestones by such revised
date [*****].
(ii) Transitional Services Agreement Related
Causes. Furthermore and notwithstanding anything in Section 2.7 to the contrary,
BD shall have no right to [*****] as contemplated in Section 2.7(a) above (or
following the revised date established under Section 2.7(b) above) if Newco's
failure to meet the Development Milestones [*****] is caused (directly or
indirectly) by [*****] (as such terms are defined in the Transitional Services
Agreement), [*****] (as defined in the Transitional Services Agreement), during
the term of the Transitional Services Agreement, regardless of whether or not
any such [*****] is due to any fault of BD or MPI, and provided that any such
[*****] is not due to the fault of Newco. In such event, the BD/Newco Joint
Steering Committee shall extend the time by which Newco shall be required to
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complete such Development Milestones under Section 2.7, which extension period
shall be no shorter than the period for which the [*****], as applicable.
(iii) Breach by BD or MPI. Notwithstanding
anything in Section 2.7(a) to the contrary, BD shall have no right to [*****] as
contemplated in paragraph (a) above if Newco's failure to meet the Development
Milestones [*****] is caused (directly or indirectly) by [*****], as the case
may be.
Section 2.8 Regulatory Matters. Newco will own all regulatory
filings relating to Program Products. [*****] all such regulatory filings and
related data developed as part of any clinical trials which are required to
obtain regulatory or other approval to manufacture, market and sell Program
Products in the Territory. In addition, [*****] participate in the preparation
of any application or other submission for regulatory or other approvals, to
attend all preparatory and regulatory meetings with the FDA or any foreign
regulatory agencies concerning any applications or submissions for regulatory or
other approvals, and to otherwise participate in the process for obtaining
regulatory or other approvals. Newco acknowledges that MPI has certain rights
under the BD/MPI Collaboration Agreement to review such submissions and attend
such meetings, and Newco agrees to comply with such provisions of the BD/MPI
Collaboration Agreement. In the event that BD has a right to terminate and does
terminate any or all of the licenses granted to Newco pursuant to Section 3.1
with respect to any Program Products, [*****].
Section 2.9 Newco Sublicense Agreement. In the event any
sublicense granted under the Newco Sublicense Agreement terminates or is
terminated, [*****], with respect to any Program Products relating to an
Exclusive Product Area or Co-Exclusive Non-Colon Pharmacogenomic Product
Opportunity pursuant to Sections 2.5 or 8.4 of the Newco Sublicense Agreement,
either for all purposes or only with respect to a Major Market, any license
granted by BD pursuant to Article III hereof with respect to such Program
Products shall likewise terminate [*****]. In the event of a termination, all
sublicenses granted to third parties by Newco pursuant to Section 3.1(f) shall
also terminate, and the provisions of Section 2.7 regarding the [*****] in the
event of a termination of any license shall apply.
Article III
Grant of Rights
Section 3.1 BD Grants.
a. Research Licenses. BD hereby grants to Newco a
[*****] right and license in the Territory, [*****], under the Becton Xxxxxxxxx
Intellectual Property, to (i) make and use Program Candidate Markers and Program
Validated Markers in the course of the Research Program [*****] for Newco to
undertake BD's responsibilities as set forth in the Research Plan and (ii) make
and use Program Validated Markers in the course of the Development Program
[*****] for Newco to undertake BD's responsibilities as set forth in the
Development Program.
b. Product Commercialization Licenses.
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(i) BD hereby grants to Newco [*****] right and
license in the Territory, [*****], under the Becton Xxxxxxxxx Intellectual
Property, to make and use (A) any Program Diagnostic Product that has not
received FDA Approval for the purpose of Newco providing Reference Laboratory
Services inside any Exclusive Non-Colon Product Area, and (B) any Program
Diagnostic Product that has not received FDA Approval and that contains a
Program Validated Marker controlled by a Party that was developed for an
Exclusive Non-Colon Product Area for the purpose of Newco providing Reference
Laboratory Services inside the Disease Area that includes such Exclusive
Non-Colon Product Area.
(ii) BD hereby grants to Newco [*****] right and
license in the Territory, without the right to grant sublicenses except as
provided in Section 3.1(f), under the BD Intellectual Property, to make and use
any Program Pharmacogenomic Product that has not received FDA Approval for the
purpose of Newco providing Reference Laboratory Services to address any
Co-Exclusive Non-Colon Pharmacogenomic Product Opportunity.
(iii) BD hereby grants to Newco [*****] right and
license in the Territory, [*****], under the Becton Xxxxxxxxx Intellectual
Property, to make and use (A) any Program Diagnostic Product that has received
FDA Approval for the purpose of Newco providing Reference Laboratory Services
inside any Exclusive Non-Colon Product Area, and (B) any Program Diagnostic
Product that has received FDA Approval and that contains a Program Validated
Marker controlled by a Party that was developed for an Exclusive Non-Colon
Product Area for the purpose of Newco providing Reference Laboratory Services
inside the Disease Area that includes such Exclusive Non-Colon Product Area.
(iv) BD hereby grants to Newco [*****] right and
license in the Territory, [*****], under the BD Intellectual Property, to make
and use any Program Pharmacogenomic Product that has received FDA Approval for
the purpose of Newco providing Reference Laboratory Services to address any
Co-Exclusive Non-Colon Pharmacogenomic Product Opportunity.
(v) BD hereby grants to each of Newco and
TriPath a [*****] right and license in the Territory, [*****], under the Becton
Xxxxxxxxx Intellectual Property, to make, use, import, offer to sell and sell
(A) any Program Diagnostic Product that is a Staging Product that has received
FDA Approval inside any Exclusive Non-Colon Product Area, and (B) any Program
Diagnostic Product that is a Staging Product that has received FDA Approval and
that contains a Program Validated Marker controlled by a Party that was
developed for a Screening Product in an Exclusive Non-Colon Product Area inside
the Disease Area that includes such Exclusive Non-Colon Product Area.
(vi) BD hereby grants to each of Newco and
TriPath a [*****] and license in the Territory, [*****], under the Becton
Xxxxxxxxx Intellectual Property, to make, use, import, offer to sell and sell
any Program Pharmacogenomic Product that has received FDA Approval to address
any Co-Exclusive Non-Colon Pharmacogenomic Product Opportunity.
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(vii) BD hereby grants to Newco and TriPath a
[*****] right and license in the Territory, [*****], under the Becton Xxxxxxxxx
Intellectual Property to make, use, import, offer to sell and sell (A) any
Program Diagnostic Product that is a Screening Product and that has received FDA
Approval inside any Exclusive Non-Colon Product Area within the Disease Area
[*****] and (B) any Program Diagnostic Product that is a Screening Product for
the Disease Area [*****] that has received FDA Approval and that contains a
Program Validated Marker controlled by a Party that was developed for a Staging
Product in an Exclusive Non-Colon Product Area inside the Disease Area [*****].
(viii) BD hereby grants to each of Newco and
TriPath a [*****] right and license in the Territory, [*****], under the Becton
Xxxxxxxxx Intellectual Property, to make, use, import, offer to sell and sell:
(A) any Program Diagnostic Product that is a
Staging Product [*****] and as an Analyte Specific Reagent ("ASR") product
inside any Exclusive Non-Colon Product Area, (B) any Program Diagnostic Product
that is a Staging Product [*****] and that contains a Program Validated Marker
controlled by a Party that was developed for an Exclusive Non-Colon Product Area
as a [*****] and as an ASR product inside the Disease Area that includes such
Exclusive Non-Colon Product Area, (C) any Program Diagnostic Product that is a
Screening Product [*****] and as an ASR product inside any Exclusive Non-Colon
Product Area within the Disease Area [*****], and (D) any Program Diagnostic
Product that is a Screening Product [*****] and that contains a Program
Validated Marker controlled by a Party that was developed for a Staging Product
as a [*****] and as an ASR product inside any Exclusive Non-Colon Product Area
within the Disease Area [*****].
