Exhibit 10.30
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80 (b)(4),
200.83 and 230.406
***Indicates omitted material that is the subject of a confidential
treatment request filed separately with the Commission.
SOLE COMMERCIAL PATENT LICENSE AGREEMENT
THIS AGREEMENT, made effective on the 15th day of June 1997, by and
between LOCKHEED XXXXXX ENERGY RESEARCH CORPORATION (hereinafter "LMER"), a
corporation organized and existing under the laws of the State of Delaware
and whose address for notices is Xxxx Xxxxxx Xxx 0000, Xxx Xxxxx, Xxxxxxxxx
00000-0000, and Gene Logic, Inc., (hereinafter "Licensee"), a corporation
organized and existing under the laws of the State of Delaware and whose
address for notices is 00000 Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000.
W I T N E S S:
A. LMER, pursuant to Xxxxxxxx Xx. XX-XX00-00XX00000 (hereinafter
"Prime Contract") with the United States Government, as represented by the
Department of Energy (hereinafter "DOE") has developed and/or obtained certain
Proprietary Rights relating to Products and Processes, subject to a
nonexclusive, nontransferable, irrevocable, paid-up license reserved by the DOE
for the United States Government (hereinafter Federal government) and certain
march-in rights and any other conditions of waivers granted by the DOE; and
B. Pursuant to that certain Option Agreement dated February 12, 1997
between Licensee and LMER, LMER has granted Licensee an option to enter into a
Sole Commercial Patent License Agreement to such Proprietary Rights; and
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C. Licensee desires to exercise the option granted under the Option
Agreement to obtain sole commercial rights under LMER's Proprietary Rights, as
hereinafter stated.
THEREFORE, in consideration of the foregoing premises, and their
respective covenants, undertakings and agreements contained herein, the parties
hereto agree to be bound as follows:
1. Definitions
1.1 "Proprietary Rights" shall mean LMER's patents and patent applications
listed in Exhibit A attached hereto and hereby incorporated into this Agreement
by reference and all the United States and corresponding foreign patents issuing
from such United States patent applications and corresponding patent
applications filed in foreign jurisdictions including all continuations,
continuations-in-part, substitutions, divisions, reissues, reexaminations and
temporal extensions of any of the foregoing.
1.2 "Products and Processes" shall mean any and all processes used and/or
products manufactured, used, sold, imported, or transferred by Licensee or
"Sublicensee(s)," covered by one or more claims of the Proprietary Rights
licensed hereunder.
1.3 "Net Sales" shall mean the total amounts invoiced to purchasers during the
accounting period in question for Products sold by Licensee less allowances for
returns and exchange of Products, bad debts, insurance, government charges,
discounts, rebates,
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commissions, freight, postage, insurance, transportation, and taxes on Products
and Processes. Net Sales in the case of Products used or transferred shall mean
the fair market value of Products as if they were sold to an unrelated third
party in similar quantities.
1.4 "Sublicensee" shall mean any third party to whom Licensee has granted a
sublicense.
1.5 "Sublicensing Revenue" shall mean the amount actually paid to Licensee by a
Sublicensee for the manufacture, use or sale of Products or the use or sale of a
Process, including any license fees, royalties and milestone payments or other
consideration.
2. Grants
2.1 Subject to the terms and conditions of this Agreement, LMER hereby grants to
Licensee the worldwide sole commercial right and license under the Proprietary
Rights to use, sell or offer for sale the Process and to manufacture, use, sell
or offer for sale the Products. This grant includes right to grant sublicenses
to others within the same scope and breadth of Licenseeis grant. Licensee agrees
to provide LMER a copy of each sublicense agreement for LMERis review and
approval of the terms and conditions therein prior to the execution thereof.
Such review and approval shall not be unreasonably withheld or delayed.
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2.2 LMER hereby agrees not to grant to any other party right and license to
Proprietary Rights in accordance with the grant hereinabove as long as Licensee
abides by the terms and conditions of this Agreement, unless required to so
grant such right and license in accordance with Federal Statutory or Regulatory
enactments conditioning the waiver of rights to LMER by the DOE, particularly as
set forth in 41 CFR 9-9.109-(6)i; 10 CFR Part 781; or 37 CFR Part 404.
