CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.17
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement"), effective as of July 1, 2001
("Effective Date"), is by and between the following parties:
CHUGAI DIAGNOSTICS SCIENCE CO., LTD., a corporation duly organized under the
laws of Japan, having a principal place of business at 00-0, Xxxxxx 0 Xxxxx,
Xxxxxxx-Xx, Xxxxx 000-0000, Xxxxx ("CDS"), and
GEN-PROBE INCORPORATED, a Delaware corporation, having its principal place of
business at 00000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000-0000
("GEN-PROBE").
PREAMBLE
A. GEN-PROBE has developed proprietary technology relative to the
performance of diagnostic assays based on genetic probe technology for the
detection of agents causing infectious diseases, including viruses, and for the
detection of cancer and has the right to grant licenses to and under that
certain technology described and claimed in the Gen-Probe Patent Rights as
defined below.
B. CDS desires to obtain a license from GEN-PROBE to practice the
inventions described in the Gen-Probe Patent Rights as defined below, and to
make, have made, use, sell or offer for sale Licensed Products, Future Licensed
Products and Licensed Methods as defined below, and GEN-PROBE is willing to
grant such a license on the terms and subject to the conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below:
1.1 "Affiliate" shall mean a corporation or other legal entity that is
controlling or controlled by a Party. For purposes of this definition, "control"
means the ownership, directly or indirectly, of more than fifty percent (50%) of
the outstanding equity securities of a corporation which are entitled to vote in
the election of directors or a more than fifty percent (50%) interest in the net
assets or profits of an entity which is not a corporation.
1
1.2 "Calendar Year" shall mean any calendar year commencing on January 1
and ending on December 31; provided, however that the 2001 Calendar Year shall
be the period commencing on the Effective Date and ending on December 31, 2001.
1.3 "Confidential Information" shall mean all information and materials,
patentable or otherwise, of a Party which are not generally known or available,
are treated as private and confidential by the disclosing Party and are
disclosed by or on behalf of such Party to the other Party pursuant to this
Agreement, including, but not limited to, formulations, techniques, methodology,
equipment, data, reports, customer lists, pre-clinical and clinical trials and
the results thereof, sources of supply, patent positioning and business plans,
including any negative developments, whether or not related to this Agreement.
1.4 "Dispute" shall mean any controversy or claim relating to, arising out
of or in any way connected to any provision of this Agreement.
1.5 "Effective Date" shall mean the date first set forth above.
1.6 "Exchange Rate" shall mean, with respect to any amount to be converted
from a foreign currency to U.S. dollars hereunder, Sumitomo Mitsui Banking
Corporation's TTS rate on the last Japanese business day of the Semi-Annual
Period preceding the applicable Semi-Annual Period.
1.7 "Field" shall mean the field of diagnostics, including but not limited
to human, animal and environmental diagnostics and food testing and of
investigational use only (IUO) applications. The "Field" specifically does not
include nucleic acid probe based testing of human blood, plasma or other blood
products intended for direct transfusion or administration to humans. The
"Field" also does not include nucleic acid probe based testing for infectious
agents in blood in connection with organ transplants.
1.8 "First Commercial Sale" shall mean the first sale by CDS of any
Licensed Product, Future Licensed Product to be defined in Section 3.1, or
Licensed Method for value and not for demonstration, testing or promotional
purposes.
1.9 "Gen-Probe Patent Rights" shall mean (a) the Japanese patents, patent
applications and international applications, to the extent they enter the
national stage in Japan, identified in Exhibit "A" to this Agreement; (b) all
patents that have issued or in the future issue, that are derived from or are
related to, by priority, in whole or in part, all patents, patent applications
and international applications identified in Exhibit A to this Agreement,
including without limitation utility model and design patents and certificates
of invention; and (c) all reissues, reexaminations, renewals and extensions,
continuations, continuations-in-part and divisionals, claiming priority from the
Japanese patent applications,
2
patents and international applications, to the extent they enter the national
stage in Japan, identified in Exhibit A. In each case, the Gen-Probe Patent
Rights include only those patents, patent applications and international
applications, to the extent they enter the national stage in Japan, for which
Gen-Probe has the legal right to grant licenses, immunities or other rights
thereunder. Notwithstanding the above, in the future at GEN-PROBE's sole
discretion, GEN-PROBE may offer to add its totally new patents and patent
applications to the Exhibit A in exchange for a reasonable compensation to be
mutually agreed upon.
1.10 "Licensed Method" shall mean any method, the use or practice of which
would constitute, but for the license granted herein, an infringement of any
issued Valid Claim within the Gen-Probe Patent Rights; provided, however, that
Licensed Methods shall never include any method directed to the detection of any
target or marker that is excluded from Future Licensed Products under Section
3.1. In the event that CDS (or its Affiliate(s)) invoices third parties for
CDS's performance of a Licensed Method used in conjunction with a Licensed
Product or Future Licensed Product, then Net Sales (as defined in Section 1.12,
below) shall include an amount equal to the average per unit Net Sales
attributed to the Licensed Method multiplied by the number of such Licensed
Methods performed by CDS (or its Affiliate(s)) during the Semi-Annual Period. If
such Licensed Product or Future Licensed Product is not sold to third parties
for commercial use during such Semi-Annual Period, a reasonable apportionment
shall be made of the gross amount invoiced for performance of the Licensed
Method between the value of the Licensed Product or Future Licensed Product per
se and the value of the laboratory services associated therewith, taking into
account the average selling prices of products similar to the Licensed Products
or Future Licensed Products. Such apportionment shall be negotiated in good
faith between the Parties.
1.11 "Licensed Product" shall mean any already developed product or
product in development as of the Effective Date of this Agreement including the
products listed on Exhibit B to this Agreement to the extent that it is:
a. Any product that is specifically intended for use in practicing a
Licensed Method;
b. Any product that lacks a substantial use other than in practicing
a Licensed Method; or
c. Any product, the making, using, selling, or offering for sale of
which would constitute, but for the license granted herein, an
infringement of any issued Valid Claim within the Gen-Probe Patent
Rights and/or patents on Derivative Inventions;
3
provided, however, that the products which CDS, as of the Effective Date,
distributes under the Distribution Agreement between GEN-PROBE and CDS dated
September 1, 1998, shall be excluded from the Licensed Product definition.
1.12 "Net Sales" shall mean the aggregate amount of revenue in U.S.
Dollars (converted as necessary for sales made in a currency other than U.S.
Dollars into U.S. Dollars at the applicable Exchange Rate on the last business
day of such Semi-Annual Period in accordance with Section 1.6 above) received or
receivable by CDS and/or its Affiliates with respect to all Licensed Products,
Licensed Methods and Future Licensed Products sold during such Semi-Annual
Period, (for any Licensed Product, Licensed Method or Future Licensed Product
transferred for consideration other than cash, the sales price shall be deemed
to be the average price at which identical Licensed Products, Licensed Methods
or Future Licensed Products were sold by CDS or its Affiliates during such
Semi-Annual Period in "arms-length" transactions), less only the following:
[***]
1.13 "Party" or "Parties" means, in the singular, CDS or GEN-PROBE and in
the plural, CDS and GEN-PROBE.
