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LICENSE AGREEMENT
THIS LICENSE AGREEMENT (hereinafter "AGREEMENT"), effective as of the
EFFECTIVE DATE (as defined below), is entered into by and between Progenitor,
Inc., a Delaware corporation having principal offices at 0000 Xxxxxxxx Xxxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000 (hereinafter "PROGENITOR") and SmithKline Xxxxxxx
Clinical Laboratories, Inc., a Delaware corporation having principal offices at
0000 Xxxxx Xxxxxxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter
"SBCL").
WHEREAS, PROGENITOR is the owner of all right, title and interest in
certain patents, identified in EXHIBIT A hereto, and know-how relating to
methods for the diagnosis of and/or screening for human hereditary
hemochromatosis;
WHEREAS, SBCL desires to obtain certain licenses in certain countries of
the world from PROGENITOR to develop and commercialize tests for the diagnosis
of and/or screening for human hereditary hemochromatosis in such countries under
the aforesaid patents and know-how, and PROGENITOR is willing to grant to SBCL
such licenses under terms and conditions set forth below.
NOW, THEREFORE, in consideration of the following, and intending to be
legally bound, PROGENITOR and SBCL agree as follows:
1. DEFINITIONS
In this AGREEMENT, unless otherwise provided, the following terms shall
have the meaning set forth in this section.
1.1. AFFILIATE
The term "AFFILIATE" shall mean any corporation or other business entity
controlled by, controlling or under common control with either PROGENITOR or
SBCL. For purposes of this Section 1.1, "control" shall mean direct or indirect
beneficial ownership of greater than fifty percent (50%) of the voting stock or
equity, or greater than fifty percent (50%) interest in the income of such
corporation or other business entity; provided that, if local law requires a
minimum percentage of local ownership, control will be established by direct or
indirect beneficial ownership of one hundred percent (100%) of the maximum
ownership percentage that may, under such local law, be owned by foreign
interests.
1.2. EFFECTIVE DATE
The term "EFFECTIVE DATE" shall mean the effective date of this
AGREEMENT and shall be the date upon which this agreement is executed by both
parties.
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1.3. HOME-BREW
The term "HOME-BREW" shall mean any diagnostic or screening test or
assay performed in a clinical laboratory for purposes of providing a service for
detecting a human genetic mutation related to human hereditary hemochromatosis
(and not packaged as a product for sale) which, if performed in the United
States, would not be subject, as of the EFFECTIVE DATE, to regulation by the
United States Food and Drug Administration.
1.4. KNOW-HOW
The term "KNOW-HOW" shall mean all present and future technical
information and know-how which relates to an ASSAY which is confidential or is
not in the public domain and shall include, without limitation, all biological,
chemical, pharmacological, toxicological, clinical, assay, control and
manufacturing data, and biological material samples required for ASSAY
development purposes, and any other information relating to an ASSAY and useful
for the development and commercialization of an ASSAY.
1.5. KIT
The term "KIT" shall mean any set of components or reagents provided,
together as a unit, to a THIRD PARTY for the purpose of performing a diagnostic
or screening test or assay for detecting a human genetic mutation related to
human hereditary hemochromatosis which has been approved by the federal Food and
Drug Administration (or its equivalent outside of the U.S.A. if required) for
diagnosis or screening clinical use.
1.6. PATENTS
The terms "PATENTS" shall mean all patents and patent applications which
are or become owned by PROGENITOR, or to which PROGENITOR otherwise has, now or
in the future, the right to grant licenses, which generically or specifically
claim an ASSAY or its components, a process for manufacturing an ASSAY or its
components, an intermediate used in making or using the ASSAY or its components,
or a use of an ASSAY for detecting a human genetic mutation related to human
hereditary hemochromatosis. Included within the definition of PATENTS are all
continuations, continuations-in-part, divisions, patents of addition, reissues,
re-examinations, renewals or extensions thereof and all SPCs (i.e., a right
based upon a PATENT to exclude others from making, using, importing or selling
ASSAY, such a Supplementary Protection Certificate). Also included within the
definition of PATENTS are any patents or patent applications which generically
or specifically claim any improvements on an ASSAY, or its components, or
intermediates or manufacturing processes required or useful for production of an
ASSAY or its components which are developed by PROGENITOR, or which PROGENITOR
otherwise has the right to grant licenses, now or in the future, during the term
of this AGREEMENT. The current list of patent applications and patents
encompassed within PATENTS is set forth in EXHIBIT A which is attached hereto
and fully incorporated herein.
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1.7. ASSAY
The term "ASSAY" shall mean any HOME-BREW covered by an ENFORCEABLE
CLAIM.
1.8. TERRITORY
The term "TERRITORY" shall mean the United States of America, Mexico,
the United Kingdom, France, Germany, Spain, South Africa, Australia, Malaysia,
Singapore, Indonesia, Thailand, Brazil, Bolivia, Paraguay, Uruguay, Argentina,
Chile, Peru, Ecuador, Columbia, Venezuela, Guyana, Surinam, French Guyana,
Galapagos Islands, Falkland Islands, South Georgia, Belize, Costa Rica, El
Salvador, Guatemala, Honduras, Nicaragua and Panama.
1.9. ENFORCEABLE CLAIM
The term "ENFORCEABLE CLAIM" shall mean either (i) any claim in an
issued patent within PATENTS that has not expired or been held or otherwise
determined to be invalid or unenforceable by a court or administrative agency of
competent jurisdiction and of last resort from which no further appeal may be
taken or is available, or (ii) a pending claim in a patent application within
PATENTS filed with the United States Patent and Trademark Office (or foreign
equivalent) either prior to EFFECTIVE DATE or during the term of this AGREEMENT,
provided that such patent application is diligently prosecuted during the term
of this AGREEMENT.
1.10. THIRD PARTY(IES)
The term "THIRD PARTY(IES)" shall mean any party other than SBCL and
PROGENITOR and their AFFILIATES.
2. GRANTS
2.1. EXCLUSIVE LICENSE
(a) Subject to the terms and conditions of this AGREEMENT, PROGENITOR hereby
grants to SBCL an exclusive right and license including, without limitation, the
right to grant sublicenses, under PATENTS and KNOW-HOW to make, use, have made,
and import materials or components for the sole purpose of developing ASSAYS,
and offering to sell, selling, and performing HOME-BREW in the TERRITORY. (* *
*) The right and license to make, use, have made, import and sell shall include
all activities related to offering to sell, selling, having made, and performing
HOME-BREW in the TERRITORY concerning the subject matter of PATENTS and KNOW-HOW
which activities would, but for the right and license herein granted, infringe
an ENFORCEABLE CLAIM. These rights shall include the right to contract with
THIRD PARTIES for the purpose of running of ASSAYS and for the purpose of
making, having made, using and selling components of ASSAYS for the benefit of
SBCL or its AFFILIATES which THIRD
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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PARTIES, for purposes of this AGREEMENT, shall be deemed not to be sublicensees
of SBCL and Section 2.1(b)(iv) shall not apply.
(b) (i) Any agreement whereby SBCL grants a sublicense to a THIRD
PARTY under this Section 2.1 shall include terms and conditions which are no
less restrictive and no more expansive than as set forth in this Agreement. (ii)
Any such sublicense shall provide expressly that SBCL and SBCL's sublicensee
intend that PROGENITOR shall benefit from, and shall be entitled to enforce the
provisions of, such agreement. (iii) Within thirty (30) days after the effective
date of any THIRD PARTY sublicense granted by SBCL under this Section 2.1, SBCL
shall provide to PROGENITOR, in writing, a notice of the identity of the
sublicensee.
2.2. NONEXCLUSIVE LICENSE
Subject to the terms and conditions of this AGREEMENT, at any time (* *
*), SBCL, upon SBCL's written election, may convert in such country the
exclusive right and license granted by PROGENITOR pursuant to Section 2.1 to a
nonexclusive, nontransferable right and license. Such right and license shall
not include a right to grant sublicenses other than the right to grant
sublicenses to AFFILIATES. The effective date of such conversion shall be the
date of receipt by PROGENITOR of written notice of SBCL's election under this
Section 2.2.