2.3 Licensee agrees that any Products for use or sale in the United States shall
be manufactured substantially in the United States.
2.4 Licensee agrees to affix appropriate markings (for example, "Licensed Patent
Pending", or "Patent Pending, Licensed from Lockheed Xxxxxx Energy Research
Corporation") of the applicable LMER Proprietary Rights (and the fact that LMER
was the source of these rights) upon or in association with Licensee's licensed
Products and Processes or services and Licensee agrees to use its best efforts
to follow any guidance concerning marking of its licensed Products and Processes
which LMER may hereafter render and to assure that all those under Licensee's
control also xxxx the licensed Product or Process appropriately.
3. Royalties And Commercialization Plan
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3.1 In consideration of the rights and licenses granted herein, Licensee agrees
to the provisions of Exhibit B1, Exhibit B2 and Exhibit C attached hereto and
hereby incorporated into this Agreement by reference.
3.2 No royalties shall be owing on any Processes used or Products produced for
or under any Federal governmental agency contract pursuant to the DOE
nonexclusive license for Federal governmental purposes but only to the extent
that Licensee can show that the Federal government received a discount on
Product sales which discount is equivalent to or greater than the amount of any
such royalty that would otherwise be due. Any sales for Federal governmental
purposes shall be reported under the Records and Reports Section hereinbelow by
providing: (a) a Federal government contract number; (b) identification of the
Federal government agency; and (c) a description as to how the benefit of the
royalty-free sale was passed onto the Federal government.
3.3 The royalty provisions of Exhibit B shall be offset by any advances made by
Licensee in the Infringement by Third Parties Section hereinbelow.
3.4 Upon termination of this Agreement for any reason whatsoever, any royalties
which are due but have not yet been paid shall be properly reported and paid to
LMER within thirty (30) days of any such termination.
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3.5 The Royalty provisions hereunder and in Exhibit B shall terminate upon the
expiration of the Proprietary Rights described in Exhibit A, as may be
applicable to any particular Product or Process.
4. Records and Reports
4.1 Licensee agrees to keep adequate records of Licensee in sufficient detail to
enable royalties and Sublicensing Revenue payable hereunder to be determined and
to provide such records for inspection by authorized representatives of LMER, at
any time, upon reasonable advance notice of at least seventy-two (72) hours,
during regular business hours of Licensee. Licensee agrees that any additional
records of Licensee and Sublicensees, related to sales of Products and
Processes, as LMER may reasonably determine are necessary to verify the above
records, shall also be provided to LMER for inspection.
4.2 Within thirty (30) calendar days after the close of each calendar half-year
during the term of this Agreement (i.e. January 31 and July 31), Licensee will
furnish LMER a written report providing: (a) the aggregate amount of all Net
Sales and Sublicensing Revenues in U.S. Dollars during the preceding calendar
half-year period including sales to any Federal governmental agency under
Section 3.2 hereinabove and the aggregate amount of all non-U.S. Net Sales, and
if none, Licensee will so indicate; (b) the
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aggregate amount of royalties due LMER in U.S. Dollars for the preceding
calendar half-year period pursuant to the provisions hereof; and (c) the
aggregate amount of the royalties due LMER in U.S. Dollars payable to the order
of Lockheed Xxxxxx Energy Research Corporation pursuant to the report to be
transmitted in accordance with the Notices Section hereinbelow.
4.3 Should Licensee fail to make any payment to LMER within the time period
prescribed for such payment, then the unpaid amount shall bear interest at the
lesser of (i) the rate of one and one-half percent (1.5%) per month or, (ii) the
greatest amount permitted by law, from the date when payment was due until
payment in full, with interest, is made.
5. Technical Assistance
5.1 LMER agrees, upon the written request of Licensee, to use best reasonable
efforts and due diligence to assist Licensee in seeking necessary DOE approvals
for LMER to provide technical assistance to Licensee at LMER facilities under
appropriate agreements. The cost of such technical assistance shall be paid by
the Licensee.