1.14 "Royalty Period" shall mean the Semi-Annual Period or partial
Semi-Annual Period, commencing with the Effective Date of this Agreement, and
each Semi-Annual Period thereafter.
1.15 "Semi-Annual Period" shall mean, for each calendar year, the six
month period beginning on each January 1 or July 1 of such year, without regard
to whether such dates are otherwise business days.
4
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
1.16 "Term" shall mean the term of this Agreement, consisting of the
period from the Effective Date until termination of this Agreement in accordance
with Article X hereof.
1.17 "Territory" shall mean the country of Japan only.
1.18 "United States" shall mean the United States of America, its
territories and possessions.
1.19 "U.S. Dollar" shall mean the United States dollar. All references in
this Agreement to monetary amounts shall be to U.S. Dollars unless otherwise
stated.
1.20 "Valid Claim" shall mean any claim of the patents included within the
Gen-Probe Patent Rights which either (a) is included in an issued patent that
has not been held unenforceable or invalid by any agency or court of competent
jurisdiction in any unappealable or unappealed decision or (b) remains pending
in a patent application that has not been abandoned or finally rejected without
the possibility of appeal or refiling.
ARTICLE II
GRANT OF RIGHTS
2.1 License Grant. Subject to the terms and conditions of this Agreement,
GEN-PROBE hereby grants CDS, and CDS hereby accepts a non-exclusive,
non-transferable, royalty-bearing license in the Territory under the Gen-Probe
Patent Rights to develop, make, have made, use, offer for sale, sell and have
sold, Licensed Products in the Field, Future Licensed Products pursuant to
Section 3.1 and to practice Licensed Methods in the Field.
2.2 Initial License Fee. CDS agrees to pay a one-time license fee of [***]
to GEN-PROBE for the rights granted from the Effective Date through termination.
Said payment shall be made within sixty (60) days of the execution of this
Agreement.
2.3 Licensed Products Distribution Option. If CDS completes development of
a Licensed Product, GEN-PROBE shall have an option to distribute such Product
outside the Territory on reasonable commercial terms. Following notification by
CDS of submission to the Ministry of Health, Labor and Welfare or equivalent
government authority of an application for approval of a Licensed Product,
GEN-PROBE shall have one hundred and twenty (120) days to exercise its option.
If GEN-PROBE exercises its option to distribute a Licensed Product outside the
Territory, the Parties shall negotiate in good faith the reasonable commercial
terms of such distribution agreement. Should GEN-PROBE elect not to exercise its
option for distribution rights outside the Territory, CDS may present to
GEN-PROBE for written approval a third party candidate for
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
5
the distribution rights on the same or less beneficial terms and conditions as
those offered to GEN-PROBE. CDS agrees they shall not select any third party
candidate that would compete with GEN-PROBE products or with GEN-PROBE partners'
or collaborators' products in the nucleic acid testing area. If GEN-PROBE
declines to exercise this option during the one hundred twenty (120) days and
CDS later proposes a distribution agreement with a third party under more
favorable terms and conditions than were originally offered to GEN-PROBE, CDS
must return to GEN-PROBE and offer the distribution rights under the more
favorable terms and conditions to GEN-PROBE.
2.4 Limitation of Rights. CDS acknowledges that its rights under the
Gen-Probe Patent Rights are limited to those expressly granted herein and that
CDS is not granted the right to develop, make, use, sell, transfer or otherwise
make available to Third Parties any products other than Licensed Products, or to
make, use or sell Licensed Products outside the Field or outside the Territory
(except that CDS shall have the right to sell Licensed Products and/or Future
Licensed Products, pursuant to the terms of this Agreement, for resale outside
the Territory pursuant to Section 2.3 and Section 3.4).
2.5 Sublicensing. CDS shall have the right to sublicense to its Affiliates
the rights granted by GEN-PROBE to CDS under this Article II. CDS shall not have
the right to grant a sublicense to any party other than an Affiliate without the
prior written consent of GEN-PROBE.
2.6 Assignment. Neither Party to this Agreement shall have the right to
assign, delegate, mortgage, pledge, hypothecate, sublicense or otherwise
transfer any rights or obligations under this Agreement without the prior
written consent of the other Party. Any such purported transfer without such
prior written consent shall be deemed void and without effect. For purposes of
this Agreement, "assignment" shall include (i) the transfer of substantially all
of the assets of a Party, even if this Agreement is specifically excluded from
such transfer and (ii) any change in the ultimate beneficial control of a Party.
CDS's rights under this Agreement shall terminate upon any merger,
consolidation, or similar change in corporate structure to which GEN-PROBE has
not consented in writing. Notwithstanding the foregoing, either Party may assign
and transfer this Agreement, including all its rights and obligations hereunder,
to any Affiliate of such Party, provided that such assignment shall not relieve
the assigning Party of its obligations hereunder. Notwithstanding any of the
foregoing, GEN-PROBE may assign and transfer this Agreement, including all its
rights and obligation hereunder, to any party succeeding to all its business. In
addition, GEN-PROBE may assign or transfer its right to receive payments
hereunder upon reasonable prior written notice to CDS.
2.7 Ownership. GEN-PROBE shall retain the unrestricted right to use,
and/or license for use, for any purpose whatsoever, the property that is the
subject of this Agreement, inside or outside the Field. Except for the licenses
6
expressly granted under Section 2.1, no right, title, or interest in any
discovery, invention or other technology, data or information (or any patent,
copyright, trademark, or other intellectual property rights therein) of
GEN-PROBE shall pass to CDS under this Agreement. GEN-PROBE shall not be under
any obligation to grant to CDS any additional rights, other than those granted
by Section 2.1, in any patent, copyright, trademark, or other intellectual
property, nor shall GEN-PROBE be restricted with respect thereto.
2.8 Limitations. Nothing in this Agreement shall be interpreted as giving
CDS the right to analyze, dissect, or disassemble any instrument, reagent,
component, object, software or other property of GEN-PROBE provided under the
terms of this Agreement, and which is not properly available from other sources
which have the right to transfer such property and authorize such activity, in
order to circumvent the need for a license of the technology reflected therein.
The licenses granted hereunder do not include a license for research and
development activities which are intended to identify means by which the need
for the license can be avoided.
2.9 Recognition of Stanford and Organon Teknika Agreements. The rights
granted to CDS by GEN-PROBE hereunder are subject to the following:
Stanford Agreement. The patent rights designated as "Selective
Amplification", U.S. Patent No. 5,437,990 are sublicensed to CDS having
its principal place of business at 00-0 Xxxxxx 0-Xxxxx, Xxxxxxx-Xx, Xxxxx
000-0000, Xxxxx by GEN-PROBE under the terms of a co-exclusive license
agreement (the "Stanford Agreement") effective April 27, 1997 between
GEN-PROBE and The Board of Trustees of the Xxxxxx Xxxxxxxx Junior
University, Palo Alto, California ("Stanford"). Under the terms of the
Stanford Agreement, certain provisions as set forth in Exhibit E, attached
hereto, are incorporated into this Agreement by reference.