2.3. RIGHT OF NEGOTIATION
Subject to the terms and conditions of this AGREEMENT, PROGENITOR hereby
grants to SBCL a right of negotiation to obtain a right and license under
PATENTS and KNOW-HOW, and all other appropriate patents and know-how owned or
controlled by PROGENITOR, to make, have made, use, offer to sell, sell and
import KITS in the TERRITORY, such right to extend until the earlier of either
(i) the date which is 90 days after the date of initiation of sales of services
utilizing an ASSAY anywhere in the TERRITORY , or (ii) the date which is 180
days after the EFFECTIVE DATE (the "DATE"). PROGENITOR will not enter into an
agreement with any THIRD PARTY whereby PROGENITOR would grant a right and
license under any such patents or know-how to make, have made, use, offer to
sell, sell and import KITS in the TERRITORY prior to the DATE. At any time prior
to the DATE, SBCL or PROGENITOR may initiate good faith negotiations to grant
SBCL a right and license under PATENTS and KNOW-HOW, and all other appropriate
patents and know-how owned or controlled by PROGENITOR, to make, have made, use,
offer to sell, sell and import KITS in the TERRITORY. If SBCL and PROGENITOR
have not agreed upon the material commercial terms of such right and license
prior to the DATE, PROGENITOR may enter into any agreement with any THIRD PARTY
granting a right and license under PATENTS and KNOW-HOW, and all other
appropriate patents and know-how owned or controlled by PROGENITOR, to make,
have made, use, offer to sell, sell and import KITS in the TERRITORY.
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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2.4. NO OTHER RIGHTS
Except as expressly provided herein, no right, title, or interest is
granted by PROGENITOR to SBCL in, to or under PATENTS and KNOW-HOW or in or to
an ASSAY or in or to a KIT, or any components thereof.
3. CONSIDERATION
3.1. INITIAL FEE
In partial consideration for the rights and license granted pursuant to
Section 2, within thirty (30) days after the EFFECTIVE DATE, SBCL shall pay to
PROGENITOR an initial fee equal to (* * *). Such fee shall be creditable against
royalties due and payable to PROGENITOR pursuant to Section 3.5 during the
(***).
3.2. EXCLUSIVE LICENSE ANNUAL FEES
(a) In partial consideration for the rights and license granted
pursuant to Section 2.1, SBCL shall pay to PROGENITOR an annual fee to be paid
within thirty (30) days after the occurrence of the following:
(i) First Anniversary of EFFECTIVE DATE U.S. $(***)
(ii) Second Anniversary of EFFECTIVE DATE U.S. $(***)
(iii) Third Anniversary of EFFECTIVE DATE U.S. $(***)
(iv) Fourth Anniversary of EFFECTIVE DATE U.S. $(***)
(v) Fifth Anniversary of EFFECTIVE DATE U.S. $(***)
(b) Annual fees actually paid pursuant to Section 3.2(a) shall be
nonrefundable to SBCL except that (i) in the event of a conversion of the
exclusive right and license granted to SBCL hereunder to a nonexclusive right
and license which occurs earlier than the expiration of the annual period for
which such fee was paid, such annual fee shall be prorated for the remaining
annual period, and the unused amount shall be fully creditable against future
payments due to PROGENITOR for the remaining term of the AGREEMENT, and any
portion not fully credited at the expiration or termination of the AGREEMENT
shall be refunded to SBCL no later than thirty (30) days after such expiration
or termination, and no further annual payments will accrue, and (ii) in the
event of any termination or expiration of this AGREEMENT which occurs earlier
than the expiration of the annual period for which such fee was paid, such
annual fee shall be prorated for the remaining annual period, and the unused
amount shall be fully refunded to SBCL no later than thirty (30) days after such
expiration or termination, unless this AGREEMENT is terminated as a result of
action by SBCL other than as a consequence of a material breach or default by
PROGENITOR. Furthermore, such annual fees shall be
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treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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creditable against royalties due and payable to PROGENITOR pursuant to Section
3.5; provided, however, than any such annual fee shall be creditable (* * *).
3.3. SUBLICENSE ROYALTIES.
Royalties based on actual use of an ASSAY by a sublicensee of SBCL shall
be paid to PROGENITOR by SBCL in accordance with Section 3.5 or Section 3.6.
3.4. NONEXCLUSIVE LICENSE FEES.
In partial consideration for the nonexclusive rights and license held by
SBCL after SBCL's election pursuant to Section 2.2, or in the event SBCL's
exclusive license is converted to a nonexclusive license as a result of Section
9.1(b), SBCL shall pay to PROGENITOR an annual fee equal to (* * *) per annual
period following the conversion of SBCL. The first such fee shall be due and
shall be paid within thirty (30) days after the date of SBCL's written notice to
PROGENITOR pursuant to Section 2.2 or the effective date of the conversion under
Section 9.1(b), subject to any credit remaining under Section 3.2(b).
Thereafter, each such annual fee shall be due and shall be paid within thirty
(30) days after the date of each twelve (12) month anniversary of the date of
SBCL's written notice under Section 2.2, subject to any credit remaining under
Section 3.2(b). Fees paid to PROGENITOR under this Section 3.4 shall be
creditable against royalties due and payable to PROGENITOR pursuant to Section
3.6; provided, however, that such fee shall be creditable (* * *), except that
in the event of any termination or expiration of this AGREEMENT which occurs
earlier than the expiration of the annual period for which such fee was paid,
such annual fee shall be prorated for the remaining annual period, and the
unused amount shall be fully refunded to SBCL no later than thirty (30) days
after such expiration or termination unless this AGREEMENT is terminated as a
result of action by SBCL other than for material breach or default by
PROGENITOR.
3.5. EXCLUSIVE LICENSE ROYALTIES
In partial consideration for the exclusive rights and license granted
pursuant to Section 2.1, and subject to any credit that may be due SBCL under
Section 3.2(b), SBCL shall pay to PROGENITOR royalties in accordance with the
following:
(A) (* * *) for each use of an ASSAY in each human sample
analysis conducted in a country of the TERRITORY either by SBCL, its AFFILIATES
or a sublicensee of SBCL from which SBCL derives revenue in such country
provided such ASSAY is covered by an ENFORCEABLE CLAIM of an issued patent or a
pending but enforceable patent application within such country, provided there
is no Substantial Competition; or
(B) (* * *) for each use of an ASSAY in each human sample
analysis conducted in a country of the TERRITORY either by SBCL, its AFFILIATES
or a sublicensee of SBCL from which SBCL derives revenue in such country
provided such ASSAY is either (i) claimed in an unenforceable pending patent
application within such country, or
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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(ii) covered by an ENFORCEABLE CLAIM of an issued patent or a pending but
enforceable patent application within such country and Substantial Competition
exists in such country.
"Substantial Competition," as used herein, exists when the combined volume sales
in a particular country of the TERRITORY of all THIRD PARTY assays for detecting
human hereditary hemochromatosis equals at least (* * *) of SBCL's or its
AFFILIATES or sublicensees volume market share of ASSAYS in such country
(compared to actual volume sales from the previous calendar year). A
determination of the existence of Substantial Competition in a country during
any calendar year shall be applied retroactively to the royalty payments due for
each use of an ASSAY in such country during such calendar year in accordance
with Section 4.2(c). Substantial Competition will be evaluated by SBCL on an
annual basis.
The phrase "in each human sample analysis conducted either by SBCL, its
AFFILIATES or a sublicensee of SBCL from which SBCL derives revenue" as used in
this Section 3.5 and in Section 3.6 shall not include (* * *). Further, the
phrase "from which SBCL derives revenue" as used in this Section 3.5 and in
Section 3.6 shall (* * *).
If SBCL decides, using its reasonable business judgment, that the consideration
under this Section 3.5 is no longer commercially reasonable, SBCL will notify
PROGENITOR in writing, and the parties shall meet and renegotiate SBCL's payment
obligations under this AGREEMENT in good faith.