(ix) BD hereby grants to each of Newco and
TriPath a [*****] right and license in the Territory, without the right to grant
sublicenses except as provided in Section 3.1(f), under the Becton Xxxxxxxxx
Intellectual Property, to make, use, import, offer to sell and sell any Program
Pharmacogenomic Product that has not received FDA Approval as a [*****] and
as an ASR product to address any Co-Exclusive Non-Colon Pharmacogenomic Product
Opportunity.
c. Research Use License Relating to [*****]. BD hereby
grants to Newco, a worldwide, [*****] right and license, without the right to
grant sublicenses, under Becton Xxxxxxxxx Intellectual Property to make and use
Markers to (i) discover and develop Validated Markers relevant to the Disease
Area [*****] and (ii) develop, but not to sell or otherwise commercially
exploit, Diagnostic Products for use in the Disease Area [*****].
d. Commercialization Rights Relating to [*****]. If the
BD/Newco Joint Steering Committee determines that Diagnostic Products and/or
Pharmacogenomic Products will be developed and commercialized for the Disease
Area [*****], then BD shall grant, and does hereby grant, to Newco and TriPath
license rights under Becton Xxxxxxxxx Intellectual Property and license and/or
sublicense rights under any intellectual property controlled by BD and necessary
to commercialize Diagnostic Products and/or Pharmacogenomic Products for the
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Disease Area [*****] in accordance with [*****]. Such license and/or sublicense
rights shall be specified in an amendment to this Agreement to be prepared and
executed promptly [*****].
e. Third Party Pharmacogenomic Products. To the extent
that BD grants sublicense rights to Newco and TriPath pursuant to Section 2.1(c)
of the Newco Sublicense Agreement, BD shall grant, and does hereby grant,
license rights to each of Newco and TriPath under Becton Xxxxxxxxx Intellectual
Property for Third Party Pharmacogenomic Products that are commensurate in scope
with the sublicense rights granted pursuant to Section 2.1(c) of the Newco
Sublicense Agreement. Such license rights shall be specified in an amendment to
this Agreement (including without limitation an appropriate amendment to Section
4.2) to be prepared and executed promptly following BD's obtainment of
commercialization rights relating to Third Party Pharmacogenomic Products in
accordance with the BD/MPI Collaboration Agreement.
f. Sublicense Rights Procedure. If Newco, in its sole
discretion, determines that it would be advantageous to grant a sublicense of
any of the rights sublicensed to Newco in the Newco Sublicense Agreement to
secure access to technological or commercialization resources or expertise
useful for the development or commercialization of a Program Product, it shall
notify the BD/Newco Joint Steering Committee, including in such notice the scope
of the proposed sublicense and the names of any proposed sublicensees, [*****].
g. Royalties to Third Parties. Notwithstanding anything
contained in Sections 3.1(a) and (b) to the contrary, in the event that BD owes
a royalty to a third party on the sale by Newco or TriPath or their respective
sublicensees of products covered by Becton Xxxxxxxxx Intellectual Property, BD
shall notify Newco and TriPath of such royalty obligation as soon as practicable
(and, in any event, no later than 30 days after the execution of the agreement
with such third party giving rise to such royalty obligation), including in such
notice the pertinent details of the royalty obligation. [*****] or their
respective sublicensees, as the case may be, or (B) [*****].
h. Further License Grants. In the event that it is
determined that Newco and/or TriPath shall have development rights,
commercialization rights and/or responsibilities with respect to any Program
Diagnostic Product which is a Screening Product and Newco and/or TriPath
require(s) additional license rights under the Becton Xxxxxxxxx Intellectual
Property with respect thereto, BD hereby agrees to grant to Newco and/or TriPath
a non-exclusive, royalty-free right and license in the Territory, [*****], under
the Becton Xxxxxxxxx Intellectual Property to exercise such commercialization
rights and perform such responsibilities.
Section 3.2 TriPath Grants.
a. Research Licenses. TriPath hereby grants to Newco,
[*****] right and license in the Territory, [*****], under the TriPath Program
Intellectual Property, to (i) make and use Program Candidate Markers and Program
Validated Markers in the course of the Research Program [*****] for Newco to
undertake BD's responsibilities as set forth in the Research Plan and (ii) make
and use Program Validated Markers in the course of the
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Development Program [*****] for Newco to undertake BD's responsibilities as set
forth in the Development Program.
b. Product Commercialization Licenses.
(i) TriPath hereby grants to Newco [*****] right
and license in the Territory, [*****] under the TriPath Program Intellectual
Property, to make and use (A) any Program Diagnostic Product that has not
received FDA Approval for the purpose of Newco providing Reference Laboratory
Services inside any Exclusive Non-Colon Product Area, and (B) any Program
Diagnostic Product that has not received FDA Approval and that contains a
Program Validated Marker controlled by a Party that was developed for an
Exclusive Non-Colon Product Area for the purpose of Newco providing Reference
Laboratory Services inside the Disease Area that includes such Exclusive
Non-Colon Product Area.
(ii) TriPath hereby grants to Newco [*****]right
and license in the Territory, [*****], under the TriPath Program Intellectual
Property, to make and use any Program Pharmacogenomic Product that has not
received FDA Approval for the purpose of Newco providing Reference Laboratory
Services to address any Co-Exclusive Non-Colon Pharmacogenomic Product
Opportunity.
(iii) TriPath hereby grants to each of Newco and
BD [*****] right and license in the Territory, [*****], under the TriPath
Program Intellectual Property, to make and use (A) any Program Diagnostic
Product that has received FDA Approval for the purpose of Newco and BD providing
Reference Laboratory Services inside any Exclusive Non-Colon Product Area, and
(B) any Program Diagnostic Product that contains a Program Validated Marker
controlled by a Party that was developed for an Exclusive Non-Colon Product Area
for the purpose of Newco and BD providing Reference Laboratory Services inside
the Disease Area that includes such Exclusive Non-Colon Product Area.
(iv) TriPath hereby grants to each of Newco and
BD [*****] right and license in the Territory, [*****], under the TriPath
Program Intellectual Property, to make and use any Program Pharmacogenomic
Product that has received FDA Approval for the purpose Newco and BD providing
Reference Laboratory Services to address any Co-Exclusive Non-Colon
Pharmacogenomic Product Opportunity.
(v) TriPath hereby grants to each of Newco and
BD a [*****] right and license in the Territory, [*****] under the TriPath
Program Intellectual Property, to make, use, import, offer to sell and sell (A)
any Program Diagnostic Product that is a Staging Product that has received FDA
Approval inside any Exclusive Non-Colon Product Area, and (B) any Program
Diagnostic Product that is a Staging Product that has received FDA Approval and
that contains a Program Validated Marker controlled by a Party that was
developed for a Screening Product in an Exclusive Non-Colon Product Area inside
the Disease Area that includes such Exclusive Non-Colon Product Area.
(vi) TriPath hereby grants to each of Newco and
BD [*****] right and license in the Territory, [*****] under the TriPath Program
Intellectual Property, to make, use,
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import, offer to sell and sell any Program Pharmacogenomic Product that has
received FDA Approval to address any Co-Exclusive Non-Colon Pharmacogenomic
Product Opportunity.
(vii) TriPath hereby grants to each of Newco and
BD [*****] right and license in the Territory, [*****], under the TriPath
Intellectual Property to make, use, import, offer to sell and sell any Program
Diagnostic Product that is a Screening Product and that has received FDA
Approval inside any Exclusive Non-Colon Product Area within the Disease Area
[*****], and (B) any Program Diagnostic Product that is a Screening Product for
the Disease Area [*****] that has received FDA Approval and that contains a
Program Validated Marker controlled by a Party that was developed for a Staging
Product in an Exclusive Non-Colon Product Area inside the Disease Area [*****].
(viii) TriPath hereby grants to each of Newco and
BD [*****] right and license in the Territory, [*****] under the TriPath Program
Intellectual Property, to make, use, import, offer to sell and sell:
(A) any Program Diagnostic Product that is a
Staging Product [*****] and as an Analyte Specific Reagent ("ASR") product
inside any Exclusive Non-Colon Product Area, (B) any Program Diagnostic Product
that is a Staging Product [*****] and that contains a Program Validated Marker
controlled by a Party that was developed for an Exclusive Non-Colon Product Area
as a [*****] and as an ASR product inside the Disease Area that includes such
Exclusive Non-Colon Product Area, (C) any Program Diagnostic Product that is a
Screening Product [*****] and as an ASR product inside any Exclusive Non-Colon
Product Area within the Disease Area [*****], and (D) any Program Diagnostic
Product that is a Screening Product [*****] that contains a Program Validated
Marker controlled by a Party that was developed for a Staging Product as a
[*****] and as an ASR product inside any Exclusive Non-Colon Product Area within
the Disease Area [*****].