Teknika Agreement. GEN-PROBE is a party to a non-assertion agreement
effective February 7, 1997 (the "Teknika Agreement") with Organon Teknika
B.V., having a place of business at Xxxxxxx 00, 0000 XX Xxxxxx, Xxx
Xxxxxxxxxxx ("Teknika"), which agreement grants certain rights and imposes
certain conditions with respect to the transcription-based amplification
patent rights owned or licensed by GEN-PROBE. CDS agrees, at the request
of Teknika, to permit and to cooperate fully with an annual review of its
manufacturing records (and such other records as may be required) by an
impartial, technically qualified third party to verify compliance with the
provisions of Section 3.3 of the Teknika Agreement. Selection of such
third party shall be subject to the approval of CDS, such approval to be
not unreasonably withheld. The results of such a review as provided to
Teknika will consist solely of a finding of compliance or non-compliance.
The cost of such review shall be borne by Teknika and shall not be
unreasonably burdensome for CDS.
7
CONTINUATION OF RIGHTS. In the event the Stanford Agreement or Teknika
Agreement is terminated for any reason, the rights under such agreements
which are granted by GEN-PROBE to CDS under this Agreement, as applicable,
may be continued with Stanford and/or Teknika, as applicable, provided
that certain conditions precedent, as set forth in Exhibit E, shall have
been fulfilled.
2.10 Notification of Future Licenses Granted. GEN-PROBE agrees to notify
CDS prior to any public announcement being made, in the event that GEN-PROBE
grants to a third party a license in Japan for the Gen-Probe Patent Rights.
ARTICLE III
FUTURE PRODUCTS
3.1 Development of Future Licensed Products. Subject to all of the terms
and constraints of the license grant of Section 2.1, CDS shall have the right to
develop and include with the license granted hereunder diagnostic assays and
assays for investigational use only (IUO) applications in addition to those
identified on Exhibit B (such additional assays to be referred to as the "Future
Licensed Products"). CDS shall exercise its right to designate Future Licensed
Products by providing GEN-PROBE with written notice of such designation. Future
Licensed Products under this Agreement and the license granted to CDS under
Section 2.1, shall not, under any circumstances, include any product, regardless
of instrument platform, directed to the markers or disease targets identified on
Exhibit C which have been exclusively licensed to Bayer Corporation pursuant to
the provisions of a June 11, 1998 agreement between GEN-PROBE and Chiron (a copy
of which has been made available to CDS). Additionally, Future Licensed Products
under this Agreement and the license granted to CDS under Section 2.1, shall not
under any circumstance include any product, regardless of instrument platform,
directed to a marker or disease target for which GEN-PROBE has given or received
a "Blocking Notice" pursuant to Section 4.3.7 of the June 11, 1998 agreement
between GEN-PROBE and Chiron (a copy of which has been made available to CDS).
Additionally, Future Licensed Products and the license granted to CDS under
Section 2.1 shall not include any product, regardless of instrument platform,
directed to the markers or disease targets identified on Exhibit D which are
targets for current GEN-PROBE products. Additionally, Future Licensed Products
and the license granted to CDS under Section 2.1 shall not under any
circumstances include any product directed to a marker or disease target for
which GEN-PROBE can demonstrate by reasonably satisfactory evidence that, prior
to the time it received CDS's designation of such assay, GEN-PROBE had completed
the Design Review Process Phase 1 on a probe based assay. If GEN-PROBE receives
a designation from CDS for a Future Licensed Product that is precluded by this
Section, it will notify CDS in
8
writing within thirty (30) days and provide reasonably satisfactory
documentation to support the exclusion of the proposed probe based assay from
the license granted hereunder.
3.2 Termination of License. The license granted under this Agreement for
each Future Licensed Product for commercial sale shall terminate unless CDS
begins active development of such Future Licensed Product within six (6) months
of the date of the written notice by CDS to GEN-PROBE under Section 3.1 above,
and CDS submits an application of approval of such Future Licensed Product to
the Ministry of Health, Labor and Welfare or equivalent government authorities
within four (4) years of the date of the written notice by CDS to GEN-PROBE
under Section 3.1 above. The license granted under this Agreement for each
Future Licensed Product for investigational use only ("IUO") shall terminate
unless CDS begins active development of such Future Licensed Product within six
(6) months of the date of the written notice by CDS to GEN-PROBE under Section
3.1 above and CDS accomplishes the first commercial sale of the IUO Future
Licensed Product within eighteen (18) months of the date of the written notice
by CDS to GEN-PROBE. Notwithstanding the above, each period of four (4) years
and eighteen (18) months specified above may be extended upon mutual written
consent.
3.3 Development Support and Funding. All development work for all Licensed
Products and Future Licensed Products shall be the sole responsibility of CDS.
In GEN-PROBE's sole discretion, GEN-PROBE may, at the request and cost of CDS,
provide CDS with technical information, materials or technical training pursuant
to any of GEN-PROBE's new technologies or inventions, provided that such a
transfer is permitted by laws and regulations.
3.4 Future Licensed Product Distribution Option. If CDS develops a Future
Licensed Product, GEN-PROBE shall have an option to distribute such Product
outside the Territory on reasonable commercial terms. Following notification by
CDS of submission to the Ministry of Health, Labor and Welfare or equivalent
government authorities of an application for approval of a Future Licensed
Product, GEN-PROBE shall have one hundred and twenty (120) days to exercise its
option. If GEN-PROBE exercises its option to distribute a Future Licensed
Product outside the Territory, the Parties shall negotiate in good faith the
reasonable commercial terms of such distribution agreement. Should GEN-PROBE
elect not to exercise its option for distribution rights outside the Territory,
CDS may present to GEN-PROBE for written approval a third party candidate for
the distribution rights on the same or less beneficial terms and conditions as
those offered to GEN-PROBE. CDS agrees they shall not select any third party
candidate that would compete with GEN-PROBE products or with GEN-PROBE partners'
products in the nucleic acid testing area. If GEN-PROBE declines to exercise its
option during the 120 days and CDS later proposes a distribution agreement with
a third party under more favorable terms and conditions than were originally
offered to GEN-PROBE, CDS must return to GEN-PROBE and
9
offer the distribution rights under the more favorable terms and conditions to
GEN-PROBE. GEN-PROBE approval shall not be unreasonably withheld.
3.5 Coordination. CDS and GEN-PROBE will meet at least semiannually to
provide updates on product development progress by the Parties, including but
not limited to: updates on patent status concerning Gen-Probe Patent Rights and
Derivative Inventions; business strategies pertaining to this License and Future
Licensed Products in the Territory. CDS and GEN-PROBE may also discuss and
consider the potential for collaboration or co-development activities in areas
of mutual interest and benefit: including but not limited to, CDS suggestions
for potential third party sub-licensees. Any activities outside the provisions
of this Agreement shall be at GEN-PROBE's sole discretion.