3.6. NONEXCLUSIVE LICENSE ROYALTIES
In the event that SBCL elects to convert the exclusive right and
license granted by PROGENITOR in a particular country of the TERRITORY pursuant
to Section 2.1 to a nonexclusive, non-transferable right and license in
accordance with Section 2.2, or in the event such conversion occurs as a result
of Section 9.1(b), Section 3.5 shall not apply and SBCL, in partial
consideration for such nonexclusive rights and license, and subject to any
credit that may be due SBCL under Section 3.2(b) or Section 3.4, shall pay to
PROGENITOR royalties equal to (* * *) for each use of an ASSAY in such country
in each human sample analysis conducted either by SBCL, its AFFILIATES or a
sublicensee of SBCL from which SBCL derives revenue in such country. If
PROGENITOR in any country of the TERRITORY grants a nonexclusive license to any
THIRD PARTY for an ASSAY, SBCL shall have the benefit in such country of the
terms granted to such THIRD PARTY to the extent that such terms are more
favorable when viewed as a whole than those of this AGREEMENT.
3.7. THIRD PARTY ROYALTIES
(a) During the term of this AGREEMENT, if either PROGENITOR or SBCL becomes
aware of patent rights owned or controlled by a THIRD PARTY which may relate to
carrying out the ASSAY or utilizing components thereof, such party shall notify
the other party promptly in writing to the extent that such party is not
prohibited from
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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doing so by an obligation of confidentiality to a THIRD PARTY which disclosed
such information to such party.
(b) (* * *)
(c) In the event that PROGENITOR enters into such a license
agreement with a THIRD PARTY to obtain from such THIRD PARTY any rights and
license necessary for SBCL, its AFFILIATES and sublicensees to carry out the
ASSAY or utilize components thereof, SBCL shall reimburse to PROGENITOR (* * *)
paid by PROGENITOR to any THIRD PARTY as a result of the exercise of the license
herein granted, in a particular country of the TERRITORY, provided that the
license acquired by PROGENITOR from such THIRD PARTY was as a result of a
necessity determination in accordance with Section 3.7(b), and further provided
that, in no event shall such reimbursement exceed (* * *) in such country of an
ASSAY in each human sample analysis conducted either by SBCL, its AFFILIATE or a
sublicensee of SBCL from which SBCL derives revenue. The phrase "in each human
sample analysis conducted either by SBCL or a sublicensee of SBCL from which
SBCL derives revenue" as used in this Section 3.7 shall not include (* * *).
(d) PROGENITOR shall keep accurate records in sufficient detail
to enable royalties paid by PROGENITOR to THIRD PARTIES for each use of an ASSAY
in each human sample analysis conducted either by SBCL, its AFFILIATE or a
sublicensee of SBCL from which SBCL derives revenue in accordance with this
Section 3.7 to be determined. Such records shall be maintained by PROGENITOR at
PROGENITOR's principal place of business for at least two (2) years after the
period covered by such records. Within forty-five (45) days after receiving a
report from PROGENITOR regarding the payment of such royalties to such THIRD
PARTIES, SBCL shall make the reimbursement to PROGENITOR for such royalties
provided for in this Section, subject to any credit which may be due SBCL under
Sections 3.2(a), 3.2(b) and/or 3.4.
3.8. CURRENCY
All payments to be made by one party to another party hereunder shall be
made in United States of America dollars. If governmental regulations prevent
remittances from a foreign country with respect to sales made in that country,
the obligation of SBCL to pay royalties on sales in that country shall be
suspended until such remittances are possible. PROGENITOR shall have the right,
upon giving written notice to SBCL, to receive payment in that country in local
currency.
3.9. TAXES
Any tax, duty or other levy paid or required to be withheld by SBCL or
its AFFILIATES or sublicensees on account of royalties payable to PROGENITOR
under this AGREEMENT shall be deducted from the amount of royalties otherwise
due. SBCL shall
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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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secure and send to PROGENITOR proof of any such taxes, duties or other levies
withheld and paid by SBCL or its AFFILIATES or sublicensees for the benefit of
PROGENITOR.
4. REPORTS AND AUDIT RIGHTS
4.1. RECORDS
SBCL shall keep, and shall require SBCL's sublicensees to keep, accurate
records in sufficient detail to enable royalties and other payments due
PROGENITOR hereunder to be determined. Such records shall be maintained by SBCL
at SBCL's principal place of business for at least two (2) years after the
period covered by such records.
4.2. REPORTS
Within thirty (30) days after the first day of each calendar quarter,
SBCL shall:
(a) deliver to PROGENITOR a written report containing information
and data concerning the number of ASSAYS SBCL, its AFFILIATES and its
sublicensees have performed during the relevant period in each country in the
TERRITORY.
(b) deliver to PROGENITOR a written report containing information
and data concerning the total amount due and payable to PROGENITOR hereunder for
SBCL's, its AFFILIATES' and its sublicensees' activities during such calendar
quarter; and
(c) pay to PROGENITOR the full amount of royalties and other
payments due to PROGENITOR hereunder for SBCL's its AFFILIATES' and its
sublicensees' activities during the calendar quarter covered by such report,
subject to any credit which may be due SBCL under Sections 3.2(a), 3.2(b), 3.4
and/or 3.5(b) (with respect to any retroactive application of set off against
the royalty obligation in Section 3.5(b) as a result of a determination of the
existence of Substantial Competition in a particular country duirng the
immediately preceding calendar year).
Payment of royalties and other payments due and payable to PROGENITOR
but not paid when due shall accrue interest at the prime commercial lending rate
prevailing on the payment due date at the Bank of America, San Francisco,
California.
4.3. AUDIT RIGHTS
During the term of this AGREEMENT and for six (6) months after its
termination, after receipt by SBCL of PROGENITOR's written request and after
reasonable prior notice, SBCL shall permit an independent certified public
accountant, selected by PROGENITOR and reasonably acceptable to SBCL, to examine
SBCL's and SBCL's sublicensees' records to determine the accuracy of any report
delivered or payment made by SBCL to PROGENITOR hereunder. Only one such
examination may be made in each year and shall not cover records for more than
the preceding two (2) years, and further provided that such accountant shall
report to PROGENITOR only as to the accuracy of the royalty
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statements and payments. Except as otherwise provided below, the cost and
expense of such examination shall be borne by PROGENITOR. If any such
examination determines that additional payment amounts are owed to PROGENITOR
for any period, SBCL shall pay such additional payment amounts to PROGENITOR
promptly. If any such examination determines that an overpayment has been made
to PROGENITOR for any period, PROGENITOR shall reimburse such overpayment amount
to SBCL promptly. In addition, if any such examination reveals that SBCL
underpaid PROGENITOR by an amount equal to or greater than 10% of the total
amount due PROGENITOR in any reporting period, the reasonable cost and expense
of such examination shall be borne by SBCL.
5. DILIGENCE AND OTHER OBLIGATIONS OF SBCL
5.1. MANUFACTURING AND DISTRIBUTION
SBCL shall bear all costs and expenses associated with making, having
made, using and importing an ASSAY or its components for the purpose of offering
to sell, selling, and performing HOME-BREW in the TERRITORY.
5.2. MARKETING DILIGENCE
(a) SBCL shall use reasonable efforts to promote and develop a
commercial market for performing HOME-BREW in the TERRITORY utilizing an ASSAY
using the same standards SBCL would use in promoting and developing an ASSAY of
its own making which had the same technical and commercial potential as an
ASSAY. Notwithstanding the above, SBCL shall have satisfied its obligations to
use such reasonable efforts, within the relevant country of the TERRITORY, upon
the occurrence of the following:
(i) Initiating and thereafter continuing sales of services
utilizing an ASSAY to THIRD PARTY customers upon which royalties are to be paid
to PROGENITOR in the United States of America within (* * *) after the EFFECTIVE
DATE;
(ii) Initiating and thereafter continuing sales of services
utilizing an ASSAY to THIRD PARTY customers upon which royalties are to be paid
to PROGENITOR in each of Mexico, the United Kingdom, and Australia within (* *
*) after the EFFECTIVE DATE; and
(iii) Initiating and thereafter continuing sales of services
utilizing an ASSAY to THIRD PARTY customers upon which royalties are to be paid
to PROGENITOR in the relevant country in the TERRITORY which is not mentioned in
Section 5.2(a)(i) or (ii) within (* * *) after the EFFECTIVE DATE.
