EXHIBIT 10.23
LICENSE AGREEMENT
This License Agreement ("Agreement"), is made and entered into this 24 day of
June, 2002 ("Effective Date"), by and between
DADE BEHRING MARBURG GmbH, a German corporation having its principal place of
business at Xxxx-xxx-Xxxxxxx-Xxxx(xxxx)x 00 , 00000 Xxxxxxx, Xxxxxxx
(hereinafter called "DBM")
and
ILLUMINA INC., a U. S. corporation, having its principal place of business at
0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000-0000, XXX (hereinafter called
"Illumina").
WHEREAS, DBM is the owner of United States Patent No. [*] and its foreign
counterparts; and
WHEREAS, ILLUMINA desires to obtain a worldwide, non-exclusive license to such
patents and patent applications.
NOW, THEREFORE, upon the mutual covenants contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE I - DEFINITIONS
1.1 Wherever used in this Agreement (in singular or plural form),
the terms and phrases set forth below shall have the following meanings:
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*Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
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(a) The term "Party" shall mean either DBM or Illumina, and the
term "Parties" shall mean both DBM and Illumina.
(b) The term "Affiliate(s)" shall mean (1) any corporation owning
or directly or indirectly controlling at least 50% of the stock
normally entitled to vote for election of directors of a Party, and (2)
any corporation owned or directly or indirectly controlled by a (i)
Party or (ii) an entity defined in subsection (b)(1) above, through
ownership of at least 50% of the stock normally entitled to vote for
election of directors; provided, however, in the circumstance where the
country of incorporation of such owned or controlled corporation
requires that maximum foreign ownership be less than 50%, the maximum
permitted percentage of foreign ownership shall be substituted in this
paragraph for 50%.
(c) The term "Effective Date" shall mean the date set forth in
the first paragraph of this Agreement.
(d) The term "Licensed Patent(s)" shall mean those patents and
patent applications which are listed in Exhibit A as well as any
reexamination certificate, reissue, substitution, renewal, extension,
addition, utility model or other patent right, U.S. or foreign, which
has now issued or in the future may issue from any continuation,
continuation in part or divisional application of such patents and
patent applications.
(e) The term "Licensed Product(s)" shall mean any human vitro
diagnostic testing product and any other product whose manufacture,
use, or sale would, but for the license granted under this Agreement,
infringe any claim of a Licensed Patent which claim has not been held
unpatentable, invalid or unenforceable by a decision of a competent
tribunal from which no appeal has or can be taken or which claim has
not been admitted by the patentee to be invalid or unenforceable.
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(f) The term "Licensed Services" shall mean any services
performed by using Licensed Products and any services the performance
of which would in the absence of the license granted herein infringe
any claim of a Licensed Patent which claim has not been held
unpatentable, invalid or unenforceable by a decision of a competent
tribunal from which no appeal has or can be taken, or which claim has
not been admitted by the patentee to be invalid or unenforceable.
(g) The term "Net Sales" shall mean the gross sales value of
Licensed Products billed by Illumina and its Affiliates to third party
customers less taxes, tariffs and value added taxes (VAT) as stated on
the invoice and less 10 % (ten percent) as an average reasonable factor
for all deductible costs attributable to such sales.
These deductible costs included in such factor comprise: customs and
cash discounts, trade discounts or quantity discounts; allowances or
credits to customers on account of settlement of complaints; returns or
retroactive price reductions, duties imposed upon the Licensed Products
(except taxes, tariffs and VAT as hereinabove mentioned), costs for
packaging, freight outwards or transportation insurance, and in the
event that the Licensed Products are sold at an increased price to
recover the costs of supplying a customer with an instrument system
under a reagent rental plan, a reagent agreement plan or other
successor or similar plan, the portion attributable to such costs
recovery.
(h) The term "sale" or "sold" shall mean shall mean to sell,
hire, let, rent, lease or otherwise dispose of to a third party not
being an Affiliate for monetary or other valuable consideration .
(i) The term "Net Service Revenues " shall mean actual xxxxxxxx
by Illumina or its Affiliates for the performance of Licensed Services
less taxes imposed
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upon the Licensed Services as stated on the xxxxxxxx and less
allowances or credits to customers on account of settlement of
complaints.