ARTICLE IV
ROYALTIES
4.1 Royalty Payment for Past Licensed Sales. CDS agrees to pay GEN-PROBE
the amount of [***] as royalty payment for
sales of CDS's hepatitis B virus ("HBV") product in the period from product
launch (July, 1998) to the Effective Date of this Agreement. Said payment shall
be made in U.S. Dollars within thirty (30) days of the execution of this
Agreement. Beginning with the Effective Date of this Agreement, royalty payments
for the CDS HBV product shall be governed by this Agreement.
4.2 Percentage Royalties. CDS agrees to pay GEN-PROBE royalties on Net
Sales as set forth herein. The amount of royalties payable under this Section
4.2 shall be determined on a Semi-Annual Period basis and, for any Semi-Annual
Period, such amount shall be calculated by taking (A) the Net Sales for such
Semi-Annual Period of all the Licensed Products and Future Licensed Products,
multiplied by (B) the Applicable Royalty Rate described below.
4.3 Applicable Royalty Rate:
The "Applicable Royalty Rate" shall be calculated as follows:
Applicable Rate Portion of Total Annual Net Sales:
[***] Less than or equal to $5 million
[***] > $5 million and less than or equal to $10 million
[***] > $10 million and less than or equal to $15 million
[***] > $15 million and less than or equal to $20 million
[***] > $20 million
[***]
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
10
[***]
4.4 Royalty Payments. The percentage royalty accruing to GEN-PROBE under
this Agreement shall be paid by CDS on a Semi-Annual Period basis beginning the
Semi-Annual Period in which a First Commercial Sale occurs. Payments shall be
made within forty-five (45) days of the end of each such Royalty Period. All
amounts payable to GEN-PROBE under this Section will first be calculated in the
currency of sale and then converted into U.S. dollars in accordance with Section
1.6 and, to the extent permitted by applicable law, international trade
convention and government regulations, such amounts shall be paid without any
deduction for withholding taxes, value-added taxes, collection fees, exchange
fees, bank transfer charges any other charges applicable to such payments,
except where such withholding by CDS is required by law, international trade
convention and government regulations. Payments shall be made by CDS to the
address set forth in this Agreement for GEN-PROBE, or in such other manner as
may be reasonably directed from time to time by GEN-PROBE.
4.5 Pricing. CDS shall have sole discretion in establishing prices for
Licensed Products and Future Licensed Products based upon prevailing market
conditions, competitive factors and other commercial considerations it
reasonably deems relevant. Royalties payable under this Agreement shall not be
reduced through sale of such Products in a manner as to serve as a "loss
leader". Royalties payable under this Agreement shall not be reduced through
marketing of Licensed Products and Future Licensed Products, associated
instrumentation, or other products and services in such a manner as to distort
the relative value of the Licensed Products or Future Licensed Products in
relation to the cost or value of the instrument or other products and services,
when considered in light of the primary marketing practices within the clinical
diagnostic industry (or other relevant industry, if applicable).
4.6 Taxes. In the event that CDS is required to withhold taxes imposed
upon GEN-PROBE for any payment under this Agreement by virtue of the laws or
governmental regulations of a country in which Licensed Products or Future
Licensed Products are sold or Licensed Methods are practiced, then such payments
will be made by CDS on behalf of GEN-PROBE by deducting from the payment due
GEN-PROBE and remitting such taxes to the proper authorities on a timely basis,
provided that CDS supplies GEN-PROBE with official documentation and/or tax
receipt on such withholdings supporting such taxes and such payments as may be
required by GEN-PROBE for its tax records.
4.7 Royalty Reports. A report containing the following information shall
accompany each royalty payment:
11
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
X. Xxxxx sales of Licensed Products and Future Licensed Products
made by CDS and its Affiliates during the applicable Royalty Period;
b. Calculation of Net Sales for the applicable Royalty Period;
c. Total Net Sales in U.S. dollars for the applicable Royalty
Period, together with the exchange rates used for conversion; and,
d. Calculation of the royalty amount payable to GEN-PROBE for the
applicable Royalty Period.
All such reports shall be maintained in confidence by GEN-PROBE. If no royalties
or other payments are due to GEN-PROBE for any Semi-Annual Period, the report
shall so state.
4.8 Records. CDS shall keep, and shall require that its Affiliates keep,
for a period of not less than three (3) years after each Calendar Year,
complete, true and accurate books of account and other records containing all
information and data which may be necessary to ascertain and verify the amount
of royalties payable hereunder for such Calendar Year, including, without
limitation, detailed backup for the computations of Net Sales which records
shall contain sufficient information to permit GEN-PROBE to confirm the accuracy
of any reports delivered to GEN-PROBE in accordance with Section 4.7. During the
term of this Agreement and for a period of three (3) years thereafter, GEN-PROBE
shall have the right from time to time (not to exceed twice during each Calendar
Year) to inspect, at reasonable times and under reasonable conditions, the books
and records of CDS containing the information referred to in this Section.
4.9 Late Payments. Any payments by CDS that are not paid on or before the
date such payments are due under this Agreement shall bear interest charges at
the rate of one percent (1%) per month. The interest shall be one percent (1%)
for the first one to thirty-one days and shall be prorated on a daily basis
thereafter. The interest shall be calculated from the date the payment was due
to GEN-PROBE until actually received by GEN-PROBE.
4.10 Third Party Royalties. CDS will be solely responsible for payment of
all royalties due to third parties as a result of CDS's development,
manufacture, use, or sale of any Licensed Products, Future Licensed Products or
Licensed Methods. GEN-PROBE agrees to provide commercially reasonable assistance
to CDS in their efforts to obtain third party licenses deemed necessary by CDS,
which third parties are listed on Exhibit F hereto.
12
ARTICLE V
INFRINGEMENT
5.1 Infringement by Third Parties.
(a) If CDS becomes aware of any known or suspected infringement by a
third party on any Gen-Probe Patent Rights or copyrights, or any unauthorized
use or misappropriation of know-how, Confidential Information or other
proprietary rights in any way pertaining to the Gen-Probe Patent Rights, CDS
shall notify GEN-PROBE, in writing, within two (2) weeks of learning of such
infringement and shall provide all available supporting information known to CDS
regarding any such infringement, unauthorized use or misappropriation.
(b) If GEN-PROBE, at its own expense, commences a suit under this
Section, CDS shall provide reasonable cooperation and assistance to GEN-PROBE in
connection with any such suit, without any charge therefor other than reasonable
out-of-pocket expenses.