(ix) TriPath hereby grants to each of Newco and
BD [*****] and license in the Territory, without the right to grant sublicenses,
under the TriPath Program Intellectual Property, to make, use, import, offer to
sell and sell any Program Pharmacogenomic Product [*****] and as an ASR product
to address any Co-Exclusive Non-Colon Pharmacogenomic Product Opportunity.
c. Research Use License Relating to [*****]. TriPath
hereby grants to Newco, a worldwide, [*****] right and license, [*****], under
TriPath Program Intellectual Property to make and use Markers to (i) discover
and develop Validated Markers relevant to the Disease Area [*****] and (ii)
develop, but not to sell or otherwise commercially exploit, Diagnostic Products
for use in the human disease [*****].
d. Commercialization Rights Relating [*****]. If [*****]
determines that Diagnostic Products and/or Pharmacogenomic Products will be
developed and commercialized for the Disease Area [*****], then TriPath shall
grant, and does hereby grant, to each of Newco and BD license rights under
TriPath Program Intellectual Property necessary to commercialize
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Diagnostic Products and/or Pharmacogenomic Products for the Disease Area
[*****]. Such license rights shall be specified in an amendment to this
Agreement to be prepared and executed promptly following such determination
[*****].
e. Third Party Pharmacogenomic Products. To the extent
that BD grants sublicense rights to Newco and TriPath pursuant to Section 2.1(c)
of the Newco Sublicense Agreement, TriPath shall grant, and does hereby grant,
(i) to Newco license rights under TriPath Program Intellectual Property for
Third Party Pharmacogenomic Products that are commensurate in scope with the
sublicense rights granted pursuant to Section 2.1(c) of the Newco Sublicense
Agreement, and (ii) to BD license rights under TriPath Program Intellectual
Property for Third Party Pharmacogenomic Products that are commensurate in scope
with the rights retained by BD from the grant of Section 2.1(c) of the Newco
Sublicense Agreement. Such license rights shall be specified in an amendment to
this Agreement to be prepared and executed promptly following BD's obtainment of
commercialization rights relating to Third Party Pharmacogenomic Products in
accordance with the BD/MPI Collaboration Agreement.
Section 3.3 Section 365(n) of the Bankruptcy Code. All rights and
licenses granted under or pursuant to any section of this Agreement are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(35A) of the Bankruptcy Code. The Parties shall retain and may fully
exercise all of their respective rights and elections under the Bankruptcy Code.
Upon the bankruptcy of any Party, the non-bankrupt Party shall further be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property, and such, if not already in its possession, shall be
promptly delivered to the non-bankrupt Party.
Article IV
Financial Provisions
Section 4.1 Milestone Payments. To the extent any milestones
payments become payable to MPI under Article IV of the BD/MPI Collaboration
Agreement, then (i) to the extent such milestone payment becomes payable as a
result of receipt of FDA Approval for a Program Product, such milestone payment
shall be made by [*****], and (ii) to the extent such milestone payment becomes
payable as a result of [*****], on the one hand, and/or [*****], on the other,
achieving a certain level of sales with respect to a Program Product, then
[*****]. In the event that pursuant to Section 2.4, a third party is granted
rights to commercialize any Program Product, [*****] shall determine how [*****]
in determining [*****] pursuant to this Section 4.1.
Section 4.2 Royalty Payments. In addition to any obligations of
BD under the BD/MPI Collaboration Agreement or of Newco or TriPath under the
Newco Sublicense Agreement, each of BD, TriPath and Newco shall pay to the other
royalties as follows:
a. Screening Products; Pharmacogenomic Products.
[*****]:
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i. by BD to Newco or TriPath with respect to each sale
of any Program Diagnostic Product that is a Screening Product
(including a Screening Product which is sold as an ASR or ROU), to each
sale of any Program Pharmacogenomic Product, or the provision of any
Reference Laboratory Services using any Program Diagnostic Product that
is a Screening Product which has received FDA Approval, by BD and its
Affiliates and sublicensees, and
ii. by Newco and TriPath to BD with respect to each sale
of any Program Diagnostic Product that is a Screening Product
(including a Screening Product which is sold as an ASR or ROU), each
sale of any Program Pharmacogenomic Product, or the provision of any
Reference Laboratory Services using any Program Diagnostic Product that
is a Screening Product which has received FDA Approval, by Newco,
TriPath and their respective Affiliates and sublicensees.
[*****].
Notwithstanding the foregoing, the Parties acknowledge and agree that
in the event that TriPath and Newco do not make any financial or other
contribution to the development of such Screening Product, Program
Pharmacogenomic Product or Reference Laboratory Service, Newco shall nonetheless
be entitled to a royalty from BD with respect to any Screening Product, Program
Pharmacogenomic Product or Reference Laboratory Service described in this
Section 4.2(a); provided, [*****].
b. Staging Products. With respect to (i) each sale of
any Program Diagnostic Product which is a Staging Product (including a Staging
Product which is sold as an ASR or ROU) which is covered by Newco Program
Intellectual Property or TriPath Program Intellectual Property by BD and its
Affiliates and sublicensees, BD shall pay to Newco or TriPath a royalty equal to
[*****] of the Net Sales for such Program Product and (ii) each sale of any
Program Diagnostic Product which is a Staging Product (including a Staging
Product which is sold as an ASR or ROU) by Newco, TriPath and their respective
Affiliates and sublicensees, Newco or TriPath, as the case may be, shall pay to
BD a royalty equal to [*****] of the Net Sales for such Staging Product; [*****]
(as defined below) of [*****] with respect to the Staging Product, then pursuant
to Section 4.2(d), [*****].
As used herein, the [*****] of a Party with respect to a Staging
Product shall mean [*****]. As used herein, the [*****] of a Party for a Staging
Product shall mean [*****]. As used herein, the [*****] of a Party for a Staging
Product shall mean [*****].
c. Reference Laboratory Services. With respect to the
provision of any Reference Laboratory Service by Newco and its Affiliates and
sublicensees to a third party using any Program Product which has received FDA
Approval as a Staging Product, Newco shall pay to BD a royalty equal to [*****]
of the Net Sales for such Reference Laboratory Service. With respect to the
provision of any Reference Laboratory Service by BD and its Affiliates and
sublicensees to a third party using any Program Product which has received FDA
Approval as a Staging Product and which is covered by Newco Program Intellectual
Property or TriPath Program Intellectual Property, BD shall pay to Newco or
TriPath a royalty equal to [*****] of the Net Sales for such Reference
Laboratory Service. It is understood and agreed that Newco shall not be
obligated to pay any royalty to BD with respect to the Net Sales relating to the
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provision of any Reference Laboratory Services to the extent such Net Sales
occur prior to obtaining FDA Approval for the Program Product used in providing
such Reference Laboratory Services.
d. Revision to Royalty Rates. At the beginning of each
Agreement Year, at the request of a Party, [*****] to sales by a Party of any
Staging Product or [*****], and (ii) also review any revise, if appropriate,
[*****]. In addition, in the event BD shall at any time [*****] any licenses
granted by BD hereunder pursuant to Sections 2.7 or 2.9 with respect to any
Exclusive Product Area or Co-Exclusive Pharmacogenomic Product Opportunity,
either for all purposes or only with respect to a Major Market, then [*****] (in
all instances or only in such Major Market, as applicable) with respect to sales
of any Program Product relating to such Product Area or product opportunity
[*****].
e. Sales by Third Parties. i. Notwithstanding anything
in this Section 4.2 to the contrary, and subject to clause (e)(ii) below, in the
event that pursuant to Section 2.4, a third party is granted rights by [*****],
no royalties shall be payable under this Section 4.2 by any Party with respect
to sales of the Program Product by such third party, it being the understanding
of the Parties, however, that the [*****] at the time such third party is
granted such rights, [*****].
ii. The Parties acknowledge and agree that in the event
that TriPath and Newco have not made any financial or other contribution to the
development of any Screening Product, then notwithstanding anything in clause
(e)(i) above to the contrary, Newco and TriPath, collectively, shall
receive[*****] of the amounts received by the Parties from such third party in
respect of any Screening Product commercialized by such third party.
Section 4.3 Length of Royalty Payments. The royalties payable
under this Article IV shall be paid for so long as a Party is selling a Program
Product or providing a Reference Laboratory Service.
Section 4.4 Royalties Payable Only Once. A Party's obligation to
pay royalties under Section 4.2 is imposed only once with respect to the same
unit of Program Product or Third Party Pharmacogenomic Product. Except as
specifically provided in this Agreement, there shall be [*****].