ARTICLE II - LICENSE GRANT
2.1 Upon the terms and conditions set forth in this Agreement, DBM
grants to Illumina and its Affiliates a worldwide, non-exclusive license
(without the right to sublicense) under the Licensed Patents (i) to make, to
have made, to use, to have used, to import, to have imported, to offer to sell,
to have offered to sell, and to sell and to have sold Licensed Products and to
pass on to direct and indirect purchasers of Licensed Products the right to use
such purchased Licensed Products and (ii) to perform Licensed Services.
2.2 Illumina agrees to apply the patent marking notice specified
by law of any country where a Licensed Patent is issued or pending and where
Licensed Products are made, used or sold, in accordance with the applicable
patent law of that country.
ARTICLE III - ROYALTY
3.1 In consideration of the license granted hereunder, Illumina
shall pay to DBM: (1) a lumpsum of US $[*] ([*] and no/100 US dollars) payable
within sixty (60) days after the execution of this Agreement and (2) a running
royalty of [*] percent of the Net Sales of Licensed Products and (3) a running
royalty of [*] percent of Net Service Revenues.
3.2 Net Service Revenues from Licensed Services and Net Sales from
the sale of Licensed Product between Illumina and its Affiliates shall not be
subject to royalty, but royalty shall be due upon performance of Licensed
Service for or sale of Licensed Product to any person or entity who is not an
Affiliate.
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*Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
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ARTICLE IV - ROYALTY REPORT AND REMITTANCE
4.1 Illumina is obliged to transmit to DBM
(a) not later than sixty (60) days after the Effective Date of
this Agreement,
(i) a written report showing the quantities of
Licensed Products sold and the Licensed Services performed by
Illumina or its Affiliates up to the Effective Date and the
corresponding Net Sales and Net Service Revenues, and
(ii) the royalties due in accordance with Section
3.1; and
(b) within sixty (60) days from the end of each calender half-year
periods of January 1 through June 30 and July 1 through
December 31,
(i) a written report showing the quantities of
Licensed Products sold and Licensed Services performed by
Illumina or its Affiliates during the preceding half-year
period and the corresponding Net Sales and Net Service
Revenues, and
(ii) the royalties due in accordance with Section
3.1.
If there were no royalty bearing manufacture or sales of Licensed Products or
performance of Licensed Services, Illumina has to report so to DBM within said
term. Each such written report or the nil returns shall be sent to the following
address:
Dade Behring Marburg GmbH
Patents and Licenses Department
Xxxx-xxx-Xxxxxxx-Xxxx(xxxx)x 00
00000 Xxxxxxx/Xxxxxxx Xxxxxxxx of Germany
4.2 The amount of royalty due has to be remitted in EURO and
within said term of paragraph 4.1 above to the following account of DBM, by
SWIFT-transfer:
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Dresdner Bank AG, Frankfurt/Main-Hochst
Account No. 770 491 400, BLZ: 500 800 00,
SWIFT-Code DRESDEFF 500.
The obligation to pay shall only be fulfilled on the day on which said amount is
credited to the aforesaid account.
4.3 For the conversion of US dollar into EURO the official spot
selling rate as stipulated by the Wall Street Journal on the business day
immediately preceding the business day on which such royalties were transmitted
to the bank account designated by DBM shall apply. For the conversion of
payments accrued in currencies other than US dollar into EURO the amount of said
payment shall be calculated first in US dollar at the spot-purchasing rate in
accordance with the afore-said procedure and the amount so obtained shall then
be converted into EURO applying the spot selling rate as provided above. If any
payment is delayed, the spot selling rate valid on the last business day of the
corresponding term of payment is to be used.
4.4 On payments in arrears Illumina shall pay interest at the
rate:
1-month-EURO-LIBOR plus 4 percentage points
Any losses suffered by DBM in terms of less favourable exchange rates as a
result of such a delayed payment have to be refunded by Illumina to DBM by
applying the modalities of accounting according to the above Section 4.3.
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ARTICLE V - BOOKKEEPING
5.1 Illumina shall keep and, if applicable, have its Affiliates
keep correct and complete records of account as to the Licensed Products sold
and the Licensed Services performed, containing all information required for the
computation and verification of the Net Sales, Net Service Revenues and of the
royalties to be paid under this Agreement.
5.2 During the term of this Agreement and within a period of two
(2) years after its termination DBM shall have the right to have such records of
account inspected and examined during ordinary business hours through an
independent certified public accountant reasonably acceptable to Illumina.