(c) In the event GEN-PROBE commences a suit under this Section,
GEN-PROBE may require CDS to join in such suit as a party, but CDS shall have no
obligation to participate in the litigation except to the extent action is
required of a named party to the suit. If CDS is required to join in any such
suit, CDS shall have the right, at its sole expense, to participate and be
represented in any such suit by its own counsel, which counsel shall be
reasonably acceptable to GEN-PROBE. In the event the Parties win a suit under
this Section and obtain damages from such third party, CDS shall be entitled to
be reimbursed its pro rata share of any such award up to the amount of CDS's
total costs for the suit.
5.2 Alleged Infringement on Rights of Third Parties. In the event that any
third party makes a written claim or demand, or brings an action, suit or
proceeding, against either Party (or any of its Affiliates), alleging
infringement of such third party's patent rights or copyrights or unauthorized
use or misappropriation of its know-how, confidential information or other
proprietary rights, arising out of, or in connection with Gen-Probe Patent
Rights, such Party shall promptly notify (within two (2) weeks of receiving
notice of such claim) the other Party in writing, and provide copies of all
materials or papers received by or served on such claimed Party from or by such
third party. Each Party agrees to make available to the other Party, without
charge, its advice and assessment with respect to the technical merits of any
matter which is the subject of any such claim, demand, action, suit or
proceeding.
ARTICLE VI
INVENTIONS
13
6.1 Derivative Inventions. The Parties acknowledge and agree that,
notwithstanding that only limited rights have been granted hereunder, certain
new technology may be discovered or invented by CDS through CDS's use of the
Gen-Probe Patent Rights or GEN-PROBE Confidential Information within the uses
and in the manner contemplated by this Agreement. Any discovery, invention or
improvement that is made by CDS as a result of access to GEN-PROBE Confidential
Information, or through the use of Gen-Probe Patent Rights as licensed under
this Agreement, and which is closely and fundamentally related to such Gen-Probe
Patent Rights, shall be referred to herein as a "Derivative Invention".
a. When CDS recognizes that it has made a Derivative Invention
subject to this Article, it shall promptly disclose that fact to
GEN-PROBE.
b. CDS shall own any Derivative Invention.
c. CDS may use such Derivative Invention, together with the
Gen-Probe Patent Rights licensed hereunder, for those uses and
purposes which do not require any further license of the Gen-Probe
Patent Rights other than that granted herein (it being the agreement
of the Parties that there are no implied license rights created by
this Agreement).
d. CDS agrees not to assert its rights in a Derivative Invention in
such a manner as would block or diminish GEN-PROBE's rights and the
rights of GEN-PROBE's collaborators to practice the Gen-Probe Patent
Rights with which the Derivative Invention was made.
e. Upon request, CDS shall grant a non-exclusive license to
GEN-PROBE to enable GEN-PROBE to make, use, sell, offer for sale,
and import products which use or include the Derivative Invention
outside the Territory. If a Derivative Invention is not patentable,
or if the Derivative Invention does not have any substantial
commercial use other than uses which would infringe the Gen-Probe
Patent Rights which are the subject of this Agreement, then the
non-exclusive license to be granted hereunder shall not be royalty
bearing. If a Derivative Invention is patentable and has a
substantial commercial use which would not infringe the Gen-Probe
Patent Rights, then the non-exclusive license to be granted
hereunder shall include commercially reasonable terms to be
negotiated. The "commercially reasonable terms" referred to above
shall give full recognition in favor of GEN-PROBE to the value of
the Gen-Probe Patent Rights with which the Derivative Invention was
made. The "commercially reasonable terms" shall also give full
recognition, in favor of CDS, to the value of the inventive
application contributed by CDS to the Gen-Probe Patent
14
Rights. Nothing contained herein shall require CDS to license to
GEN-PROBE any technology other than the Derivative Invention itself.
ARTICLE VII
REPRESENTATION AND WARRANTIES
7.1 Authorization. Each Party represents and warrants to the other that it
has the legal right and power to enter into this Agreement, to extend the rights
and licenses granted to the other in this Agreement, and to fully perform its
obligations hereunder, and that the performance of such obligations will not
conflict with its charter documents or any agreements, contracts, or other
arrangements to which it is a party.
7.2 Gen-Probe Patent Rights. GEN-PROBE represents and warrants that it has
the full legal right and power to enter into obligations and grant the rights
and licenses set forth in this Agreement. GEN-PROBE shall be responsible for
effectuating the patent applications of the Gen-Probe Patent Rights and for
maintaining the filed patents of the Gen-Probe Patent Rights in effect and full
force during the Term of this Agreement.
7.3 Disclaimer of Warranties. The license and rights herein are provided
WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER WARRANTY, EXPRESS OR IMPLIED. GEN-PROBE MAKES NO REPRESENTATION OR
WARRANTY THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY
PATENT OR PROPRIETARY RIGHT OF OTHERS. CDS shall be solely responsible for
payment of all royalties due to any third parties in connection with CDS's
development, manufacture, use or sale of any Licensed Product.
7.4 Limitation of Liability. IN NO EVENT WILL GEN-PROBE BE LIABLE FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM CDS'S EXERCISE OF
THIS LICENSE OR ITS USE OF LICENSED PRODUCTS OR LICENSED METHODS.
ARTICLE VIII
CONFIDENTIALITY
8.1 Treatment of Confidential Information. Each Party shall maintain the
Confidential Information of the other Party in confidence, and shall not
disclose, divulge or otherwise communicate such Confidential Information to
others, or use it for any purpose, except that each Party shall have the right
to disclose Confidential Information to its employees who have a need to know
such information in order to fulfill the objectives of this Agreement. Each
Party hereby agrees to exercise its best efforts and precautions (at least the
same
15
degree of care that the Party uses to protect its own Confidential Information)
to prevent and restrain the unauthorized disclosure of such Confidential
Information by any of its directors, officers, employees, consultants,
subcontractors, agents and Affiliates which shall include obtaining appropriate
secrecy or confidentiality undertakings from such persons. Each Party shall be
responsible for any breach of any such undertakings by its employees, agents or
representative.
8.2 Exceptions to Confidentiality
8.2.1 The restrictions on disclosure and use set forth in Section
8.1 shall not apply:
a. To information which was generally available to the public at
the time of disclosure, or information which becomes available
to the public after disclosure by Disclosing Party other than
through fault of the Receiving Party.
b. To information which can be shown to have been already known
to the Receiving Party prior to its receipt from the
Disclosing Party.
c. To information which is obtained at any time lawfully from a
third party under circumstances permitting its use or
disclosure to others.
d. To information which is developed independently by Receiving
Party as evidenced by written records other than through
knowledge of the Confidential Information.
e. In any event, after the expiration of five (5) years from the
termination date of this Agreement.
f. To information required to be disclosed by the Receiving Party
to comply with a court or administrative order provided the
Receiving Party furnishes prompt notice (in no event more than
3 days) to Disclosing Party to enable it to resist such
disclosure.
8.2.2 The foregoing exceptions to Confidential Information shall not
operate to exclude from Confidential Information any information that (i) is
merely embraced by more general information available on a nonconfidential basis
or, (ii) consists of a combination of features, each of which may be publicly
available, but wherein the combination itself and its principle of operation
constitute Confidential Information because they are not embraced by
corresponding information which is within one of the foregoing exceptions.