(b) If SBCL fails to initiate sales of services in any country of
the TERRITORY in accordance with the schedule set forth in Section 5.2(a) and
subject to Section 5.2(c), PROGENITOR shall be entitled to terminate any right
and license then held by SBCL in such country under PATENTS and KNOW-HOW to
make, have made, use and
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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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import an ASSAY for the purpose of offering to sell, selling and performing
HOME-BREW in such country, such termination to be effective, with no opportunity
to cure, upon receipt by SBCL of written notice of such termination by
PROGENITOR, provided such termination shall not be effective if SBCL has
initiated sales of such services in such country at the time SBCL receives such
notice from PROGENITOR. In the event that SBCL initiates sales of services in a
country of the TERRITORY in accordance with the schedule set forth in Section
5.2(a), but thereafter fails to continue sales of such services, and such
failure is due (i) to circumstances which are within SBCL's reasonable control
and (ii) continues for more than (* * *), unless SBCL is proceeding as
diligently as reasonably possible, PROGENITOR shall be entitled, at its
discretion, to terminate any right and license then held by SBCL in such country
under PATENTS and KNOW-HOW to make, have made, use and import an ASSAY for the
purpose of offering to sell, selling and performing HOME-BREW in such country,
such termination to be effective, with no opportunity to cure, upon receipt by
SBCL of written notice of such termination by PROGENITOR, provided such
termination shall not be effective if SBCL has resumed sales of such services in
such country at the time SBCL receives such notice from PROGENITOR. PROGENITOR's
termination of SBCL's license rights in a particular country of the TERRITORY
under this Section 5.2 shall be PROGENITOR's sole remedy with respect to SBCL's
activities under this AGREEMENT with respect to such country.
(c) In the event that, after the EFFECTIVE DATE, the federal Food
and Drug Administration (or its equivalent in a country outside of the U.S.A.)
passes legislation or other rules which require the approval of ASSAY by such
agency, the timelines outlined in Section 5.2(a) shall be extended such that
they shall not come into effect until after approval of the ASSAY in such
country has been achieved.
5.3. MARKETING
SBCL shall bear all costs and expenses associated with marketing of
services in the TERRITORY utilizing an ASSAY. SBCL shall develop a marketing and
market development plan within (* * *) after the EFFECTIVE DATE and deliver such
plan to PROGENITOR on or before such date. In connection with its marketing
activities, including without limitation the development of a market development
and marketing plan, SBCL shall spend not less than (* * *) in support of
marketing and commercialization of services in the TERRITORY utilizing an ASSAY,
such expenditure to be made during the term of SBCL's exclusive license rights
under this AGREEMENT at a rate which is within SBCL's sole discretion.
Notwithstanding the above, in the event that the exclusive term of the license
granted to SBCL hereunder is converted to a non-exclusive license prior to the
expiration of (* * *) after the EFFECTIVE DATE, or in the event that the
AGREEMENT is terminated prior to the expiration of (* * *) after the EFFECTIVE
DATE, the amount of money that SBCL shall be required to have spent under this
Section 5.3 shall be determined at the rate of (* * *), on a pro-rated basis.
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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6. PROVISION OF KNOW-HOW AND CONFIDENTIALITY
6.1. PROVISION OF KNOW-HOW
Promptly after the EFFECTIVE DATE, PROGENITOR shall disclose and supply
to SBCL all KNOW-HOW. Thereafter, PROGENITOR shall promptly disclose and supply
to SBCL any further KNOW-HOW which may become known to PROGENITOR. During the
term of the AGREEMENT, PROGENITOR shall provide SBCL with reasonable technical
assistance, within PROGENITOR's area of expertise, with respect to the
utilization of such KNOW-HOW in the development and commercialization of ASSAYS.
6.2. GENERAL PROVISION REGARDING CONFIDENTIALITY
During the term of this AGREEMENT and for (* * *) thereafter,
irrespective of any termination earlier than the expiration of the term of this
AGREEMENT, and except as otherwise expressly provided in this AGREEMENT, each
party shall hold in strict confidence and not use or disclose to any THIRD PARTY
(other than employees, consultants and advisors who are similarly bound in
writing) any assay, product, technical, marketing, financial, business or other
information, ideas or know-how identified in writing as confidential
("Confidential Information") by the other party or otherwise developed by either
party in the performance of activities in furtherance of this AGREEMENT without
first obtaining the written consent of the disclosing party; provided, however,
that Confidential Information of a party shall not include:
(a) Information which at the time of disclosure to the receiving
party was previously known to the receiving party as demonstrated by written
records; or
(b) Information which at the time of disclosure to the receiving
party is published or otherwise generally available to the public; or
(c) Information which, after disclosure to the receiving party by
the other party, is published or otherwise becomes generally available to the
public through no breach of this AGREEMENT by the receiving party.
(d) Information which is subsequently and independently developed
by employees of the receiving party or AFFILIATES thereof who had no knowledge
of the confidential information disclosed.
6.3. EXCEPTIONS AND OTHER PROVISION RELATED TO CONFIDENTIAL
INFORMATION
A party may disclose Confidential Information of the other party:
(a) As required, in connection with the order of a court or other
governmental body; or
(b) As required by or in compliance with laws or regulations; or
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
Page 12
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(c) In confidence to accountants, banks and financing sources and
their advisors; or
(d) In confidence to consultants and advisors in connection with
a merger or acquisition or proposed merger or acquisition, or the like; or
(e) as may be required for purposes of investigating, developing,
manufacturing, having manufactured or marketing an ASSAY or its components under
this AGREEMENT or for securing essential or desirable authorizations, privileges
or rights from governmental agencies, or is required to be disclosed to a
governmental agency or is necessary to file or prosecute patent applications
concerning an ASSAY or its components which arises under this AGREEMENT.
The parties shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others to whom access to such
information is granted.
Nothing herein shall be construed as preventing SBCL from disclosing any
information received from PROGENITOR hereunder to an AFFILIATE, sublicensee or
distributor of SBCL provided, in the case of a sublicensee or distributor, such
sublicensee or distributor has undertaken a similar obligation of
confidentiality with respect to the confidential information. Nothing herein
shall be construed as preventing PROGENITOR from disclosing any information
received from SBCL hereunder to an AFFILIATE or distributor of PROGENITOR,
provided, in the case of a distributor, such distributor has undertaken a
similar obligation of confidentiality with respect to the confidential
information. In no event shall PROGENITOR be permitted to disclose any
information received from SBCL hereunder to a sublicensee.
All confidential information disclosed by one party to the other shall
remain the intellectual property of the disclosing party. If a court or other
legal or administrative tribunal, directly or through an appointed master,
trustee or receiver, assumes partial or complete control over the assets of a
party to this AGREEMENT based on the insolvency or bankruptcy of such party, the
bankrupt or insolvent party shall promptly notify the court or other tribunal
(i) that confidential information received from the other party under this
AGREEMENT remains the property of the other party and (ii) of the
confidentiality obligations under this AGREEMENT. In addition, the bankrupt or
insolvent party shall, to the extent permitted by law, take all steps necessary
or desirable to maintain the confidentiality of the other party's confidential
information and to ensure that the court, other tribunal or appointee maintains
such information in confidence in accordance with the terms of this AGREEMENT.