Illumina shall not need to maintain such records available for audit more than
three (3) years beyond the date of any given royalty report required under
section 4.1 unless such reports are matter of an ongoing dispute between the
Parties. On the request of Illumina the inspection and examination of the
records of account can also be done by the independent certified public
accountant who usually performs the inspection and examination of Illumina's
records of account. The costs for such inspection and examination shall be borne
by DBM; if the license account should be not in order by greater of five percent
(5%) of the amount of the royalties that should have been paid or ten thousand
($10,000) US dollars, the cost shall be borne by Illumina. The provision of this
Article V shall survive for two (2) years after termination of this Agreement or
until the end of an ongoing dispute between the Parties whichever date is later.
ARTICLE VI - TAXES
6.1 All taxes imposed on payments made by Illumina to DBM
according to this Agreement outside the Federal Republic of Germany are to be
borne by DBM up to the tax rate laid down by the double taxation agreement
consisting between the Federal Republic of Germany and the United States of
America. Illumina is allowed to deduct the withholding tax, if any, from said
payments and has promptly to provide DBM with the appropriate tax receipts for
the taxes to be borne by DBM. Illumina is obliged to
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assist DBM in obtaining the limited tax rate according to the double tax treaty
by means of a tax exemption procedure or a tax reimbursement procedure.
6.2 All other taxes, fees, payments or the like required by the
law of any country as a result of the use, manufacture or sale of a Licensed
Product or the performance of Licensed Services including, but not limited to,
any sales or value added taxes shall be the sole responsibility of and shall be
paid by Illumina.
ARTICLE VII - WARRANTIES AND DISCLAIMERS
7.1 DBM warrants that it has the authority to grant the license
granted hereinabove and that such grant does not conflict with any of its legal
obligations.
7.2 Other than as expressly provided in this Agreement, nothing in
this Agreement shall be construed as:
(a) a warranty or representation by DBM as to the
validity, enforceability or scope of any of the Licensed
Patents;
(b) a warranty or representation that anything made,
used, performed, sold, or otherwise disposed of under the
license granted in this Agreement is or will be free from
infringement of patents other than the Licensed Patents;
(c) an obligation to bring or prosecute actions or suits
against third parties for infringement of Licensed Patents;
(d) except as expressly set forth herein, conferring the
right to use in advertising, publicity or otherwise trademark,
trade name or names or any contraction, abbreviation,
simulation or adaptation thereof, of DBM;
(e) conferring by implication, estoppel or otherwise a
license, right or immunity under any patents or patent
applications of DBM or of its Affiliates
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or any patents or patent applications which DBM or its Affiliates
has the power to license other than the Licensed Patents;
(f) an obligation to furnish know-how not provided in the
Licensed Patents; or
(g) creating any agency, partnership, joint venture or
similar relationship between DBM and Illumina.
7.3 Illumina shall hold harmless and indemnify DBM from and
against all claims, demands, actions, liabilities and damages ("Claims") made
by, or awarded to, any person or entity and any costs and expenses thereof
arising from, or connected with, the manufacture, use, sale or other disposal of
the Licensed Products or the performance of Licensed Services or the provision
or use of the Licensed Patents or otherwise arising out of the grant of any
rights hereunder or the provision of any information in connection herewith, but
only to the extent such Claims do not result from the gross negligence or
intentional misconduct of DBM. In the event that DBM seeks indemnification under
the Section 7.3, it shall inform Illumina as soon as reasonably practicable
after it becomes aware of any Claim, shall permit Illumina to assume direction
and control of the defense of the Claim (including the right to settle the Claim
solely for monetary consideration) and shall cooperate as reasonably requested
in the defense of the Claim.
7.4 DBM shall not be liable to Illumina, its Affiliates or any
direct or indirect customer of Illumina for any damage or loss of whatsoever
nature sustained by Illumina, its Affiliates or any direct or indirect customer
of Illumina or for third party's claims against Illumina, its Affiliates or
any direct or indirect customer of Illumina arising out of or in connection with
or related to the performance of this Agreement, except to the extent such
damages or losses arise out of or are related to the gross negligence or
intentional misconduct by DBM.