ARTICLE IX
16
INDEMNIFICATION
9.1 Indemnification by CDS. CDS shall indemnify, defend, and hold harmless
GEN-PROBE and its Affiliates and their directors, officers, employees, and
agents and their respective successors, heirs and assigns (the "Indemnitees")
against any and all claims, suits, losses, liability, damages, or expenses
resulting from or arising out of CDS's exercise of the licensed rights granted
herein including any sale, manufacture or use of a Licensed Product or
performance of a Licensed Method (including reasonable attorney's fees and
expenses of litigation). This indemnification will include, but not be limited
to, any product liability.
9.2 Notification. GEN-PROBE shall promptly notify CDS in writing of any
claim which GEN-PROBE believes it may have a right of indemnification under this
Agreement.
9.3 Cooperation. GEN-PROBE will provide reasonable cooperation to CDS for
a claim, suit, loss or damage subject to Section 9.1.
ARTICLE X
TERM AND TERMINATION
10.1 Term. This Agreement shall commence on the Effective Date and shall
remain in effect for ten (10) years, unless earlier terminated as provided in
this Article X. Thereafter, this Agreement shall automatically renew for
consecutive one (1) year terms unless one Party gives notice to the other Party
of non-renewal ninety (90) days or more prior to the expiration date.
10.2 Survival. Any termination of this Agreement shall not affect the
following:
a. CDS's obligations that have accrued prior to termination;
b. CDS's continuing obligation to indemnify GEN-PROBE; and
c. GEN-PROBE's or CDS's continuing obligation to maintain the
confidentiality of the terms of this Agreement and any Confidential
Information received from the other Party pursuant to this
Agreement.
10.3 Material Breach By CDS. If CDS should violate or fail to perform any
material term or covenant of this Agreement, GEN-PROBE may give written notice
of such default ("Notice of Default") to CDS. If CDS should fail to take
appropriate steps to cure such default within sixty (60) days of the effective
date of such Notice of Default pursuant to the notice provisions of Section
14.11, GEN-PROBE shall have the right to terminate the license and rights
granted to
17
CDS hereunder by issuing a second written notice ("Notice of Termination") to
CDS. Thereafter, the license and rights previously granted to CDS shall
terminate automatically on the effective date of the Notice of Termination. Such
termination shall not relieve CDS of its obligation to pay any royalty or
license fees owing at the time of termination and shall not impair any accrued
right of GEN-PROBE.
10.4 Material Breach by GEN-PROBE. If GEN-PROBE should violate or fail to
perform any material term or covenant of this Agreement, CDS may give written
notice of such default ("Notice of Default") to GEN-PROBE. If GEN-PROBE should
fail to take appropriate steps to cure such default within sixty (60) days of
the effective date of such Notice of Default pursuant to the notice provisions
of Section 14.11, CDS shall have the right to terminate the license by issuing a
second written notice ("Notice of Termination") to GEN-PROBE. Thereafter, the
license and rights shall terminate automatically on the effective date of the
Notice of Termination. Such termination shall not relieve CDS of its obligation
to pay any royalty or license fees owing at the time of termination and shall
allow CDS to continue to sell Licensed Product, Licensed Methods and Future
Licensed Products which CDS has in inventory for a period not to exceed six (6)
months after the effective date of the Notice of Termination. Any such sales
after the effective date of the Notice of Termination shall be subject to the
provisions of Article IV.
ARTICLE XI
PATENT MARKING
If requested by GEN-PROBE, CDS agrees to xxxx all Licensed Products made,
used or sold under the terms of this Agreement, or their containers, with the
patent number or numbers of any applicable Gen-Probe Patent Rights practiced
thereby to the extent it is not prohibited by law.
ARTICLE XII
EXPORT
12.1 Acknowledgment. The Parties acknowledge that the export of technical
data, materials or products is subject to the exporting Party receiving all
necessary export licenses and that the Parties cannot be responsible for any
delays attributable to export controls which are beyond the reasonable control
of either Party. Each Party covenants and agrees to comply with all applicable
treaties, laws, statutes, rules and regulations of their respective federal,
state or local governmental entity or instrumentality, including, without
limitation, GEN-PROBE's responsibility under the provisions of the United States
Export Administration Act of 1969, as amended, and all other applicable export
laws, restrictions and regulations of the Department of Commerce and the United
States Food and Drug Administration ("FDA") and CDS's responsibility under
Japanese import and export restrictions and requirements. The receiving Party
18
shall provide the exporting Party with any information, materials,
certifications of other documents which may be reasonably required in connection
with such export laws, restrictions and regulations.
12.2 Written Assurance. Without limitation of the foregoing, and in
support of maintaining a general license for the export of technical data under
this Agreement, CDS agrees that the Gen-Probe Patent Rights are for use in Japan
only and will not be knowingly exported from Japan, directly or indirectly,
without CDS first obtaining written permission from GEN-PROBE for such export.
GEN-PROBE agrees that such permission shall include obtaining permission for
export (if required) from the United States Department of Commerce, the FDA
and/or other appropriate United States governmental agencies. CDS shall be
responsible for obtaining permission from any countries to which the export will
be made.
ARTICLE XIII
ARBITRATION
In the event of any Dispute, the Parties shall seek to settle their
differences amicably between themselves, including entering into non-binding
mediation. Any unresolved dispute shall be resolved by final and binding
arbitration in accordance with this Article. Whenever a Party shall decide to
institute arbitration proceedings, it shall give written notice to that effect
to the other Party. The Party giving such notice shall refrain from instituting
the arbitration proceedings for a period of ten (10) days following such notice
to allow the Parties to attempt to resolve the dispute between them. If the
Parties are still unable to resolve the dispute, the Party giving notice may
institute the arbitration proceeding under the rules of Conciliation and
Arbitration of the International Chamber of Commerce as then in effect ("ICC
Rules"). Arbitration shall be held in New York, New York. The arbitration shall
be conducted before three arbitrators, with each Party to select one arbitrator
and with the third arbitrator to be appointed in accordance with ICC Rules. The
arbitrators shall undertake in writing as a condition of service to conduct
proceedings in a speedy and efficient manner, to render the award promptly after
the final arbitration hearing, and further shall confirm in writing to the
President of the Court of Arbitration of the International Chamber of Commerce
that such undertaking is being or has been fulfilled, or shall report the
reasons for any failure of fulfillment, as a condition for any application for
fees. If so requested by either Party, preparation of any Terms of Reference
referred to in ICC Rules shall be waived and the matters in dispute shall be
determined by the arbitrators based on the timely submissions of the Parties.
The arbitrators shall not have the power to award punitive damages or any award
of multiple damages under this Agreement and such awards are expressly
prohibited. Any arbitration award shall be by majority vote and shall be final
and binding on the Parties. Judgment on the award may be entered in any court
having jurisdiction. Except to the extent entry of judgment and any subsequent
enforcement may require disclosure, all matters relating to the
19
arbitration, including the award, shall be held in confidence by the Parties.