6.4. PUBLIC DISCLOSURE REGARDING THE TERMS OF THIS AGREEMENT OR ASSAY
(a) Except as otherwise required by law, each of the parties
agree not to disclose, directly or indirectly, by public announcement or other
disclosure, the existence, financial terms or conditions or any other terms of
this AGREEMENT to any THIRD PARTY without the prior written consent of the other
party regarding the nature and
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text of such announcement or disclosure. The party desiring to make any such
public announcement or other disclosure shall inform the other party of the
proposed announcement or disclosure in reasonably sufficient time prior to
public release, and shall provide the other party with a written copy thereof,
in order to allow such other party to comment upon such announcement or
disclosure. Each party agrees that it shall cooperate fully with the other with
respect to all disclosures regarding this AGREEMENT to the Securities Exchange
Commission and any other governmental or regulatory agencies, including requests
for confidential treatment of proprietary information of either party included
in any such disclosure.
(b) Notwithstanding the above, subject to any restrictions which
may be imposed by any governmental agency, including without limitation the
Securities and Exchange Commission, PROGENITOR and SBCL agree that a public
announcement of this AGREEMENT will be made within (* * *) after the EFFECTIVE
DATE. Such announcement shall be drafted by PROGENITOR and SBCL jointly and
shall be mutually acceptable to PROGENITOR and SBCL.
(c) PROGENITOR shall not submit for written or oral publication
any manuscript, abstract or the like which includes data or other information
relating to an ASSAY without first obtaining the prior written consent of SBCL,
which consent shall not be unreasonably withheld. The contribution of each party
shall be noted in all publications or presentations by acknowledgment or
coauthorship, whichever is appropriate.
(d) Nothing in this AGREEMENT shall be construed as preventing or
in any way inhibiting SBCL from complying with statutory and regulatory
requirements governing the development, manufacture, use and sale or other
distribution of an ASSAY in any manner which it reasonably deems appropriate,
including, for example, by disclosing to regulatory authorities confidential or
other information received from PROGENITOR or THIRD PARTIES.
7. INDEMNIFICATION AND WARRANTIES
7.1. INDEMNIFICATIONS
(a) SBCL INDEMNIFICATION
(i) SBCL shall defend, indemnify and hold harmless
PROGENITOR, its AFFILIATES, and its and their respective officers, directors,
employees, agents, successors and assigns from any loss, damage, or liability,
including reasonable attorney's fees, resulting from any claim, complaint, suit,
proceeding or cause of action against any of them alleging physical or other
injury, including death, rising out of the provision of an ASSAY, or services
utilizing an ASSAY, to the injured party by SBCL, its AFFILIATES, (or its
permitted sublicensees); provided that:
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
Page 14
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(A) SBCL shall not be obligated under this Section 7.1(a) if
it is shown by evidence acceptable in a court of law having jurisdiction over
the subject matter and meeting the appropriate degree of proof for such action,
that the injury was the result of the negligence or willful misconduct of any
employee or agent of PROGENITOR or the breach of any warrant or representation
made by PROGENITOR in this AGREEMENT;
(B) SBCL shall have no obligation under this Section 7.1(a)
unless PROGENITOR (i) gives SBCL prompt written notice of any claim or lawsuit
or other action for which it seeks to be indemnified under this AGREEMENT, (ii)
SBCL is granted full authority and control over the defense, including
settlement, against such claim or lawsuit or other action, and (iii) PROGENITOR
cooperates fully with SBCL and its agents in defense of the claims or lawsuit or
other action; and
(C) PROGENITOR shall have the right to participate in the
defense of any such claim, complaint, suit, proceeding or cause of action
referred to in this Section 7.1(a) utilizing attorneys of its choice, at its own
expense, provided, however, that SBCL shall have full authority and control to
handle any such claim, complaint, suit, proceeding or cause of action, including
any settlement or other disposition thereof, for which PROGENITOR seeks
indemnification under this Section.
(b) PROGENITOR INDEMNIFICATION
(i) PROGENITOR shall defend, indemnify and hold harmless
SBCL, its AFFILIATES, and its and their officers, directors, employees, agents,
successors and assigns from any loss, damage, or liability, including reasonable
attorney's fees, resulting from any claim, complaint, suit, proceeding or cause
of action against any of them alleging physical or other injury, including
death, rising out of either the provision of ASSAY services to the injured party
by PROGENITOR, its AFFILIATES, (or its permitted sublicensees) or the breach of
any warranty or representation made by PROGENITOR in this AGREEMENT; provided
that:
(A) PROGENITOR shall not be obligated under this
Section 7.1(b)(i) if it is shown by evidence acceptable in a court of law having
jurisdiction over the subject matter and meeting the appropriate degree of proof
for such action, that the injury was the result of the negligence or willful
misconduct of any employee or agent of SBCL; and
(B) PROGENITOR shall have no obligation under this
Section 7.1(b)(i) unless SBCL (i) gives PROGENITOR prompt written notice of any
claim, complaint, suit, proceeding or cause of action for which it seeks to be
indemnified under this AGREEMENT, (ii) PROGENITOR is granted full authority and
control over the defense, including settlement or other disposition, against
such claim, complaint, suit, proceeding or cause of action, and (iii) SBCL
cooperates fully with PROGENITOR and its agents in defense of such claim,
complaint, suit, proceeding or cause of action.
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(C) SBCL shall have the right to participate in the
defense of any claim, complaint, suit, proceeding or cause of action referred to
in this Section 7.1(b)(i) utilizing attorneys of its choice, at its own expense.
(ii) PROGENITOR shall defend, indemnify and hold harmless
SBCL and its officers, directors, employees, successors and assigns from and
against any and all loss, damage, or liability, including reasonable attorney's
fees, arising out of, or resulting from or in connection with alleged
infringement of THIRD PARTY patent rights by exercise of the license herein
granted by SBCL, its AFFILIATES, or its sublicensees; provided that such patent
rights owned or controlled by such THIRD PARTY (i) are required to practice the
DNA-based diagnosis of human hereditary hemochromatosis by methods and materials
disclosed in the PATENTS and KNOW-HOW and licensed hereunder pursuant to Section
2.1 or Section 2.2, and (ii) disclose subject matter disclosed in the PATENTS
AND KNOW-HOW; and provided further that:
(A) PROGENITOR shall have no obligation under this
Section 7.1(b)(ii) unless such intellectual property rights (i) are required to
exercise the license granted herein; and (ii) claim (literally or under the
doctrine of equivalents) necessary embodiments and use of an ASSAY or its
components disclosed in Patents;
(B) PROGENITOR receives prompt written notice of any
claim, complaint, suit, proceeding or cause of action for which indemnification
is sought under this Section 7.1(b)(ii); and
(C) PROGENITOR is granted full authority and control
over the defense against such claim, complaint, suit, proceeding or cause of
action, including without limitation settlement or other disposition thereof;
(D) SBCL cooperates fully with PROGENITOR and its
agents in defense of such claim, complaint, suit, proceeding or cause of action;
(E) SBCL, at SBCL's expense, shall have the right to
participate in the defense of any claim, complaint, suit, proceeding or cause of
action referred to in this Section 7.1(b)(ii) utilizing attorneys of its choice;
and
(F) In the event that damages, losses and liabilities
allegedly arising out of, or resulting from or in connection with infringement
of THIRD PARTY patent rights by exercise of the license herein granted by SBCL,
AFFILIATES of SBCL or sublicensees of SBCL are assessed against SBCL and awarded
to such THIRD PARTY in a final judgment either affirmed on appeal to a court of
next level above the trial court or not appealed, PROGENITOR's obligation under
Section 7.1(b)(ii) to indemnify SBCL shall be (* * *) of any such damages which
are based on royalties to be paid such THIRD PARTY as a result of the exercise
of the license herein granted, in a particular country of the TERRITORY,
provided that, in no event shall such reimbursement exceed (* * *) in such
country of an ASSAY in each human sample analysis conducted either by SBCL, its
AFFILIATE or a sublicensee of SBCL from
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
Page 16
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which SBCL derives revenue. The term "in each human sample analysis conducted
either by SBCL or a sublicensee of SBCL from which SBCL derives revenue" as used
in this Section 7.1(b)(ii) shall not include any repeats conducted with the same
human sample which are required to produce a reliable result or any analysis
conducted on a blinded sample for purposes of training or establishing a service
laboratory or any testing for validation purposes.