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7.5 NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER
PARTY ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES,
INCLUDING WITHOUT LIMITATION LOST PROFITS, IN CONNECTION WITH THE AGREEMENT OR
ANY LICENSE GRANTED HEREUNDER, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF
SUCH DAMAGES.
7.6 Nothing in this Agreement shall be construed as a warranty or
representation by DBM as to the Licensed Products and Licensed Services, their
quality, their technical properties and commercial viability or any other
aspects thereof.
7.7 DBM MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF LICENSED PRODUCTS AND/OR LICENSED
SERVICES.
7.8 The provision under this Article VII shall survive the
termination of this Agreement.
ARTICLE VIII - SEVERABILITY
8.1 Should one or several provision(s) of this Agreement be or
become invalid, then the Parties hereto shall substitute such invalid provisions
by valid ones, which in their economic effect come so close to the invalid
provisions that it can be reasonably assumed that the Parties would also have
concluded this Agreement with this new provision. In case such a provision
cannot be found, the invalidity of one or several provisions of this Agreement
shall not affect the validity of the Agreement as a whole, unless the invalid
provisions are of such essential importance for this Agreement that it is to be
reasonably assumed that the Parties would not have concluded this Agreement
without the invalid provisions.
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ARTICLE IX - GOVERNING LAW - VENUE
9.1 This Agreement shall be interpreted and construed, and the
legal relations created herein shall be determined, in accordance with the laws
of the Federal Republic of Germany. Venue for juridical proceedings shall be
Dusseldorf, Germany
ARTICLE X - ASSIGNMENT
10.1 This Agreement shall be binding and inure to the benefit of
the Parties and to their successors and permitted assigns. Either DBM or
Illumina may, at its sole discretion, assign this Agreement or transfer all of
its rights under this Agreement to any Affiliate, or cause any Affiliate to have
the benefit of all of its rights hereunder. Either Party may assign or transfer
all of its rights under this Agreement as a part of the sale of the business to
which it relates. In the case of an assignment, the performance of the assignee
will be guaranteed by the assignor. Neither this Agreement nor any interest
herein is otherwise assignable or transferable by Illumina without prior written
approval of DBM. This Agreement is fully assignable by DBM.
ARTICLE XI - UNLICENSED COMPETITORS - ASSISTANCE OF ILLUMINA
11.1 Illumina shall inform DBM of third parties which to the best
of Illumina' knowledge infringe Licensed Patents and, upon request of DBM, shall
reasonably assist DBM, e. g. by supplying information and evidences, in
enforcing DBM to stop infringement and unlicensed competition either by granting
licenses at reasonable conditions or by taking legal action or otherwise. It is
understood, however, that it is at the sole discretion of DBM whether and what
action shall be taken to avoid unlicensed competition.
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ARTICLE XII - FORCE MAJEURE
12.1 All cases of force majeure which shall include but not be
restricted to fire, flood, earthquake, explosion, riot, strike, lock-out, acts
of terrorism, war and regulations of any governmental or local authority shall,
for the duration of and to the extent of the effects caused by such incidents,
release the Parties from the performance of their contractual obligations,
except the obligation to pay royalty as provided for under Article III and
Article IV.
12.2 Either Party shall notify the other Party without delay of any
such incident occurring and the Parties shall discuss the effects of such
incidents on this Agreement and the measures to be taken.
12.3 Either Party shall use its best efforts to reasonably avoid or
restrict any detrimental effects. The Parties shall as soon as reasonably
possible, resume performance of their obligations provided, however, that
neither Party shall, in order to prevent or terminate a strike or lock-out, take
the measures which it does not deem reasonable.
ARTICLE XIII - CONFIDENTIALITY
13.1 Both Parties undertake to keep secret any and all information
received under this Agreement and to obligate also its employees to the same
extent and to the extent legally permissible, even for the time after their
employment. This obligation shall not apply, however, to such information for
which the receiving Party proves that it was already known to it prior to its
receipt or that it will become known by publication or otherwise become lawfully
available or that it is required to be disclosed under any applicable law,
regulations or governmental order. The provision of this Article XIII shall
survive the termination of this Agreement for five years.
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ARTICLE XIV - DURATION - TERMINATION
14.1 This Agreement shall come into force and effect after it has
been executed, i.e. signed by both Parties.