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Section 4.5 Royalty Reports and Accounting.
a. Royalty Reports; Royalty Payments. BD shall deliver
to Newco, and Newco and TriPath shall each deliver to BD, within sixty (60) days
after the end of each calendar quarter, reasonably detailed written accountings
of Net Sales on Program Products and Third Party Pharmacogenomic Products that
are subject to royalty payments for such calendar quarter. Such quarterly
reports shall indicate (i) gross sales and Net Sales on a product-by-product
basis, and (ii) the calculation of royalties from such Net Sales. When a Party
delivers such accounting to another Party, it shall also deliver all royalty
payments due under Section 4.2 to the other Party for the calendar quarter.
b. Audits. Each of BD, TriPath and Newco shall keep
complete and accurate records of the latest three (3) years relating to Net
Sales and Sections 4.2, 4.6, 4.7 and 4.8. For the sole purpose of verifying
royalties payable hereunder or verifying factual matters relating to any
determination to be made by the BD/Newco Joint Steering Committee pursuant to
Section 4.2 (including, without limitation, the conformity of any Party's cost
accounting methods and policies to U.S. GAAP), each of BD, TriPath and Newco
shall have the right annually, at such Party's expense, to retain an
independent, certified public accountant selected by such Party and reasonably
acceptable to the other Party, to review such records in the location(s) where
such records are maintained by the other Party upon reasonable notice and during
regular business hours and under obligations of strict confidence. If a review
reflects an underpayment of royalties to either BD or Newco, as the case may be,
such underpayment shall be promptly remitted by Newco or TriPath, or by BD, as
the case may be, to the other Party, together with interest calculated in the
manner provided in Section 4.6 below. If the underpayment is equal to or greater
than [*****] of the royalty amount that was otherwise due, the Party which
underpaid royalties agrees that it shall pay all of the costs of such review.
Section 4.6 Currency and Method of Payments; Late Payments. All
payments under this Agreement shall be made in United States dollars by transfer
to such bank account as BD or Newco may designate from time to time within no
more than thirty (30) days of invoice or when such payment is due in accordance
with the provisions of this Agreement. Any royalty payments due hereunder with
respect to sales outside of the United States shall be payable in U.S. Dollars;
provided, however, that if any payment on account of Net Sales is received by
BD, Newco or TriPath in a foreign currency, such amount shall be converted
monthly to United States funds at the rate published by Reuters on the last
Wednesday of the month in which Net Sales occurred (or such other publicly
available source as BD may subsequently utilize generally in its currency
accounting procedures, in which case BD shall provide notice to Newco and
TriPath promptly of any such change). Each of BD, TriPath and Newco shall pay
interest to the Party entitled to payment on the aggregate amount of any
payments that are not paid on or before the date such payments are due under
this Agreement at a rate per annum equal to the lesser of the [*****] for the
applicable period, or the highest rate permitted by applicable law, calculated
on the number of days such payment is delinquent. In the event any invoice
issued by a Party contains any terms which conflict with the terms of this
Agreement, the terms of this Agreement shall prevail.
Section 4.7 Tax Withholding. Each of BD, TriPath and Newco shall
use all reasonable and legal efforts to reduce tax withholding on payments made
to the other hereunder.
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Notwithstanding such efforts, if either BD, TriPath or Newco concludes that tax
withholdings under the laws of any country are required with respect to payments
to another Party, it shall withhold the required amount and pay it to the
appropriate governmental authority, and shall promptly provide the other Party
with original receipts or other evidence reasonably required and sufficient to
allow the other Party to document such tax withholdings adequately for purposes
of claiming foreign tax credits and similar benefits.
Section 4.8 Blocked Payments. In the event that, by reason of
applicable laws or regulations in any country, it becomes impossible or illegal
for BD, TriPath or Newco to transfer, or have transferred on its behalf,
royalties to another Party, such royalties shall be deposited in local currency
in the relevant country to the credit of the other Party in a recognized banking
institution designated by the other Party or, if none is designated by the other
Party within a period of thirty (30) days, in a recognized banking institution
selected by BD or Newco, as the case may be, and identified in a notice in
writing given to the other Party.
Article V
Intellectual Property Ownership, Protection and Related Matters
Section 5.1 Ownership and Treatment of Inventions.
a. Ownership of Newco Inventions. Newco shall
exclusively own all inventions made solely by its employees, agents and/or
consultants (or made solely by or jointly with BD's employees, agents and/or
consultants (including BD Gene Employees, as such term is defined in the
Transitional Services Agreement) performing services under Section 2.1 of the
Transitional Services Agreement) in the course of the Development Program
("Newco Inventions"). BD and TriPath shall take all actions reasonably necessary
to vest all right, title and interest in and to any and all Newco Inventions in
Newco, including, without limitation, executing all documents of assignment
related thereto with Newco.
b. Inventorship. The determination of inventorship shall
be made in accordance with relevant patent laws. In the event of a dispute
regarding inventorship, if the Parties are unable to resolve the dispute,
mutually acceptable independent patent counsel not regularly employed by any
Party shall resolve such dispute.
c. Treatment of Newco Inventions and Newco/MPI Joint
Inventions. All Newco Inventions will be subject to the provisions of Section
5.1(c) of the Newco Sublicense Agreement, and all Newco/MPI Joint Inventions
will be subject to Section 5.1(d) of the Newco Sublicense Agreement.
Section 5.2 Prosecution and Maintenance of Patent Rights.
a. Newco Inventions. Subject to Section 5.1(c) of the
Newco Sublicense Agreement, Newco shall have the exclusive right and option to
file and prosecute any patent applications and maintain any patents covering
Newco Inventions; provided, that in the event that Newco declines the option to
file and prosecute any such patent applications or maintain any such patents
covering any Newco Invention, it shall give BD reasonable notice to this effect
and thereafter BD may, upon written notice to Newco, file and prosecute such
patent applications and
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maintain such patents in Newco's name, all at BD's expense, and all such Newco
Inventions shall remain owned exclusively by Newco.
b. Costs and Expenses. Newco shall bear its own costs
and expenses in preparing, filing, prosecuting, maintaining and extending Newco
Program Patent Rights. In addition, (i) Newco shall[*****] , and (ii) [*****]
pursuant to Section 5.4(c) of the BD/MPI Collaboration Agreement.
c. Newco/MPI Joint Inventions. If, pursuant to Section
5.2(c) of the BD/MPI Collaboration Agreement, BD is the Party with the right to
file and prosecute patent applications and maintain patents covering Newco/MPI
Joint Inventions, then Newco may instruct BD to exercise its rights to file,
prosecute and maintain patent applications and patents, and if so instructed, BD
shall perform such filing, prosecution and maintenance only in accordance with
written instructions from Newco.
d. Cooperation. Each Party agrees to cooperate with the
other with respect to the filing, prosecution, maintenance and extension of
patents and patent applications pursuant to this Section 5.2, including, without
limitation, the execution of all such documents and instruments and the
performance of such acts as may be reasonably necessary in order to permit the
other Party to continue any filing, prosecution, maintenance or extension of
patents and patent applications that such Party has elected not to pursue, as
provided for in Section 5.2.
Section 5.3 Third Party Infringement.
a. Program Intellectual Property. If, pursuant to
Section 5.5(b) of the BD/MPI Collaboration Agreement, (i) BD is either (A) the
Responsible Party, or (B) the other Party when the Responsible Party has failed
to institute an infringement suit or take other appropriate action within the
time periods specified therein, and (ii) either (A) the Program Patent Right
being infringed is a Newco Program Patent Right or a Newco/MPI Joint Program
Patent Right or (B) the Program Know-How being used in an unauthorized manner is
Newco Program Know-How or Newco/MPI Joint Program Know-How, then Newco may
instruct BD to act as such Responsible Party or such other Party when the
Responsible Party has failed to act, and BD's activities in any such suit or
action under Section 5.5(b) of the BD/MPI Collaboration Agreement shall be in
accordance with written instructions from Newco.
x. Xxxxxx Xxxxxxxxx Non-Program Patent Rights.
i. Newco and BD each shall notify the other promptly in
writing if it becomes aware of any infringement or suspected infringement of any
Becton Xxxxxxxxx Non-Program Patent Rights in the Field (hereinafter "Infringing
Activity").
ii. BD shall have the sole right, but not the obligation,
to institute and pursue such legal proceedings or other action, as it, in its
sole discretion, deems appropriate to address such Infringing Activity, at its
expense, and shall [*****], in settlement or through a judgment, in all such
proceedings or action. However, if, within [*****] of receipt of a written
notice pursuant
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to Section 5.3(b)(i) from Newco, BD shall have failed to (i) file a complaint in
a court of competent jurisdiction alleging patent infringement, (ii) initiate
settlement and/or licensing discussions with the alleged infringer, or (iii)
reach a decision with Newco that infringement is not occurring or that no action
should be taken to xxxxx the Infringing Activity, then Newco shall have the
right, but not the obligation, to institute and pursue such legal proceedings or
other action, as it, in its sole discretion, deems appropriate to address such
Infringing Activity, at its expense, and shall [*****] , in settlement or
through a judgment, in all such proceedings or action.