5.2 LMER agrees to permit its employees, within LMER corporate policy guidelines
then in effect and subject to DOE requirements then in effect, to provide
consulting services to Licensee with reference to Licensee's use and commercial
exploitation of the
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Proprietary Rights as contemplated herein. Licensee shall make payment directly
to the individual consultant(s) for all such services.
6. Infringement by Third Parties
6.1 Licensee shall give notice of any discovered third party infringement of the
Proprietary Rights to LMER. In the event that LMER does not take appropriate
action to stop or prevent such infringement within ninety (90) days after
receiving such notice and diligently pursue such action, Licensee has the right
to take appropriate action to stop and prevent the infringement, including the
right to file suit.
6.2 In the event that Licensee files suit to stop infringement or defends any
action against the validity of any patent included in the Proprietary Rights,
Licensee shall indemnify and hold LMER harmless against all liability, expense
and costs, including attorneys' fees incurred as a result of any such suit.
6.3 Licensee may, however, apply all such costs as a reduction of any royalties
due and payable to LMER under the terms of this Agreement at such time as
verified bills of costs actually incurred are reported to LMER in accordance
with the Records and Reports Section hereinabove.
6.4 In the event Licensee secures a judgment against any third party infringer,
after accounting for and paying all of Licensee's costs associated with
prosecution of such
8
action as well as paying LMER for any reduction of royalties pursuant to this
section, Licensee shall pay LMER its royalties as set forth hereinabove on any
balance of proceeds actually received and Licensee shall retain any such
remaining balance of proceeds.
6.5 The parties hereby agree to cooperate with each other in the prosecution of
any such legal actions or settlement actions undertaken under this section and
each will provide to the other all pertinent data in its possession which may be
helpful in the prosecution of such actions; provided, however, that the party in
control of such action shall reimburse the other party for any and all costs and
expenses in providing data and other information necessary to the conduct of the
action.
6.6 The party having filed such action shall be in control of such action and
shall have the right to dispose of such action in whatever reasonable manner it
determines to be the best interest of parties hereto, except that any settlement
which affects or admits issues of patent validity shall require the advance
written approval of LMER.
7. Representations and Warranties
7.1 LMER represents and warrants that Exhibit A contains a complete and accurate
listing of all the Proprietary Rights licensed and that LMER has the right to
grant the rights, licenses, and privileges granted herein.
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7.2 LMER represents and warrants that LMER has no knowledge of any claims of
infringement filed against LMER for practicing the Exhibit A Proprietary Rights
anywhere in the world.
7.3 Except as set forth hereinabove, LMER makes NO REPRESENTATIONS AND
WARRANTIES, express or implied, with regard to the infringement of proprietary
rights of any third party.
7.4 Licensee acknowledges that the export of any of the Proprietary Rights from
the United States or the disclosure of any of the Proprietary Rights to a
foreign national may require some form of license from the U.S. Government.
Failure to obtain any required export licenses by Licensee may result in
Licensee subjecting itself to criminal liability under U.S. laws.
8. Disclaimers
8.1 Neither LMER, the DOE, nor any persons acting on their behalf shall be
responsible for any injury to or death of persons or other living things or
damage to or destruction of property or for any other loss, damage, or injury of
any kind whatsoever resulting from Licensee's use or sale of any Process,
Licensee's manufacture, use, sale or import of any Products, or the manufacture,
use, sale or import for Licensee of any Products hereunder.