Nothing contained in this Article shall prevent either Party from seeking
temporary restraining orders, injunctions or such other relief in any court of
competent jurisdiction.
ARTICLE XIV
MISCELLANEOUS
14.1 Force Majeure. Each of the Parties hereto shall be excused from the
performance of its obligations hereunder in the event performance of this
Agreement is prevented by force majeure and such excuse shall continue as long
as the condition constituting such force majeure continues, plus thirty (30)
days after the termination of such condition. For purposes of this Agreement,
force majeure is defined as follows:
Causes beyond the control of CDS or GEN-PROBE, including acts
of God; war; any regulations, acts, rules, orders, proclamations,
requirements or laws of any government; civil commotion; strike,
lockout or other industrial dispute; destruction of production
facilities or material by fire, water, earthquake or storm; plant
breakdown or failure of equipment; inability to obtain equipment
and/or supplies; epidemics; failure of public utilities or common
carriers; or by any circumstances whatsoever beyond a Party's
reasonable control.
14.2 Specific Performance and Injunction. The Parties agree that
irreparable damage will occur in the event that the provisions of Article VIII
are not specifically enforced. In the event of a breach or threatened breach of
any such provisions, CDS agrees that GEN-PROBE shall, in addition to all other
remedies, be entitled to temporary or permanent injunction, without showing any
actual damage or that monetary damages would not provide an adequate remedy and
without the necessity of posting any bond, and/or a decree for specific
performance, in accordance with the provisions hereof.
14.3 Governing Law. This Agreement will be construed and governed by the
laws of the State of New York, without giving effect to conflict of law
provisions and excluding the United Nations Convention of Contracts for the
International Sale of Goods, except that any arbitration hereunder shall be
governed by Article XIII herein.
14.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
20
14.5 No Third Party Benefits. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the Parties hereto or
their permitted assigns, any benefits, rights or remedies.
14.6 Registration. In the event that this Agreement is required to be
registered with any governmental authority in the Territory, CDS shall cause
such registration to be made and shall bear any expense or tax payable in
respect thereof.
14.7 English Language. The official text of this Agreement shall be in the
English language, and such English text shall be controlling in all respects,
notwithstanding any translation hereof required under the laws and regulations
of the Territory. The Parties undertake to use the English language in respect
of all documents and communications contemplated herein, except where another
language must be used under the laws and regulations of the Territory. In any
such case, a certified English translation shall be supplied to the other Party
by the Party using such documents or making such communication.
14.8 Headings. All headings in this Agreement are for convenience only and
shall not affect the meaning of any provision hereof.
14.9 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the Parties and their respective lawful successors and assigns.
14.10 Compliance With Law. Nothing in this Agreement shall be construed so
as to require the commission of any act contrary to law, and wherever there is
any conflict between any provision of this Agreement and any statute, law,
ordinance or treaty, the latter shall prevail, but in such event the affected
provisions of the Agreement shall be conformed and limited only to the extent
necessary to bring it within the applicable legal requirements.
14.11 Notices. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized international overnight courier, confirmed
facsimile transmission, or registered or certified mail, return receipt
requested, postage prepaid to the following addresses or facsimile numbers:
If to GEN-PROBE: If to CDS:
Gen-Probe Incorporated Chugai Diagnostics Science Co., Ltd.
00000 Xxxxxxx Xxxxxx Xxxxx 00-0, Xxxxxx 0 Xxxxx, Xxxxxxx-Xx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000 Tokyo 171-8545
U.S.A. Japan
Attn: President Attn: President
Facsimile: (000) 000-0000 Facsimile: (0)0-0000-0000
21
Either Party may change its designated address and facsimile number by notice to
the other Party in the manner provided in this Section.
14.12 Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
Parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.
14.13 Severability. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid, or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and the Parties shall negotiate in good faith to modify the Agreement to
preserve (to the extent possible) their original intent.
14.14 Attorneys' Fees. If either Party hereto commences an arbitration or
other action against the other Party to enforce any of the terms hereof or
because of the breach by such other Party of any of the terms hereof, the
prevailing Party shall be entitled, in addition to any other relief granted, to
all actual out-of-pocket costs and expenses incurred by such prevailing Party in
connection with such action, including, without limitation, all reasonable
attorneys' fees, and a right to such costs and expenses shall be deemed to have
accrued upon the commencement of such action and shall be enforceable whether or
not such action is prosecuted to judgment.
14.15 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the Parties relating to the subject
matter hereof.
(The remainder of this page is intentionally left blank)
22
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
GEN-PROBE INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
____________________________
Xxxxx X. Xxxxxxxx
President & Chief Executive Officer
CHUGAI DIAGNOSTICS SCIENCE CO., LTD.
By: /s/ Xxxxx Xxxx
_____________________________
Xxxxx Xxxx
President & Chief Executive Officer
23
EXHIBIT A
GEN-PROBE PATENTS
[12 Pages of Gen-Probe Patents Deleted Pursuant to Confidential Treatment
Request]
24
EXHIBIT B
LICENSED PRODUCTS
[***]
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
36
EXHIBIT C
EXCLUDED VIRAL TARGETS
EXCLUDED ASSAY TARGETS - EACH OF THE VIRUSES INCLUDED IN THIS LIST SHALL INCLUDE
MUTANTS, VARIANTS AND RELATED SUBTYPES
[***]
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
37
EXHIBIT D
EXISTING GEN-PROBE PRODUCTS
AMPLIFIED CHLAMYDIA
AMPLIFIED GONORRHOEAE
DIRECT CHLAMYDIA-GONORRHOEAE
AMPLIFIED MYCOBACTERIUM TUBERCULOSIS
DIRECT MYCOBACTERIUM TUBERCULOSIS
DIRECT GROUP A STREPTOCOCCUS
ACCUPROBE CULTURE IDENTIFICATION MYCOBACTERIA
MYCOBACTERUIM GORDONAE
MYCOBACTERUIM KANSASII
MYCOBACTERUIM TUBERCULOSIS COMPLEX
ACCUPROBE CULTURE IDENTIFICATION FUNGI
BLASTOMYCES DERMATITIDIS CULTURE
COCCIDIOIDES IMMITIS CULTURE
HISTOPLASMA CAPSULATUM CULTURE
ACCUPROBE BACTERIA
CAMPYLOBACTER CULTURE
ENTEROCOCCUS CULTURE
GROUP B STREPTOCOCCUS CULTURE
HAEMOPHILUS INFLUENZAE CULTURE
NEISSERIA GONORRHOEAE
STREPTOCOCCUS PNEUMONIAE CULTURE
STAPHYLOCOCCUS AUREUS CULTURE
LISTERIA MONOCYTOGENES CULTURE
GROUP A STREPTOCOCCUS CULTURE
38
EXHIBIT E
EXCERPTS OF STANFORD AND ORGANON TEKNIKA AGREEMENTS
ADDITIONAL CLAUSES RELATING TO THE STANFORD AGREEMENT
1. DEFINITIONS
The following definitions shall apply within this Exhibit E. All other
defined terms shall have the meanings set forth elsewhere in the License
Agreement between GEN-PROBE and CDS of which this Exhibit E is a part.