Section 5.4 Claimed Invalidity.
a. Program Patent Rights. If a third party at any time asserts a
claim that any Program Patent Right is invalid or otherwise unenforceable,
whether as a defense in an infringement action or in an action brought against a
Party, the Parties shall address such claim in accordance with Section 5.6(d) of
the BD/MPI Collaboration Agreement, provided that, if (i) BD is the Party
responsible for responding to such claim as either the Responsible Party or the
other Party, and (ii) the Program Patent Right is a Newco Program Patent Right
or a TriPath Program Patent Right, then Newco may instruct BD to act as such
Party responsible for responding to the claim, and BD's activities in responding
to such claim under Section 5.6(d) of the BD/MPI Collaboration Agreement shall
be in accordance with written instructions from Newco.
x. Xxxxxx Xxxxxxxxx Non-Program Patent Rights. If a third party
at any time asserts a claim that any Becton Xxxxxxxxx Non-Program Patent Right
is invalid or otherwise unenforceable (an "Invalidity Claim"), whether as a
defense in an infringement action brought by Newco or BD pursuant to Section
5.3(b) or in any action brought against Newco or BD, the Parties shall cooperate
with each other in preparing and formulating a response to such Invalidity
Claim. The Party responsible for responding to such claim, at its sole expense,
shall be initially the Responsible Party, subject to the other Party's right, at
its sole expense, to assume responsibility if the Responsible Party elects not
to do so. Neither Party shall settle or compromise any Invalidity Claim without
the consent of the other Party, which consent shall not be unreasonably
withheld.
Article VI
Confidentiality
Section 6.1 Confidential Information. All Confidential
Information disclosed by a Party to another Party during the term of this
Agreement shall not be used by the receiving Party except in connection with the
activities contemplated by this Agreement, shall be maintained in confidence by
the receiving Party (except to the extent reasonably necessary for FDA Approval
or other regulatory approval of products developed by BD or Newco or any of
their respective Affiliates or sublicensees, or for the filing, prosecution and
maintenance of Patent Rights), and shall not otherwise be disclosed by the
receiving Party to any other person, firm, or agency, governmental or private,
without the prior written consent of the disclosing Party, except to the extent
that the Confidential Information (as determined by competent documentation):
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a. was known or used by the receiving Party prior to its
date of disclosure to the receiving Party; or
b. either before or after the date of the disclosure to
the receiving Party is lawfully disclosed to the receiving Party by sources
other than the disclosing Party rightfully in possession of the Confidential
Information and not bound by confidentiality obligations to the disclosing
party; or
c. either before or after the date of the disclosure to
the receiving Party is or becomes published or generally known to the public
(including information known to the public through the sale of products in the
ordinary course of business) through no breach hereof on the part of the
receiving Party or its sublicensees; or
d. is independently developed by or for the receiving
Party without reference to or reliance upon the Confidential Information; or
e. is required to be disclosed by the receiving Party to
comply with applicable laws, to defend or prosecute litigation or to comply with
governmental regulations; provided, that the receiving Party provides prior
written notice of such disclosure to the disclosing Party and takes reasonable
and lawful actions to avoid and/or minimize the degree of such disclosure.
Section 6.2 Disclosure of Provisions of Agreements.
a. Each Party agrees to hold as confidential the terms
of this Agreement except that each Party shall have the right to disclose such
terms to potential investors and other third parties in connection with
financing activities, provided that any such third party has entered into a
written obligation with the disclosing Party to treat such information and
materials as confidential. At the request of the other Party, the disclosing
Party shall use commercially reasonable efforts to enforce such obligations
against such third parties.
b. In the event that this Agreement shall be included in
any report, statement or other document filed by any Party or an Affiliate of
any Party with the SEC, such Party inform the other Parties to that effect a
reasonable time prior to such filing, shall use, or shall cause its Affiliate,
as the case may be, to use, reasonable efforts to obtain confidential treatment
from the SEC of any financial information or other information of a competitive
or confidential nature, and shall include in such confidentiality request such
provisions of this Agreement as may be reasonably requested by the other Party.
Section 6.3 Employee and Advisor Obligations. BD, TriPath and
Newco each agree that they shall provide Confidential Information received from
the other Party only to their respective employees, consultants and advisors,
and to the employees, consultants and advisors of such Party's Affiliates, who
have a need to know, provided that such employees, consultants and advisors
agree to treat such information and materials as confidential.
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Section 6.4 Term. All obligations of confidentiality imposed
under this Article VI shall expire [*****] years following termination or
expiration of this Agreement.
Section 6.5 Publications. The Parties acknowledge that scientific
lead time is a key element of the value of the Research Program and further
agree that scientific publications must be strictly monitored to prevent any
adverse effect of the premature publication of results of the Research Program
and the Development Program. The Parties shall establish a procedure for
publication review and approval and each Party shall first submit to the other
Parties an early draft of all such publications, whether they are to be
presented orally or in written form, at least [*****] prior to presentation or
submission for publication. Each Party shall review each such proposed
publication in order to avoid the unauthorized disclosure of a Party's
Confidential Information and to preserve the patentability of inventions arising
from the Research Program and the Development Program. If, as soon as reasonably
possible but no longer than [*****] following receipt of an advance copy of a
Party's proposed publication, the other Party informs such Party that its
proposed publication contains Confidential Information of the other Party, then
such Party shall delete such Confidential Information from its proposed
publication. If, as soon as reasonably possible but no longer than [*****]
following receipt of an advance copy of a Party's proposed publication, the
other Party informs such Party that its proposed publication could be expected
to have a material adverse effect on any Patent Rights or Know-How of such other
Party, then such Party shall delay such proposed publication, for up to [*****]
from the date the other Party informed such Party of its objection to the
proposed publication, to permit the timely preparation and first filing of
patent application(s) on the information involved. The Parties agree that all
publications of results of the Research Program shall acknowledge the
contribution of the other Parties and third party collaborators to such results.
Article VII
Employees; Transition
Section 7.1 [*****]. Newco [*****] employment to those employees
of BD working in the BD Gene business unit of BD ("BD Gene"). Exhibit B sets
forth a list of such employees. Newco [*****] be (i) for positions with
responsibilities which are comparable to the responsibilities of such employees
in their current position with BD Gene, and (ii) [*****]. Such [*****] Newco not
later than thirty (30) days following the Effective Date. Newco agrees that to
the extent any BD employees [*****], Newco [*****] persons until at least
[*****] of the Effective Date, except for terminations of employment for cause
under applicable Newco or TriPath policies. BD will use reasonable efforts to
facilitate the transfer of such employees to Newco. Newco acknowledges and
agrees that BD makes no assurances or other representations as to the extent to
which any such [*****] BD employees.
Section 7.2 Transition Services. Following the Effective Date, BD
shall provide certain transitional services to Newco as set forth in the
Transitional Services Agreement.
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Article VIII
Representations, Warranties and Covenants
Section 8.1 Representations of Authority. BD, TriPath and Newco
each represents and warrants to the other that as of the date hereof and the
Effective Date, it has full right, power and authority to enter into this
Agreement and to perform its respective obligations under this Agreement. BD,
TriPath and Newco each represents and warrants to the other that it has the
right to grant the licenses and sublicenses granted pursuant to this Agreement,
and that, to the best of its knowledge, it has, as of the date hereof and the
Effective Date, access to and the right to use its Know-How necessary to perform
its obligations hereunder. BD, TriPath and Newco each represents and warrants
that (a) the execution, delivery and performance by it of this Agreement, and
the consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action, and (b) this Agreement has been
duly executed and delivered by it and constitutes a valid and binding obligation
of it, enforceable in accordance with its terms.