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8.2 EXCEPT AS SET FORTH HEREINABOVE, NEITHER LMER, THE DOE, NOR PERSONS ACTING
ON THEIR BEHALF MAKE ANY WARRANTY, EXPRESS OR IMPLIED: (1) WITH RESPECT TO THE
MERCHANTABILITY, ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY SERVICES,
MATERIALS, OR INFORMATION FURNISHED HEREUNDER; (2) THAT THE USE OF ANY SUCH
SERVICES, MATERIALS, OR INFORMATION WILL NOT INFRINGE PRIVATELY OWNED RIGHTS;
(3) THAT THE SERVICES, MATERIALS, OR INFORMATION FURNISHED HEREUNDER WILL NOT
RESULT IN INJURY OR DAMAGE WHEN USED FOR ANY PURPOSE; OR (4) THAT THE SERVICES,
MATERIALS, OR INFORMATION FURNISHED HEREUNDER WILL ACCOMPLISH THE INTENDED
RESULTS OR ARE SAFE FOR ANY PURPOSE, INCLUDING THE INTENDED OR PARTICULAR
PURPOSE. FURTHERMORE, LMER AND THE DOE HEREBY SPECIFICALLY DISCLAIM ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED, FOR ANY PROCESSES USED OR SOLD, PRODUCTS
MANUFACTURED, USED, SOLD OR IMPORTED BY, OR PRODUCTS MANUFACTURED, USED, SOLD OR
IMPORTED FOR LICENSEE. NEITHER LMER NOR THE DOE SHALL BE LIABLE FOR
CONSEQUENTIAL OR INCIDENTAL DAMAGES IN ANY EVENT.
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8.3 Licensee agrees to indemnify LMER, the DOE, and persons acting on their
behalf for all damages, costs, and expenses, including attorney's fees, arising
from, but not limited to, Licensee's making, using, selling or importing of, or
the making, using, selling or importing on behalf of Licensee Products or
Licenseeis using and selling of Processes, in whatever form furnished hereunder,
except for damages, costs and expenses arising out of LMER's gross negligence or
willful misconduct.
9. Term of Agreement and Early Termination
9.1 This Agreement shall until the expiration of the last to expire of the
Proprietary Rights subject to early termination as set forth hereinbelow and the
terms and conditions set forth in Exhibit B1, Exhibit B2 and Exhibit C attached
hereto and hereby incorporated into this Agreement by reference thereto.
9.2 Either Party shall have the right to terminate this Agreement without
judicial resolution upon notice to the other Party after a breach of any
material provision by the other Party has gone uncorrected for sixty (60) days
after the other Party has been notified in writing of such breach. In the event
of a breach, either Party shall have the right to all remedies available at law.
9.3 This Agreement shall terminate automatically upon the extinguishment of all
of the Exhibit A Proprietary Rights, for any reason.
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9.4 Licensee shall provide notice to LMER of its intention to file a voluntary
petition in bankruptcy or of another party's intention to file an involuntary
petition in bankruptcy for Licensee. Licensee's failure to provide such notice
to LMER of such intentions shall be deemed a material, pre-petition, incurable
breach of this Agreement.
9.5 Except in the event of a sale to, or merger with, a party succeeding to
substantially all of the assets of the Licensee which relate to the subject
matter of this Agreement and subject to execution of a substantially similar
copy of this Agreement whereby the succeeding party accepts all terms and
conditions hereof, LMER, at its sole discretion, may immediately terminate this
Agreement upon any attempt by Licensee to transfer its interest, in whole or in
part, in this Agreement to any other party.
9.6 The Parties agree that Licensee, if not then in breach of any portion of
Exhibit B1 or Exhibit B2 of this Agreement, may voluntarily terminate this
Agreement upon sixty (60) days notice to LMER and payment to LMER of a pro
rata share of any minimum royalty due LMER in the year of such termination.
10. Rights of Parties After Termination
10.1 Neither Party shall be relieved of any obligation or liability under this
Agreement arising from any act or omission committed prior to the effective date
of such
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termination. The obligations under Paragraphs 3, 8, 10, and shall survive any
expiration or termination of this Agreement.
10.2 From and after any termination of this Agreement, Licensee shall have the
right to sell any Products that Licensee had already manufactured prior to
termination, provided that all royalties and reports required hereinabove shall
be submitted to LMER.
10.3 From and after any termination of this Agreement, Licensee shall not
manufacture nor have manufactured any Products nor sell or use any Process
pursuant to this Agreement.
10.4 The rights and remedies granted herein, and any other rights or remedies
which the parties may have, either at law or in equity, are cumulative and not
exclusive of others. On any termination, Licensee shall duly account to LMER and
transfer to it all rights to which LMER may be entitled under this Agreement.