7.2. WARRANTIES AND REPRESENTATIONS
(a) (i) PROGENITOR warrants and represents that it owns the
entire right, title and interest in the PATENTS listed in Appendix A, or filed
by or on behalf of PROGENITOR pursuant to Section 7, and the KNOW-HOW provided
to SBCL under this AGREEMENT, and that it otherwise has the right to enter into
this AGREEMENT.
(ii) PROGENITOR further warrants and represents that it will
not encumber any such PATENTS and KNOW-HOW with liens, mortgages, security
interests or otherwise.
(iii) PROGENITOR further warrants and represents that there
is nothing in any THIRD PARTY agreement PROGENITOR has entered into as of the
EFFECTIVE DATE which, in any way, will limit Progenitor's ability to perform all
of the obligations undertaken by PROGENITOR hereunder, and that it will not
enter into any AGREEMENT after the EFFECTIVE DATE under which PROGENITOR would
incur any such limitations.
(iv) Nothing in this AGREEMENT shall be construed as a
warranty or representation by PROGENITOR as to the validity of any patent claim
or patent within the PATENTS. Nothing in this AGREEMENT shall be construed as a
warranty or representation by PROGENITOR that any ASSAY made, used or imported,
or any service offered for sale or sold, pursuant to the rights and license
granted under this AGREEMENT is or will be free from infringement of any patent
right held by any THIRD PARTY. PROGENITOR hereby warrants and represents that it
has no present knowledge that PATENTS are invalid.
(v) PROGENITOR warrants and represents that it has not, up
through and including the EFFECTIVE DATE, omitted to furnish SBCL with any
information in its possession concerning ASSAYS or the transactions contemplated
by this AGREEMENT, which would be material to SBCL's decision to enter into this
AGREEMENT and to undertake the commitments and obligations set forth herein.
(b) PROGENITOR GRANTS NO WARRANTIES WITH RESPECT TO THE PATENTS
OR ASSAY OR SERVICES UTILIZING ASSAY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND PROGENITOR SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTY OF QUALITY, WARRANTY OF MERCHANTABILITY, WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF NONINFRINGEMENT EXCEPT AS
OTHERWISE PROVIDED IN SECTION 7.2(a).
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8. PATENT PROSECUTION, ENFORCEMENT AND DEFENSE
8.1. INVENTIONS AND PROSECUTION
(a) Each party shall have and retain sole and exclusive title to
all inventions, discoveries and know-how which are made, conceived, reduced to
practice or generated by its employees, agents, or other persons acting under
its authority in the course of or as a result of this AGREEMENT. Each party
shall own a fifty percent (50%) undivided interest in all such inventions,
discoveries and KNOW-HOW made, conceived, reduced to practice or generated
jointly by employees, agents, or other persons acting under the authority of
both parties in the course of or as a result of this AGREEMENT. Except as
expressly provided in this AGREEMENT, each joint owner may make, use, sell,
keep, license, assign, or mortgage such jointly owned inventions, discoveries
and know-how, and otherwise undertake all activities a sole owner might
undertake with respect to such inventions, discoveries and know-how, without the
consent of and without accounting to the other joint owner.
(b) PROGENITOR warrants and represents that it has disclosed to
SBCL the complete texts of all patent applications filed by PROGENITOR as of the
EFFECTIVE DATE which relate to an ASSAY or its components as well as all
information received as of the EFFECTIVE DATE concerning the institution or
possible institution of any interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding involving a PATENT anywhere
in the TERRITORY. PROGENITOR further warrants and represents that it will
disclose to SBCL the complete texts of all patent applications filed by
PROGENITOR after the EFFECTIVE DATE which relate to an ASSAY or its components
to which SBCL holds exclusive rights hereunder as well as all information
received after the EFFECTIVE DATE concerning the institution or possible
institution of any interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding involving a PATENT anywhere
in the TERRITORY. SBCL shall have the right to review all such pending
applications and other proceedings and make recommendations to PROGENITOR
concerning them and their conduct. PROGENITOR agrees to keep SBCL promptly and
fully informed of the course of patent prosecution or other proceedings
including by providing SBCL with copies of substantive communications, search
reports and third party observations submitted to or received from patent
offices throughout the TERRITORY. SBCL shall provide such patent consultation to
PROGENITOR at no cost to PROGENITOR. SBCL shall hold all information disclosed
to it under this section as confidential subject to the provisions of Sections
6.1 and 6.2.
(c) During the term of this AGREEMENT, PROGENITOR shall, at its
expense and in its sole discretion, file, prosecute and maintain PATENTS,
including those which embrace inventions outlined in Section 8.1(a) in which
PROGENITOR has an ownership interest. During the term of the AGREEMENT in which
SBCL has an exclusive right to an ASSAY under PATENTS and KNOW-HOW, SBCL shall
have the right, but not the obligation, to assume responsibility for any PATENT
or any part of a PATENT which
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PROGENITOR intends to abandon or otherwise cause or allow to be forfeited.
PROGENITOR shall give SBCL reasonable written notice prior to abandonment or
other forfeiture of any PATENT or any part of a PATENT so as to permit SBCL to
exercise its rights under this Section.
8.2. ENFORCEMENT
(a) If either PROGENITOR or SBCL determines that a THIRD PARTY is
making, using, offering for sale, selling or importing an ASSAY or its
components or that may infringe PATENTS in the TERRITORY, the party that has
made such determination will notify the other party promptly in writing.
(b) SBCL, in its own name or jointly with PROGENITOR if required
by law, at SBCL's expense, shall have the first right, at SBCL's election, but
no obligation to (i) bring and prosecute actions, proceedings, suits and
countersuits for enforcement of PATENTS covering an ASSAY or its components or
HOME-BREW in the TERRITORY, and/or (ii) settle any claim or demand, including
without limitation any suit, for enforcement of PATENTS covering an ASSAY or its
components or HOME-BREW in the TERRITORY; provided that the right and license
held by SBCL hereunder at the time of such election is exclusive with respect to
the particular country of the TERRITORY. If SBCL elects to bring any action,
proceeding, suit or countersuit for infringement of PATENTS covering an ASSAY or
its components or HOME-BREW in the relevant country of the TERRITORY, SBCL shall
direct and control such action, proceeding, suit or countersuit and shall
provide prompt and regular updates to PROGENITOR of SBCL's intentions and
progress toward resolution of such action, proceeding, suit or countersuit. If,
prior to a final resolution of any such action, proceeding, suit or countersuit,
or the conclusion of such settlement negotiations, either (x) SBCL, in
accordance with Section 2.2, converts the right and license granted by
PROGENITOR hereunder to a nonexclusive right and license, or (y) this AGREEMENT
is terminated in accordance with the provisions hereof, PROGENITOR shall assume,
and SBCL shall relinquish, direction and control of such action, proceeding,
suit or countersuit. In addition, SBCL agrees that SBCL shall not settle any
claim or demand, including without limitation any suit, for enforcement of
PATENTS covering an ASSAY or its components or HOME-BREW in the TERRITORY which
would adversely affect the scope and/or validity of PATENTS without the express
prior written consent of PROGENITOR. PROGENITOR, at Progenitor's expense and
with counsel of PROGENITOR's choosing, shall have a right to participate in any
action, proceeding, suit or countersuit, or any settlement negotiations relating
to PATENTS.
(c) If SBCL brings any action, proceeding, suit or countersuit to
enforce rights within PATENTS covering an ASSAY or its components or HOME-BREW
in the TERRITORY against any infringer pursuant to Section 8.2(b), PROGENITOR,
at its expense, shall cooperate with SBCL in connection with such action,
proceeding, suit or countersuit, including without limitation by joining as a
party if necessary and appropriate, and executing such documents as SBCL may
reasonably request. PROGENITOR and SBCL shall recover their respective actual
out-of-pocket expenses, or
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equitable proportions thereof, associated with any litigation or settlement
thereof from any recovery made by any party. Any excess amount shall be shared
equally between SBCL and PROGENITOR, provided in no event shall PROGENITOR's
share of the excess amount exceed the royalties which would otherwise be due
PROGENITOR for the sales of an ASSAY that were the subject of the litigation had
such sales been made by SBCL, its AFFILIATES or its sublicensees under this
AGREEMENT.