Section 8.2 Consents. BD, TriPath and Newco each represents and
warrants that all necessary consents, approvals and authorizations of all
government authorities and other persons required to be obtained by such Party
in connection with the execution, delivery and performance of this Agreement
have been obtained.
Section 8.3 No Conflict. BD, TriPath and Newco each represents
and warrants that the execution and delivery of this Agreement, and the
performance of such Party's obligations hereunder (including, with respect to
Newco, the conduct of the Development Program by it) (a) do not conflict with or
violate any requirement of applicable laws or regulations and (b) do not and
shall not conflict with, violate or breach, or constitute a default (with or
without the giving of notice or lapse of time, or both) or require any consent
under, any contractual obligations of such Party or any order, judgment or
decree to which such Party or any of its assets are bound, except such consents
as shall have been obtained prior to the date hereof or the Effective Date.
Section 8.4 Employee Obligations. Each Party represents and
warrants that all of its employees, officers, consultants and advisors who are
or will be involved in the Research Program and Development Program have
executed or will have executed agreements or have existing obligations under law
requiring assignment to such Party of all intellectual property made during the
course of and as the result of their association with such Party, and obligating
the individual to maintain as confidential any Confidential Information, to the
extent required to support such Party's obligations under this Agreement. Each
Party represents and warrants that to its knowledge, none of its employees who
are or will be involved in the Research Program and Development Program are, as
a result of the nature of such programs, in violation of any covenant in any
contract with a third party relating to non-disclosure of proprietary
information, non-competition or non-solicitation.
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Section 8.5 Third Party Rights.
a. To the knowledge of TriPath and Newco, the
performance of Newco's obligations hereunder and the practice by BD under the
rights and licenses granted by Newco herein does not and shall not knowingly
infringe or conflict with the rights of any third party in respect of Know-How
or issued patents or published patent applications owned by such third party. To
the knowledge of TriPath and Newco, as of the date hereof and as of the
Effective Date, none of the Know-How or Patent Rights owned, controlled or used
by Newco that is expected to be utilized by Newco in the Research Program or
Development Program is being infringed by any third party. As of the date hereof
and as of the Effective Date, there is no claim or demand of any person
pertaining to, or any proceeding which is pending or, to the knowledge of
TriPath or Newco, threatened, that challenges the rights of TriPath or Newco in
respect of Know-How or Patent Rights owned, controlled or used by Newco.
b. To the knowledge of BD, as of the date hereof, the BD
Intellectual Property does not infringe or conflict with the rights of any third
party in respect of Know-How or issued patents or published patent applications
owned by such third party. To the knowledge of BD, as of the date hereof and as
of the Effective Date, none of the BD Intellectual Property owned, controlled or
used by BD that is expected to be utilized by Newco in the Development Program
is being infringed by any third party. As of the date hereof and as of the
Effective Date, there is no claim or demand of any person pertaining to, or any
proceeding which is pending or, to the knowledge of BD, threatened, that
challenges the rights of BD in respect of the BD Intellectual Property.
c. TriPath and Newco represents and warrants that, as of
the date hereof, Newco owns, free and clear of all encumbrances, or to the
knowledge of Newco, has the valid right to use, all Know-How and Patent Rights
owned, controlled or used by Newco that are expected to be utilized by Newco in
the Research Program and Development Program. To the knowledge of Newco, as of
the date hereof, no person or entity has any rights to any of the Know-How or
Patent Rights owned, controlled or used by Newco and expected to be utilized by
Newco in the Research Program that would limit Newco in the conduct of the
Research Program or BD in the practice of its rights and licenses granted by
Newco herein.
d. BD represents and warrants that, as of the Date
hereof, it owns, free and clear of all encumbrances, or to the knowledge of BD,
has the valid right to use, all BD Intellectual Property owned, controlled or
used by BD.
e. TriPath, Newco and BD each represents and warrants
that (i) it has taken reasonable precautions (A) to protect its rights in its
Know-How and Patent Rights to which it has granted a license herein ("Licensed
Intellectual Property") and (B) to maintain the confidentiality of its
confidential Licensed Intellectual Property, and (ii) to its knowledge, there
have been no acts or omissions (other than those made based on reasonable, good
faith business decisions) by its officers, directors, shareholders and
employees, the result of which would be to materially compromise its rights to
apply for or enforce appropriate legal protection of its Licensed Intellectual
Property.
Section 8.6 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO
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WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT PROGRAM
PRODUCTS OR THIRD PARTY PHARMACOGENOMIC PRODUCTS WILL BE SUCCESSFULLY DEVELOPED
HEREUNDER, AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY OR MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
Section 8.7 Additional TriPath and Newco Representations and
Covenants. TriPath represents and warrants that, as of the Effective Date, all
of the issued and outstanding capital stock of Newco is owned of record and
beneficially by TriPath, free of any encumbrance. TriPath covenants that it will
provide Newco with, or otherwise cause Newco to maintain or obtain access to,
such equipment, funds, personnel and other resources as may be required to
enable Newco to fulfill its obligations hereunder. TriPath and Newco each
further covenant that it shall not, without the prior consent of BD, which
consent shall not be unreasonably withheld, enter into any transaction or series
of transactions (including, without limitation, the issuance of securities of
Newco) that would [*****] . In the event that TriPath and/or Newco seeks the
consent of BD with respect to [*****], it shall so notify BD in writing and BD
shall have thirty (30) days to grant or deny such consent in writing. In the
event BD does not respond in writing within such thirty (30) days, BD's consent
shall be deemed granted for purposes herein.
Section 8.8 Additional BD Covenants. BD:
(a) represents and warrants that, as of the date hereof,
the BD/MPI Collaboration is in full force and effect and that, to the best of
its knowledge, it has not failed to meet any of its obligations under such
agreement and is not in breach of such agreement.
(b) covenants that it will use its best efforts not to
breach any of its obligations under the BD/MPI Collaboration Agreement, and
shall not terminate the BD/MPI Collaboration Agreement, or make any amendment to
or make any elections or decisions under the BD/MPI Collaboration Agreement
which would adversely affect Newco or TriPath's rights hereunder or increase
Newco or TriPath's obligations hereunder, without the prior written consent of
the BD/Newco Joint Steering Committee.
(c) covenants that it will notify Newco promptly, but in
no event later than seventy-two (72) hours, after receiving any notice from MPI
with respect to any failure by BD or Newco to meet any of its obligations under
the BD/MPI Collaboration Agreement, including, without limitation, any diligence
obligations.
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Article IX
Term and Termination
Section 9.1 Term. This Agreement shall become effective as of the
date hereof and may be terminated as set forth in this Article IX or as
elsewhere set forth in this Agreement.
Section 9.2 Survival of Licenses.
a. Licenses to BD. Upon the expiration of all Patent
Rights of the Newco Program Intellectual Property, the licenses to BD under
Newco Program Patent Rights set forth in Section 2.2(c) of the Newco Sublicense
Agreement shall be deemed to be perpetual, fully paid up, non-exclusive licenses
with respect to all Program Products and Third Party Pharmacogenomic Products.
Upon the expiration of all Patent Rights of the TriPath Program Intellectual
Property, the licenses to BD under TriPath Program Patent Rights set forth in
Section 3.2 of this Agreement shall be deemed to be perpetual, fully paid-up,
non-exclusive licenses with respect to all Program Products and Third Party
Pharmacogenomic Products.
b. Licenses to Newco. Upon the expiration of all Patent
Rights of the Becton Xxxxxxxxx Intellectual Property, the licenses to Newco
under Becton Xxxxxxxxx Program Patent Rights and Becton Xxxxxxxxx Non-Program
Patent Rights set forth in Section 3.1 that have not previously been terminated
in accordance with Section 2.7, Section 2.9 or Section 9.4(b)(i) shall be deemed
to be perpetual, fully paid-up, non-exclusive licenses with respect to all
Program Products and Third Party Pharmacogenomic Products.
c. Licenses to TriPath. Upon the expiration of all
Patent Rights of the Becton Xxxxxxxxx Intellectual Property, the licenses to
TriPath under Becton Xxxxxxxxx Program Patent Rights and Becton Xxxxxxxxx
Non-Program Patent Rights set forth in Section 3.1 that have not previously been
terminated in accordance with Section 2.7, Section 2.9 or Section 9.4(b)(i)
shall be deemed to be perpetual, fully paid-up, non-exclusive licenses with
respect to all Program Products and Third Party Pharmacogenomic Products.