11. Force Majeure
11.1 No failure or omission by LMER or by Licensee in the performance of any
obligation under this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from acts of God; acts or omissions
of any government or agency thereof, compliance with rules, regulations, or
orders of any governmental
14
authority; fire; storm; flood; earthquake; accident; acts of the public enemy;
war; rebellion; insurrection; riot; sabotage; invasion; quarantine; restriction;
strikes; failures or delays in transportation; or inability to obtain materials
due to the aforementioned events.
12. Notices
12.1 All notices and reports shall be addressed to the parties hereto as
follows:
If to LMER:
Business Manager-Technology Transfer Facsimile No.
Lockheed Xxxxxx Energy Systems, Inc., (000) 000-0000
Xxxx Xxxxxx Xxx 0000 Xxxxxx Xx.
Xxx Xxxxx, Xxxxxxxxx 00000-0000 (000) 000-0000
If to Licensee:
Xxxx X. Xxxxxxx
Facsimile No. Gene Logic, Inc.
(410) 309-3100 ext 109 00000 Xxx Xxxxxxxx Xxxx,
Xxxxxx Xx. Xxxxxxxx, Xxxxxxxx 00000
(000) 000-0000
12.2 All minimums or royalty payments due LMER shall be sent to:
Lockheed Xxxxxx Energy Research Corporation
Royalty Account
Department 888071
Xxxxxxxxx, XX 00000-0000
12.3 Any notice, report or any other communication required or permitted to be
given by one Party to the other Party by this Agreement shall be in writing and
either (a) served personally on the other Party, (b) sent by express, registered
or certified first-class
15
mail, postage prepaid, addressed to the other Party at its address as indicated
above, or to such other address as the addressee shall have previously furnished
to the other Party by proper notice, (c) delivered by commercial courier to the
other Party, or (d) sent by facsimile to the other Party at its facsimile number
indicated above or to such other facsimile number as the Party shall have
previously furnished to the other Party by proper notice, with machine
confirmation of transmission.
13. Non-Abatement of Royalties
13.1 LMER and Licensee acknowledge that certain of the Proprietary Rights may
expire prior to the conclusion of the term of this Agreement; however, LMER and
Licensee agree that the royalty rates provided for hereinabove shall be uniform
and undiminished, except as otherwise provided pursuant to this Agreement.
14. Waivers
14.1 The failure of either Party at any time to enforce any provision of this
Agreement or to exercise any right or remedy shall not be construed to be a
waiver of such provisions or of such rights or remedy or the right of that Party
thereafter to enforce each and every provision, right, or remedy.
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15. Modifications
15.1 It is expressly understood and agreed by the parties hereto that this
instrument contains the entire agreement between the parties with respect to the
subject matter hereof and that all prior representations, warranties, or
agreements relating hereto have been merged into this document and are thus
superseded in totality by this Agreement. This Agreement may be amended or
modified only by a written instrument signed by the duly authorized
representatives of both of the parties.
16. Confidentiality
16.1 The Parties agree that during the term of this Agreement and for a period
of three (3) years after it terminates, a Party receiving information of the
other Party, which is marked "confidential," will not disclose such confidential
information to any third party without prior written consent of the disclosing
Party, except to those necessary to enable the Parties to perform under this
Agreement or as may be required by LMER's Prime Contract with the DOE under the
same restrictions as set forth herein.
16.2 A Party shall have no obligations with respect to any portion of such
confidential information of the other Party which:
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a) is publicly disclosed through no fault of any Party hereto, either
before or after it becomes known to the receiving Party; or
b) was known to the receiving Party prior to the date of this Agreement
which knowledge was acquired independently and not from the other Party;
or
c) is subsequently disclosed to the receiving Party in good faith by a
third party which has a right to make such a disclosure; or
d) has been published by a third party as a matter of right; or
e) is subsequently independently invented or discovered by the receiving
Party without reference to the other Party's confidential information.
17. Headings
17.1 The headings for the sections set forth in this Agreement are strictly for
the convenience of the parties hereto and shall not be used in any way to
restrict the meaning or interpretation of the substantive language of this
Agreement.
18. Law
18.1 This Agreement shall be construed according to the laws of the State of
Tennessee and the United States of America.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in their respective names by their duly authorized
representatives.