1.1 "Invention" shall mean all rights, titles and interest to the
technique of Selective Amplification of Target Polynucleotide Sequences, as
described in Stanford Docket S87-012 and pursuant to 35 U.S.C. 202, and any
Licensed Patent(s), as hereinafter defined, which may issue to such Invention.
1.2 "Licensed Patent(s)" means US Patent No. 5,437,990 issued on August
1, 1995 and any Letters Patent issued upon Stanford's U.S. Patent Application,
Serial Number 080,479 filed July 31, 1987, including the information contained
in such application, with respect to the Invention, any foreign patents
corresponding thereto, and/or any divisions, continuations, or
continuations-in-part, or reissue thereof.
1.3 "Licensed Product(s)" means any Licensed Product (as such term is
defined elsewhere in the License between GEN-PROBE and CDS of which this Exhibit
E is a part), the manufacture, use, or sale of which:
(a) Is covered by a valid claim of an issued, unexpired Licensed
Patent(s) directed to the Invention. A claim of an issued,
unexpired Licensed Patent(s) shall be presumed to be valid
unless and until it has been held to be invalid by a final
judgment of a court of competent jurisdiction from which no
appeal can be or is taken;
(b) Is covered by any claim being prosecuted in a pending
application directed to the Invention.
2. WARRANTY AND NEGATION OF WARRANTIES
2.1 Nothing in this License is or shall be construed as:
(a) A warranty or representation by Stanford as to the validity or
scope of any Licensed Patent(s);
(b) A warranty or representation that anything made, used, sold,
or otherwise disposed of under any license granted in this
39
License is or will be free from of patents, copyrights, and
other rights of third parties;
(c) An obligation to bring or prosecute actions or suits against
third parties for infringement, except that Stanford, CDS, and
GEN-PROBE shall promptly inform each other of any suspected
infringement of any Licensed Patent(s) by another party; or
(d) Granting by implication, estoppel, or otherwise any licenses
under patents of Stanford or other persons other than Licensed
Patent(s), regardless of whether such patents are dominant or
subordinate to any Licensed Patent(s).
2.2 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OR MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED PRODUCT(S)
WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF THIRD
PARTIES.
3. INDEMNITIES
3.1 GEN-PROBE agrees to indemnify, hold harmless, and defend Stanford and
its trustees, officers, employees, students, and agents against any and all
claims for death, illness, personal injury, property damage, and improper
business practices arising out of the manufacture, use, sale, or other
disposition of Invention, Licensed Patent(s), or Licensed Product(s) by
GEN-PROBE, its sublicensees or their customers.
3.2 CDS shall at all times comply, through insurance or self-insurance,
with all statutory workers' compensation and employer's liability requirements
covering any and all employees with respect to activities performed under this
License.
40
EXHIBIT E
ADDITIONAL CLAUSES IN THE STANFORD AND TEKNIKA AGREEMENTS
RELATING TO CONTINUATION OF SUBLICENSES
STANFORD AGREEMENT
The Stanford Agreement sets forth the following terms and conditions
relating to the continuation of sublicenses following termination of the
Stanford Agreement:
4.3.3 Upon termination of this Agreement for any cause, any sublicense
granted hereunder shall continue with STANFORD provided the sublicensee agrees
to thereafter assume the obligations of GEN-PROBE insofar as they correspond to
the scope of the sublicense.
TEKNIKA AGREEMENT
The Teknika Agreement sets forth the following terms and conditions
relating to rights of Gen-Probe's Licensees should a breach by Gen-Probe
terminate its rights under the Teknika Agreement:
10.3 Upon termination of this Agreement, as permitted by Section 10.2, the
non-breaching party shall grant direct immunity from legal action to Licensees
of the breaching party, under the terms and conditions set forth in this
Agreement, provided that:
(a) the non-breaching party shall have received express written
notice of the license granted to such Licensee prior to the
effective termination date of this Agreement;
(b) the Licensee expressly agreed in writing on or before the
ninetieth (90th) day prior to the effective termination date
of this Agreement to be bound by the terms and conditions of
this Agreement.
41
EXHIBIT E
ADDITIONAL TEKNIKA CLAUSES
TRANSCRIPTION-BASED AMPLIFICATION VERSIONS
"GEN-PROBE Version" shall mean transcription-based nucleic acid
amplification using reverse transcriptase, RNA polymerase and [***] wherein
(a) the reverse transcriptase and RNase H activities are provided by
a [***]
(b) said protein has a minimal reverse transcriptase activity of [***]
(where the unit definition and assay conditions are equivalent to those set
forth below); and,
(c) the amplification reaction is performed at [***]
"TEKNIKA Version" shall mean transcription-based nucleic acid
amplification using reverse transcriptase, RNA polymerase and [***] wherein:
(a) [***]
(b) [***] and
(c) the amplification reaction is performed at [***].
ENZYME ASSAYS
[***]
[***]
[***]
[***]
42
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
[***]
Equivalent unit definitions and assay conditions may be substituted as long as
they produce results that may be quantitatively converted by established valid
procedures (e.g., multiplication by a conversion factor or by reference to a
standard curve) to the assay conditions and unit definitions set forth above.
For example, [***]
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
43
[***]
Data supporting equivalence of any substitutions must be made available for
inspection as set forth in Section 3.3 of this Agreement.
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
44
EXHIBIT F
Third Party Royalty Obligations For Gen-Probe Licensees
[***]
[***] The royalty is calculated at the following rates:
ANNUAL PRODUCT NET SALES ROYALTY RATE
[***] [***]
The royalty is calculated on the net sales revenue
received by the licensee.
An offset is applied to these royalties rates that allows
the deduction of other additional third party royalties
payable on the product. However the offset cannot reduce
the royalty rate payable to a rate that is less than [***]
of the applicable royalty. Consequently the lowest royalty
payable after third party deductions would be as follows:
ANNUAL PRODUCT NET SALES ROYALTY RATE
[***] [***]
Royalty payments are made on a quarterly basis. All
GEN-PROBE licensees make payments to [***] through
GEN-PROBE. GEN-PROBE will provide CDS a quarterly
invoice for CDS's indirect royalty payment to [***].
[***]
For all products that employ [***]. A royalty of [***]
on net sales revenue received by the licensee from
product sales of all products that employ [***]. All
GEN-PROBE licensees make payments to [***] through
GEN-PROBE. GEN-PROBE will provide CDS a quarterly
invoice for CDS's indirect royalty payment to [***].
[***]
Gen-Probe pays [***] a royalty of [***] on end user
sales of
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
45
all Gen-Probe [***].
[***]
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
46