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Section 9.3 a. Termination For Material Breach. Upon any
material breach of a material provision of this Agreement by a Party (in such
capacity, the "Breaching Party"), BD (in the event that Newco or TriPath is the
Breaching Party) or Newco or TriPath (in the event BD is the Breaching Party)
(in such capacity, the "Non-Breaching Party") may terminate this Agreement by
providing [*****] written notice to the Breaching Party, specifying the material
breach. The termination shall become effective at the end of the[*****] period
unless (a) the Breaching Party cures such breach during such [*****] period, or
(b) if such breach is not susceptible to cure within [*****] of the receipt of
written notice of the breach, the Breaching Party is diligently pursuing a cure.
Notwithstanding the foregoing, if such breach, by its nature, is incurable, the
Agreement may be terminated immediately. The Parties shall use reasonable
efforts to work together to cure any breach. In the event of a dispute
concerning whether a material breach has occurred, the [*****] cure period
specified above shall be suspended during the period (not to exceed [*****])
commencing upon the submission of such dispute for resolution to the Executive
Officers and continuing until the earlier of the resolution of such dispute and
the end of such [*****] period.
b. Termination for Bankruptcy, Etc. This Agreement may
be terminated by BD in the event either TriPath or Newco, or by TriPath or Newco
in the event BD, (i)(A) institutes any proceeding or files a petition commencing
a voluntary case for the relief of debtors, or seeking liquidation, dissolution,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for any party hereto or for any substantial part of its property, (B) shall
admit in writing its inability to pay its debts generally, (C) shall make a
general assignment for the benefit of creditors, or (D) shall take any action to
authorize or effect any of the actions set forth above in this subsection; or
(ii) becomes the subject of any proceeding seeking to adjudicate it a bankrupt
or insolvent, or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian or
other similar official for the parties hereto or any substantial part of its
property, and either such proceeding shall remain undismissed or unstayed for a
period for a period of sixty (60) days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur.
Section 9.4 Effect of Termination.
a. General. In the event this Agreement is terminated by
a Party, all rights and obligations of the Parties, including performance of
work under the Development Program and Newco and TriPath's right to
commercialize and develop Program Products, shall cease, except as follows:
i. except as set forth in subsection b(i) or b(ii)
below, all licenses set forth in Sections 3.1 and 3.2 of this Agreement and
Section 2.2(c) of the Newco Sublicense Agreement shall survive such termination,
subject to continued compliance with the obligations
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related to such licenses, such as the royalty payments, reports, accounting and
auditing provisions of Article IV;
ii. all financial obligations under Article IV
owed as of, or which may come due under Section 4.1 hereof following, the
effective date of such termination shall remain effective and shall be timely
paid;
iii. the right to complete the manufacture and
sale of Program Products which qualify as "work in process" under generally
accepted cost accounting standards or which are in stock at the date of
termination, and the obligation to pay royalties on Net Sales of such Program
Products;
iv. obligations set forth in Article V;
v. obligations regarding confidentiality set
forth in Article VI;
vi. obligations of defense and indemnity set
forth in Section 12.1, and obligations under Section 12.2, which obligations
shall continue in full force and effect for an unlimited period;
vii. any cause of action or claim of Newco or BD
accrued or to accrue because of any breach or default by the other party
hereunder; and
viii. all other terms, provisions,
representations, rights and obligations contained in this Agreement which by
their sense and context are intended to survive termination of this Agreement.
b. Termination of Licenses.
i. If this Agreement is terminated under
Section 9.3(a) and Newco or TriPath is the Breaching Party, or by BD pursuant to
Section 9.3(b), the licenses granted by BD to Newco and TriPath under Section
3.1 shall terminate as of the effective date of such termination, and all
sublicenses granted to third parties by Newco pursuant to Section 3.1(f) shall
also terminate as of such date.
ii. If this Agreement is terminated under
Section 9.3(a) and BD is the Breaching Party, or by Newco or TriPath pursuant to
Section 9.3(b), the licenses granted by Newco to BD under Section 2.2(c) of the
Newco Sublicense Agreement and the licenses granted by TriPath to BD under
Section 3.2 of this Agreement shall terminate, and all sublicenses granted to
third parties by BD pursuant to Section 2.2(c) of the Newco Sublicense Agreement
and Section 3.2 of this Agreement shall also terminate as of such date.
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Article X
Dispute Resolution
Section 10.1 Alternative Dispute Resolution. Except as otherwise
provided herein, if any controversy, claim or dispute arising out of or relating
to this Agreement has not been resolved by the Executive Officers within [*****]
of referral in accordance with Section 2.1 or any other applicable provisions of
this Agreement, or if the Executive Officers fail to meet within such [*****],
then either BD or Newco may initiate an Alternative Dispute Resolution ("ADR")
proceeding as provided in Exhibit C hereto. The Parties shall have the right to
be represented by counsel in such a proceeding.
Section 10.2 No Limitation. Notwithstanding the foregoing, nothing
in this Article X shall be construed as limiting in any way the right of a Party
to bring suit with respect to any matter relating to this Agreement or to seek
injunctive or other equitable relief from a court of competent jurisdiction with
respect to any actual or threatened breach of this Agreement.
Article XI
Conditions
Section 11.1 Conditions to TriPath and Newco's Obligations. The
obligations of TriPath and Newco hereunder shall be subject to the satisfaction
of the following conditions:
a. The execution and delivery by BD of the Transitional
Services Agreement;
b. The execution and delivery by BD and MPI of the Newco
Sublicense Agreement;
c. The approval of Newco and TriPath as [*****] pursuant
to the BD/MPI Collaboration Agreement; and
d. The execution and delivery by BD of the TriPath
License Agreement.
Section 11.2 Conditions to BD's Obligations. The obligations of BD
hereunder shall be subject to the satisfaction of the following conditions:
a. The approval of Newco and TriPath as [*****] pursuant
to the BD/MPI Collaboration Agreement;
b. The execution and delivery by Newco, TriPath and MPI
of the Newco Sublicense Agreement;
c. The execution and delivery by TriPath and Newco of
the Transitional Services Agreement; and
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d. The execution and delivery by TriPath of the TriPath
License Agreement.
Article XII
Miscellaneous Provisions
Section 12.1 Indemnification.
a. BD. BD agrees to defend Newco, TriPath and their
Affiliates at its cost and expense, and shall indemnify and hold Newco, TriPath
and their Affiliates and their respective directors, officers, employees and
agents (the "Newco Indemnified Parties") harmless from and against any losses,
costs, damages, fees or expenses arising out of any claim relating to (i) any
breach by BD of any of its representations, warranties, covenants, or
obligations pursuant to this Agreement or (ii) the negligent or wrongful acts of
BD. In the event of any such claim against the Newco Indemnified Parties by any
third party, Newco shall promptly notify BD in writing of the claim and BD shall
manage and control, at its sole expense, the defense of the claim and its
settlement. The Newco Indemnified Parties shall cooperate with BD and may, at
their option and expense, be represented in any such action or proceeding. BD
shall not be liable for any litigation costs or expenses incurred by the Newco
Indemnified Parties. In addition, BD shall not be responsible for the
indemnification of any Newco Indemnified Party for losses, costs, damages, fees
or expenses arising from any negligent or wrongful acts by such party, or as the
result of any settlement or compromise by the Newco Indemnified Parties without
BD's prior written consent.
b. Newco and TriPath. Newco and TriPath agree, jointly
and severally, to defend BD and its Affiliates at Newco's and TriPath's cost and
expense, and shall indemnify and hold BD and its Affiliates and their respective
directors, officers, employees and agents (the "BD Indemnified Parties")
harmless from and against any losses, costs, damages, fees or expenses arising
out of any claim relating to (i) any breach by Newco or TriPath of any of its
representations, warranties, covenants, or obligations pursuant to this
Agreement or (ii) the negligent or wrongful acts of Newco or TriPath. In the
event of any claim against BD Indemnified Parties by any third party, BD shall
promptly notify Newco or TriPath, as the case may be, in writing of the claim
and such Party shall manage and control, at its sole expense, the defense of the
claim and its settlement. The BD Indemnified Parties shall cooperate with such
Party and may, at their option and expense, be represented in any such action or
proceeding. Neither Newco nor TriPath shall be liable for any litigation costs
or expenses incurred by BD Indemnified Parties. In addition, neither Newco nor
TriPath shall be responsible for the indemnification of any BD Indemnified Party
for losses, costs, damages, fees or expenses arising from any negligent or
wrongful acts by such party, or as the result of any settlement or compromise by
BD Indemnified Parties without the prior written consent of Newco or TriPath, as
the case may be.