Unless sooner terminated, it shall continue to be in force and effect for each
country covered under this Agreement until expiration of the Licensed Patents in
such country. The expiration of a Licensed Patent in any given country shall not
affect the effectiveness or non-effectiveness of this Agreement in any other
country.
14.2 If a Licensed Patent in a country will be revoked, withdrawn
or becomes otherwise abandoned by a final decision which cannot be appealed, the
obligation to pay royalty for the license under such Licensed Patent for such
country shall cease effective as of the date of such final decision. Royalties
which have been paid under such Licensed Patent before such final decision will
not be returned, neither totally nor in part; and DBM has no obligation
whatsoever to make compensation for the royalty payments made before the date of
such final decision.
14.3 Illumina shall have the right to terminate this Agreement by
giving six (6) months prior written notice to DBM.
14.4 DBM shall have the right to terminate this Agreement
immediately by giving six (6) months prior written notice if for reasons other
than Force Majeure during a period of twenty four (24) months or more no
Licensed Products have been sold and no Licensed Services performed and no
running royalty payment was due and has been made, or if Illumina suspends
payment of its debts or enters into or becomes subject to corporate
rehabilitation procedures, liquidation, dissolution or bankruptcy proceedings
(that are not dismissed within sixty (60) days of the initiation of such
proceedings).
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14.5 Each Party shall have the right to terminate this Agreement
immediately by written notice to the other Party if said other Party commits a
material breach of the terms of this Agreement and fails to correct such
material breach within sixty (60) days following receipt of written notice of
such breach pursuant to Section 15.4.
14.6 Termination of this Agreement for any reason including
termination due to lapse of time shall not relieve Illumina of its obligation to
make payments of any royalty due under this Agreement prior to the effective
date of such termination or to provide to DBM any report with respect thereto.
This Section 14.6 shall survive termination of this Agreement.
ARTICLE XV - MISCELLANEOUS
15.1 The Parties agree to execute, acknowledge and deliver all such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the intent and purposes of this Agreement.
15.2 This Agreement including Exhibit A constitutes the entire
agreement and understanding between the Parties and supersedes any prior
agreements and understandings with respect to the Licensed Products and Licensed
Services.
15.3 A waiver of any breach of any provision of this Agreement
shall not be construed as a continuing waiver of other breaches of the same or
other provisions of this Agreement.
15.4 Notices required under this Agreement shall be in writing and
shall for all purposes be deemed to be fully given and received if sent by
registered mail, postage prepaid, return receipt requested, to the respective
Party at the following addresses (or at such other address as either Party may
hereinafter designate in writing):
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If to DBM:
Dade Behring Marburg GmbH
Patents and Licenses
Xxxx-xxx-Xxxxxxx-Xxx. 00
00000 Xxxxxxx
Xxxxxxx Xxxxxxxx of Germany
If to Illumina :
Illumina Inc.
Chief Executive Officer
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
15.5 The Parties are independent contractors and nothing contained
herein shall constitute either Party as the agent of the other or shall make the
Parties partners for any purpose. Neither Party shall, without the consent of
the other Party, take any action that purports to be the action of, or to be
binding upon, the other Party.
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IN WITNESS WHEREOF, the Parties have affixed their signatures on the dates
indicated below to two (2) duplicate originals, each of which shall be
considered an original.
DADE BEHRING MARBURG GMBH
By: ./s/ X. XXXXX /s/ X. XXXXXXXX
Xx. X. Xxxxx Xx. X. Xxxxxxxx
Title: Vice President & Director
Managing Director Patents & Licenses
Date: July 1, 2002
ILLUMINA INC.
By: /s/ XXXX X. XXXXXXXXXXX
Title: Sr. Vice President, Operations
Date: July 2, 2002
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EXHIBIT A
COUNTRY APP. NO. FILE DATE PATENT NO. GRANT DATE
------------------------ -------- ----------- ---------- -----------
Canada [*] 24-Aug-1989 [*] 00-Xxx-0000
Xxxxxxx [*] 24-Aug-1999 [*] 05-Oct-1994
France [*] 24-Aug-1989 [*] 05-Oct-1994
Great Britain [*] 24-Aug-1989 [*] 05-Oct-1994
United States of America [*] 25-Aug-1988 [*] 00-Xxx-0000
Xxxxxx Xxxxxx xx Xxxxxxx [*] 10-Mar-1995 [*] 14-May-1996
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*Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
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