(d) If SBCL does not commence an action, proceeding or suit
against a THIRD PARTY to enforce any rights within PATENTS covering an ASSAY or
its components or HOME-BREW in the TERRITORY, or does not otherwise take action
to xxxxx infringement of PATENTS by a THIRD PARTY in the TERRITORY, within 3
months after giving or receiving notice thereof pursuant to Section 8.2(a), and
thereafter pursues such action or proceeding diligently, PROGENITOR, at
PROGENITOR's expense, shall have a right but not an obligation to commence or
take control of such action, proceeding or suit. In the event that PROGENITOR
elects to commence or take control of any action, proceeding or suit pursuant to
this Section 8.2(d), SBCL, at SBCL's expense, shall cooperate with PROGENITOR in
connection with such action, proceeding or suit, including without limitation by
joining as a party if necessary and appropriate, and executing such documents as
PROGENITOR may reasonably request. PROGENITOR and SBCL shall recover their
respective actual out-of-pocket expenses, or equitable proportions thereof,
associated with any litigation or settlement thereof from any recovery made by
any party. Any excess amount shall be (* * *) by SBCL, its AFFILIATES or its
sublicensees under this AGREEMENT.
8.3. DEFENSE
Except as otherwise set forth in Sections 7.1(b)(ii) and 9.3(b), SBCL
shall defend or, at SBCL's option, settle, at SBCL's expense, any action,
proceeding, suit or claim brought against SBCL and PROGENITOR on the issue of
infringement by the making, having made, using or importing an ASSAY or its
components, or for offering for sale, selling or performing HOME-BREW, in the
TERRITORY; provided, however, that SBCL shall not settle any such action,
proceeding, suit or claim which would adversely affect the scope and/or validity
of PATENTS without the express prior written consent of PROGENITOR.
9. TERM AND TERMINATION
9.1. TERM - INITIAL AND EXTENDED.
(a) The initial term of this AGREEMENT will commence on the
EFFECTIVE DATE and shall remain in full force and effect until the (* * *)
anniversary of the EFFECTIVE DATE, unless terminated at an earlier date in
accordance with the terms and conditions of this Section 9 or as otherwise
provided in Section 5.2(b).
(b) Notwithstanding the above, SBCL, at any time during the (* * *) after the
EFFECTIVE DATE, upon written notice to PROGENITOR, may extend the term of
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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this AGREEMENT for up to (* * *) additional periods of (* * *) each; provided
that this AGREEMENT has not expired or terminated prior to the date of
PROGENITOR's receipt of any such written notice of extension. If SBCL still has
an exclusive license under PATENTS and KNOW-HOW under Section 2 at the time SBCL
provides such notice to PROGENITOR, the terms and conditions of each and any
such extension shall be, at PROGENITOR's option and discretion, either (i) an
exclusive, non-transferable right and license, including without limitation the
right to grant sublicenses, under PATENTS to make, have made, use and import an
ASSAY for the sole purpose of offering for sale, selling and performing
HOME-BREW in the TERRITORY in accordance with Section 2.1 above subject to the
terms and conditions set forth in this AGREEMENT as applied during the sixth and
final year of the initial term of this AGREEMENT, or (ii) a nonexclusive,
nontransferable right and license, with no right to grant sublicenses, under
PATENTS and KNOW-HOW to make, have made, use and import ASSAY for the purpose of
offering for sale, selling and performing HOME-BREW in the TERRITORY subject to
terms and conditions of this AGREEMENT as applied to SBCL's nonexclusive license
rights, such as Sections 2.2 and 3.4.
9.2. TERMINATION FOR MATERIAL BREACH OR DEFAULT.
(a) Either PROGENITOR or SBCL may terminate this AGREEMENT in the
event of a material breach of or default under this AGREEMENT by the other
party.
(b) The effective date of termination of this AGREEMENT for
material breach or default shall be the date of receipt by the breaching party
of written notice of termination of this AGREEMENT by the non-breaching party,
such written notice to be provided at any time after (* * *) after the date of a
written notice by the non-breaching party to the breaching party of a material
breach or default, unless the breaching party shall have cured such breach or
default within such (* * *) period.
9.3. AT-WILL TERMINATION
(a) SBCL may terminate this AGREEMENT, on a country by country
basis, at any time upon (* * *) prior written notice to PROGENITOR. In addition,
SBCL may terminate this AGREEMENT, on a country by country basis, at any time
upon (* * *) prior written notice in the event that a KIT is commercially
launched in such country by a THIRD PARTY who is not a licensee or marketing
partner of PROGENITOR. In addition, SBCL may terminate this AGREEMENT, on a
country by country basis, at any time upon (* * *) prior written notice in the
event that the federal Food and Drug Administration (or its equivalent outside
of the U.S.A.) passes legislation requiring the federal regulation of HOME-BREW.
(b) PROGENITOR, upon (* * *) written notice to SBCL, may
terminate this AGREEMENT with respect to any country in the TERRITORY in which
SBCL has received notice of infringement of patent rights owned or controlled by
a THIRD PARTY by exercise of the license herein granted at any time after the (*
* *) anniversary of the date of issuance in such country of such patent rights.
The effective date of such
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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termination shall be (* * *) after the date of PROGENITOR's written notice to
SBCL. Notwithstanding the above, termination of this AGREEMENT shall not occur
under this Section 9.3(b) if, prior to the effective date of such termination,
SBCL agrees, in writing, to release PROGENITOR of PROGENITOR's obligation with
respect to such particular patent rights under Section 7.1(b)(ii) as of the date
(* * *) after the date of PROGENITOR's written notice to SBCL hereunder. In such
event, SBCL shall assume such obligation with respect to such patent rights with
respect to all damages, losses and liabilities attributable to activities
allegedly arising out of, or resulting from or in connection with the
infringement of such patent rights in such country by the manufacture, use
and/or sale of ASSAY under this AGREEMENT by SBCL, AFFILIATES of SBCL and
sublicensees of SBCL after such date, but SBCL shall have no obligation to
PROGENITOR with respect to any such damages, losses and liabilities assessed
against PROGENITOR, its officers, directors, shareholders, employees, successors
and assigns which are attributable to activities of SBCL, AFFILIATES of SBCL and
sublicensees of SBCL allegedly arising out of, or resulting from or in
connection with the infringement of such patent rights in such country by the
manufacture, use and/or sale of ASSAY under this AGREEMENT by SBCL, AFFILIATES
of SBCL and sublicensees of SBCL prior to or after such date.
9.4. BANKRUPTCY
(a) Either party may terminate this AGREEMENT if, at any time,
the other party shall file in any court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver or
trustee of the party or of its assets, or if the other party proposes a written
agreement of composition or extension of its debts, or if the other party shall
be served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof, or if the other party shall propose or be a party to
any dissolution or liquidation, or if the other party shall make an assignment
for the benefit of creditors.
(b) Notwithstanding the bankruptcy of PROGENITOR, or the
impairment of performance by PROGENITOR of its obligations under this AGREEMENT
as a result of bankruptcy or insolvency of PROGENITOR, SBCL shall be entitled to
retain the licenses granted herein, subject to PROGENITOR's rights to terminate
this AGREEMENT for reasons other than bankruptcy or insolvency as expressly
provided in this AGREEMENT.
(c) All rights and distribution rights granted under or pursuant
to this AGREEMENT by PROGENITOR to SBCL are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
rights to "intellectual property" as defined under Section 101(52) of the U.S.