Section 12.2 Guaranty. TriPath hereby unconditionally guarantees
the obligations and liabilities of Newco under this Agreement and the Newco
Sublicense Agreement. TriPath hereby acknowledges and agrees that (i) Newco and
BD may amend or modify this Agreement, the Transitional Services Agreement or
the Newco Sublicense Agreement (excluding any
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modification of any of TriPath's representations, warranties or covenants
contained herein or therein) [*****] and (ii) BD shall be entitled to interact
and deal with Newco on all matters relating to this Agreement, the Transitional
Services Agreement and the Newco Sublicense Agreement (and any modifications or
amendments hereto) without regard to the guaranty made by TriPath hereunder, and
that in each such case, the obligations and liabilities of TriPath under this
guaranty shall not be released or otherwise affected or impaired as a result
thereof.
Section 12.3 Performance by BD. In the event Newco shall fail to
timely perform any obligation owed to BD hereunder, BD may (but shall have no
obligation to) perform such obligation on Newco's behalf, and Newco shall
[*****] BD in performing such obligation.
Section 12.4 Governing Law. This Agreement shall be construed and
the respective rights of the Parties determined (including in any arbitration
proceeding under Article X) according to the substantive laws of the State of
Delaware, notwithstanding the provisions governing conflict of laws under such
Delaware law to the contrary and without giving effect to the United Nations
Convention on Contracts for the International Sale of Goods, the 1974 Convention
on the Limitation Period in the International Sale of Goods (the "1974
Convention") and the Protocol amending the 1974 Convention, done at Vienna April
11, 1980, except matters of intellectual property law which shall be determined
in accordance with the national intellectual property laws relevant to the
intellectual property in question.
Section 12.5 Assignment. Neither TriPath, Newco nor BD may assign
this Agreement in whole or in part without the consent of the other Parties,
which consent shall not be unreasonably withheld or delayed, provided, however,
that subject to Section 8.7, any Party may assign this Agreement without the
consent of the other Party if such assignment is in connection with a Change of
Control.
Section 12.6 Amendments. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof, and
supersedes all previous arrangements with respect to the subject matter hereof,
whether written or oral. Any amendment or modification to this Agreement shall
be made in writing signed by both BD and Newco, except that any amendment or
modification relating to any representation, warranty or covenant of TriPath
(including without limitation Sections 3.2 or 12.2 of this Agreement) shall
require a writing signed by all of the Parties.
Section 12.7 Notices.
Notices to BD shall be addressed to:
Becton, Xxxxxxxxx and Company
Xxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
Telecopy No: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
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with a copy to:
Becton, Xxxxxxxxx and Company
0 Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
Telecopy No.: 000-000-0000
Attn: General Counsel
Notices to Newco shall be addressed to:
TriPath Oncology, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: 000-000-0000
Attn: President
with a copy to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy No.: 1-617-227-4420
(after 11/01/01: 000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 02115)
Notices to TriPath shall be addressed to:
TriPath Imaging, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: 000-000-0000
Attn: President
with a copy to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy No.: 1-617-227-4420
(after 11/01/01: 000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 02115)
Any Party may change its address by giving notice to the other Party in
the manner herein provided. Any notice required or provided for by the terms of
this Agreement shall be in writing and shall be (a) sent by registered or
certified mail, return receipt requested, postage prepaid, (b) sent via a
reputable overnight courier service, or (c) sent by facsimile transmission with
an
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original to be followed the same day via a reputable overnight courier service,
in each case properly addressed in accordance with the paragraph above. The
effective date of notice shall be the actual date of receipt by the Party
receiving the same.
Section 12.8 Force Majeure. No failure or omission by the Parties
in the performance of any obligation of this Agreement shall be deemed a breach
of this Agreement or create any liability if the same shall arise from any cause
or causes beyond the control of the Parties, including, but not limited to, the
following: acts of God; acts or omissions of any government; any rules,
regulations or orders issued after the Effective Date by any governmental
authority or by any officer, department, agency or instrumentality thereof;
fire; storm; flood; earthquake; accident; war; rebellion; insurrection; riot;
and invasion and provided that such failure or omission resulting from one of
the above causes is cured as soon as is practicable after the occurrence of one
or more of the above-mentioned causes.
Section 12.9 Public Announcements. Any announcements or similar
publicity with respect to the execution of this Agreement shall be agreed upon
among the Parties in advance of such announcement as set forth herein. Any Party
may make such public announcements with respect hereto. The Parties agree that
any such announcement shall not contain Confidential Information and, if
disclosure of Confidential Information is required by law or regulation, shall
make reasonable efforts to minimize such disclosure and obtain confidential
treatment for any such information which is disclosed to a governmental agency
or group. Each Party agrees to provide the other Parties with a copy of any
public announcement as soon as reasonably practicable under the circumstances
prior to its scheduled release. Except under extraordinary circumstances, each
Party shall provide the others with an advance copy of any public announcement
at least [*****] prior to the scheduled disclosure. Each Party shall have the
right to expeditiously review and recommend changes to any announcement
regarding this Agreement, or the subject matter hereof or thereof, provided that
such right of review and recommendation shall only apply for the first time that
specific information is to be disclosed, and shall not apply to the subsequent
disclosure of substantially similar information that has previously been
disclosed. Except as otherwise required by law, the Party whose public
announcement has been reviewed shall remove or revise any information the
reviewing Party reasonably deems to be inappropriate for disclosure.
Section 12.10 Independent Contractors. It is understood and agreed
that the relationship between the Parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for any Party to act as agent for the others. The Development
Program Directors shall remain employees of BD or Newco, as the case may be.
Section 12.11 No Strict Construction. This Agreement has been
prepared jointly and shall not be strictly construed against any Party.
Section 12.12 Headings. The captions or headings of the sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
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Section 12.13 No Implied Waivers; Rights Cumulative. No failure on
the part of Newco or BD to exercise, and no delay in exercising, any right,
power, remedy or privilege under this Agreement, or provided by statute or at
law or in equity or otherwise, shall impair, prejudice or constitute a waiver of
any such right, power, remedy or privilege or be construed as a waiver of any
breach of this Agreement or as an acquiescence therein, nor shall any single or
partial exercise of any such right, power, remedy or privilege preclude any
other or further exercise thereof or the exercise of any other right, power,
remedy or privilege.
Section 12.14 Severability. If any provision hereof should be held
invalid, illegal or unenforceable in any respect in any jurisdiction, then, to
the fullest extent permitted by law, (a) all other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in order to carry out the intentions of the Parties as nearly as may
be possible and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction.
Section 12.15 Execution in Counterparts. This Agreement may be
executed in counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
Section 12.16 No Consequential Damages. In no event shall a Party
be liable to any other Party for any special, consequential, indirect or
incidental damages or losses arising out of or in connection with this
Agreement, including without limitation, loss of profits or revenues, whether
such claim is based upon breach of contract, breach of warranty, negligence,
strict liability in tort or any other theory of relief or whether or not such
Party is informed in advance of the possibility of such damages or losses.
Section 12.17 No Third Party Beneficiaries. Neither this Agreement
nor any provision hereof nor any other document delivered pursuant hereto is
intended to create any right, claim or remedy in favor of any person or entity,
other than the Parties and their respective successors and permitted assigns.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
TRIPATH IMAGING, INC.
By: /s/ Xxxx X. Xxxxxx, M.D.
---------------------------------------------
Name: Xxxx X. Xxxxxx, M.D.
Title: President and Chief Executive Officer
TRIPATH ONCOLOGY, INC.
By: /s/ Xxxx X. Xxxxxx, M.D.
---------------------------------------------
Name: Xxxx X. Xxxxxx, M.D.
Title: President
BECTON, XXXXXXXXX AND COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Sr. Vice President- Technology, Strategy
and Development
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EXHIBIT A
DEVELOPMENT PLAN
[*****]
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EXHIBIT B
LIST OF EMPLOYEES
[*****]
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EXHIBIT C
ALTERNATIVE DISPUTE RESOLUTION PROCEDURES
[*****]
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