"LMER"
LOCKHEED XXXXXX ENERGY RESEARCH CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: (typed) Xxxxxxx X. Xxxxxx
------------------------------------
Title: Vice President, Technology Transfer
------------------------------------
Date: 6/9/97
------------------------------------
"Licensee"
Gene Logic, Inc.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------------
Title: VP, Business Development and Intellectual Property
--------------------------------------------------
Date: 6/10/97
------------------------------------
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EXHIBIT A, PROPRIETARY RIGHTS
1. [***]
Inventor: [***]
The following national phase applications are based on [***]
2. [***]
3. [***]
4. [***]
5. [***]
Initials
LMER: /s/ WRM
--------------------------
Date: 6/9/97
--------------------------
Licensee: /s/ DRP
----------------------
Date: 6/10/97
--------------------------
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CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B1, EXECUTION FEE, ROYALTIES AND
MINIMUM ANNUAL ROYALTIES AMOUNTS,
PATENT COST REIMBURSEMENT
1. In consideration of the rights and licenses granted herein, Licensee
agrees to pay LMER [***] of which [***] has already been paid, the remaining
[***] to be paid on the execution of this Agreement. Licensee further agrees
to pay LMER an additional [***] upon [***]
2. The royalty rate shall be [***] of Net Sales of Products. If Licensee's
royalty obligation to all licensors is in excess of [***], then the present
sublicensing royalty rates will be reduced on a proportional basis. The
present royalty rate will not be reduced below [***]. If this provision is
invoked, Licensee agrees to report the following information in addition to
the requirements of Paragraph 4.0 of this Agreement:
1) Names of licensors to whom Licensee has licensing royalty obligations
2) Royalty rates for each, before and after the proportional decrease
referred to above.
3. For Net Sales of Products used in Licensee's in-house drug screening
program the royalty rate shall be [***] of Net Sales of Products
4. The [***] shall be calculated as follows: If, by the [***], the [***],
then Licensee shall [***] within thirty (30) days of said anniversary date.
5. Reimbursement of all fees and costs relating to the filing, prosecution,
and maintenance of the Proprietary Rights after the effective date of this
Agreement shall be the responsibility of Licensee. LMER shall invoice
Licensee for these fees and costs. Licensee agrees to reimburse LMER within
30 days of receipt of invoice.
6. Reimbursement of all fees and costs relating to the filing, prosecution,
and maintenance of the Proprietary Rights which were incurred prior to the
effective date of this Agreement shall be provided by Licensee in the amount
of [***]. Of this amount, [***] will be paid upon execution of this Agreement,
CONFIDENTIAL TREATMENT REQUESTED
in addition to the execution fee described in Paragraph B1 (1) above. The
remaining amount of [***] will be paid on the three-month anniversary of this
Agreement.
Initials
LMER: /s/ WRM Licensee: /s/ DRP
-------------------------------- ----------------------------
Date: 6/9/97 Date: 6/10/97
-------------------------------- --------------------------------
EXHIBIT B2, SUBLICENSE ROYALTIES
In order to maximize the commercialization of the Products and
Processes and LMER's overall income from this Agreement, for sublicenses
granted to third parties, Licensee agrees to pay LMER a sublicense royalty of
amounting to [***] of the total "Sublicensing Revenue" owed Licensee under
said sublicenses.
If Licensee's sublicensing royalty obligation to all licensors is in
excess of [***], then the present sublicensing royalty rates will be reduced
on a proportional basis. The sublicensing royalty rate will not be reduced
below [***] of Sublicensing Revenue. If this provision is invoked, Licensee
agrees to report the following information in addition to the requirements of
Paragraph 4.0 of this Agreement:
1) Names of licensors to whom Licensee has sublicensing royalty
obligations
2) Sublicensing royalty rates for each, before and after the proportional
decrease referred to above.
Initials
LMER: /s/ WRM
--------------------------
Date: 6/9/97
--------------------------
Licensee: DRP
----------------------
Date: 6/10/97
--------------------------
CONFIDENTIAL TREATMENT REQUESTED