Bankruptcy Code. The parties agree that SBCL, as a licensee of such rights under
this AGREEMENT, shall retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code, subject to performance by SBCL of its
preexisting obligations under this AGREEMENT. The parties further agree that, in
the event of the commencement of a bankruptcy proceeding by or against
PROGENITOR under the U.S. Bankruptcy Code,
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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SBCL shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to SBCL (i) upon any such commencement of a bankruptcy
proceeding upon written request therefor by SBCL, unless PROGENITOR elects to
continue to perform all of its obligations under this Agreement, or (ii) if not
delivered under (i) above, upon the rejection of this AGREEMENT by or on behalf
of PROGENITOR upon written request therefor by SBCL; provided, however, that
upon PROGENITOR's (or its successor's) written notification to SBCL that it is
again willing and able to perform all of its obligations under this AGREEMENT,
SBCL shall promptly return all such tangible materials to PROGENITOR, but only
to the extent that SBCL does not require continued access to such materials to
enable SBCL to perform its obligations under this AGREEMENT.
9.5. EFFECT OF EXPIRATION OR TERMINATION
(a) Upon termination of this AGREEMENT, PROGENITOR shall have the
right to retain any sums already paid by SBCL hereunder, and SBCL shall pay all
sums accrued hereunder which are then due.
(b) Termination of this AGREEMENT in its entirety shall terminate
all outstanding obligations and liabilities between the parties arising from
this AGREEMENT except those described in Sections 4, 6, 7, 9.5 and 10. In
addition, any other provision required to interpret and enforce the parties'
rights and obligations under this AGREEMENT shall also survive, but only to the
extent required for the full observation and performance of this AGREEMENT. (c)
Termination of the AGREEMENT in accordance with the provisions hereof shall not
limit remedies which may be otherwise available in law or equity.
10. MISCELLANEOUS PROVISIONS
10.1. GOVERNING LAW
This AGREEMENT shall be governed by, and construed and interpreted in
accordance with, the law of the State of Delaware, without reference to conflict
of laws principles.
10.2. ASSIGNMENT
The rights and liabilities of the parties hereto will bind and inure to
the benefit of their successors, executors or administrators; provided that, as
PROGENITOR has specifically contracted with SBCL, SBCL may not assign or
delegate any right or obligation received by SBCL from PROGENITOR under this
Agreement, either in whole or in part, to any entity, without the express prior
written consent of PROGENITOR; provided, however, that SBCL may assign this
AGREEMENT or any part of its rights and obligations hereunder to any AFFILIATE
of SBCL or to any corporation with which SBCL
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may merge or consolidate, or to which it may transfer all or substantially all
of its assets to which this AGREEMENT relates, without obtaining the consent of
PROGENITOR. PROGENITOR shall be entitled to assign this AGREEMENT to a THIRD
PARTY upon written notice thereof to SBCL. Any permitted assignee or transferee
shall agree in writing to comply with all the terms and conditions contained in
this AGREEMENT. Any attempted assignment in violation of the provisions of this
Section 10.2 will be void.
10.3. ENTIRE AGREEMENT
This AGREEMENT constitutes the entire and exclusive agreement between
the parties with respect to the subject matter hereof and supersedes and cancels
all previous registrations, agreements, commitments and writings in respect
thereof.
10.4. MODIFICATION
No modification to this AGREEMENT shall be effective unless consented to
in writing by the party to be charged.
10.5. WAIVER
No waiver of any rights shall be effective unless consented to in
writing by the party to be charged and the waiver of any breach of default shall
not constitute a waiver of any other right hereunder or any subsequent breach or
default.
10.6. NOTICES
Any notice, request, approval or other document required or permitted to
be given under this AGREEMENT shall be in writing and shall be deemed to have
been given when delivered in person, or sent by overnight courier service,
postage prepaid, or sent by certified or registered mail, return receipt
requested, or by facsimile transmission, to the following addresses of the
parties (or to such other address or addresses as may be specified from time to
time in written notice). Any notices given pursuant to this AGREEMENT shall be
deemed to have been given and delivered upon the earlier of (i) if sent by
overnight courier service, on the date when received at the address set forth
below as proven by a written receipt from the delivery service verifying
delivery, or (ii) if sent by certified or registered mail, three (3) business
days after mailed by certified or registered mail postage prepaid and properly
addressed, with return receipt requested, or (iii) if sent by facsimile
transmission, on the day when sent by facsimile as confirmed by automatic
transmission report coupled with certified or registered mail or overnight
courier service receipt proving delivery, or (iv) if delivered in person, on the
date of delivery to the address set forth below as proven by written signature
of the recipient.
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PROGENITOR
Progenitor, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
SBCL
SmithKline Xxxxxxx Clinical Laboratories
0000 Xxxxx Xxxxxxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
copies to:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (Mail Code FP2225)
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, X.X.X.
Attention: Corporate Law-U.S.
10.7. DESCRIPTIVE HEADINGS
The headings of the several sections of this AGREEMENT are intended for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this AGREEMENT.
10.8. COUNTERPARTS
This AGREEMENT may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
10.9. TRADEMARKS AND NO GRANT OF RIGHTS TO SBCL INTELLECTUAL PROPERTY
RIGHTS
(a) SBCL shall be responsible for the selection of all trademarks
and service marks which it employs in connection with an ASSAY in the TERRITORY
and shall own and control such marks. SBCL shall be responsible for registration
and maintenance of all such marks. Nothing in this AGREEMENT shall be construed
as a grant of rights, by license or otherwise, to PROGENITOR to use such marks
or any other marks or trade names owned by SBCL for any purpose. SBCL shall own
such trade names and marks and shall retain such ownership upon termination or
expiration of this AGREEMENT.
(b) Nothing in this AGREEMENT shall be construed to grant
PROGENITOR any rights whatsoever to any intellectual property owned by SBCL, its
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AFFILIATES or its sublicensees, whether or not such intellectual property is
related to an ASSAY or its components or to HOME-BREW or to any KIT.
10.10. FORCE MAJEURE
If the performance of any part of this AGREEMENT by either party, or of
any obligation under this AGREEMENT, is prevented, restricted, interfered with
or delayed by reason of any cause beyond the reasonable control of the party
liable to perform, unless conclusive evidence to the contrary is provided, the
party so affected shall, upon giving written notice to the other party, be
excused from such performance to the extent of such prevention, restriction,
interference or delay, provided that the affected party shall use its reasonable
best efforts to avoid or remove such causes of non-performance and shall
continue performance with the utmost dispatch whenever such causes are removed.
When such circumstances arise, the parties shall discuss what, if any,
modification of the terms of this AGREEMENT may be required in order to arrive
at an equitable solution.
10.11. SEPARABILITY
(a) If any portion of this AGREEMENT shall be held illegal, void
or ineffective, the remaining portions hereof shall remain in full force and
effect.
(b) If any of the terms or provisions of this AGREEMENT are in
conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to conform with such statute or
rule of law.
(c) If the terms and conditions of this AGREEMENT are materially
altered as a result of Sections 10.11(a) or 10.11(b), the parties will
renegotiate the terms and conditions of this AGREEMENT to resolve any
inequities.
10.12. RECORDING
SBCL shall have the right, at any time, to record, register, or
otherwise notify this AGREEMENT in appropriate governmental or regulatory
offices anywhere in the TERRITORY, and PROGENITOR shall provide reasonable
assistance to SBCL in effecting such recording, registering or notifying.
IN WITNESS WHEREOF, the undersigned are duly authorized to execute this
AGREEMENT on behalf of PROGENITOR and SBCL, as applicable.
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PROGENITOR, INC. SMITHKLINE XXXXXXX CLINICAL
("PROGENITOR") LABORATORIES, INC.
("SBCL")
By: /s/ Xxxxxxxx X. Given M.D., Ph.D. By: /s/ Tachi Yamada
---------------------------------- -------------------------------
Title: President and Chief Executive Title: President, SmithKline Xxxxxxx
Officer Healthcare Services
Date: September 18, 1997 Date: September 18, 1997
-------------------------------- -------------------------------
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LICENSE AGREEMENT
SMITHKLINE XXXXXXX CLINICAL LABORATORIES-PROGENITOR, INC.
EXHIBIT A
PATENTS
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EXHIBIT A
(* * *)
* Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
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