LICENSE AND DEVELOPMENT AGREEMENT
Exhibit 10.17
THIS AGREEMENT, effective this 14 day of July, 2008, between | ||
HEALTH
DISCOVERY CORPORATION, a corporation of the State of Georgia, with its
principal place of business at 0 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxx 00000, hereinafter referred to as “HDC,”
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and
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DCL
MEDICAL LABORATORIES, LLC,
a
limited liability company of the State of Delaware, with its principal
place of business at 0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000, hereinafter referred to as “DCL”
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W I T N E S S E T H, That:
WHEREAS,
HDC is the assignee, licensee, and owner of exclusive patent rights in
technology covering support vector machines and other learning machine methods
for analysis of data and signal processing, collectively the “SVM
Technology”;
WHEREAS,
HDC also possesses technical expertise and know-how for the use and exploitation
of the SVM Technology and is willing to apply this expertise for development of
computer-assisted screening automat;
WHEREAS,
DCL employs physicians with board certifications in anatomic pathology and
specialist certification in cytopathology and has access to cervical cytology
specimens and owns and operates laboratories to prepare and test cervical
cytology slides utilizing cytotechnologists trained in cytology screening
services;
WHEREAS,
DCL desires to obtain the right to use such technical information and patent
rights on the terms set forth hereinbelow; and
WHEREAS,
the parties desire to collaborate to develop and commercialize an automated
procedure for cervical cytology screening and cancer screening from solid
tissues in specific disease areas (the “Program”).
NOW,
THEREFORE, in consideration of the promises and the mutual covenants herein
contained, and other good and valuable consideration, the receipt of which are
acknowledged by the parties, the parties agree as follows:
ARTICLE I – DEFINITIONS
As used in this Agreement the
following terms, whether singular or plural, shall have the following
meanings:
A. “Confidential
Information” shall mean technical information and know-how relating to the
Licensed Technology and its use in Screening Services, disclosed by one party
(the “Disclosing Party”) to the other party (the “Recipient”) prior to
termination of this Agreement and designated or confirmed in writing to be
confidential, except such information (1) that is or becomes known publicly
through no fault of Recipient, (2) that is learned by Recipient from
a third party entitled to disclose it, or (3) that was already known to
Recipient at the time of disclosure by the Disclosing Party as shown by
Recipient’s prior written records.
Information shall not be deemed to be
within the foregoing exceptions merely because it is embraced within broader or
general disclosures known to the public or the Recipient party, and any
combination of features shall not be deemed to be within the foregoing
exceptions merely because individual features are known to the public or to the
Recipient unless the whole combination of features and its principle of
operation are known.
B. “Effective
Date” shall mean the date indicated above as the effective date of this
Agreement.
C. “Field”
shall mean the discovery, research, development, manufacture and
commercialization of clinical laboratory testing services in the areas of
cervical cytology, ovarian cancer, and endometrial cancer
screening.
D. “License”
shall mean the license granted pursuant to Article II of this
Agreement.
E. “Licensed
Technology” shall mean the Licensed Patents and Confidential Information of
HDC.
F. “Licensed
Patents” shall mean those patents and patent applications in existence as of the
Effective Date and listed in Schedule A, and any divisions, continuations and
continuations-in-part or their equivalents, any patents issuing on these
applications including re-issues and reexaminations and the foreign equivalents
thereof, all of which will be automatically added to Schedule A and made a part
of this Agreement.
G. “Licensed
Territory” shall mean worldwide.
ARTICLE II - GRANT OF
LICENSE
A. As
of the Effective Date of this Agreement, HDC hereby grants to DCL a nonexclusive
license under the Licensed Technology in the Field in the Licensed Territory;
and
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B. As
of the Effective Date of this Agreement, HDC hereby grants to DCL a
Sole License (as defined below), without the right to grant sublicenses, to the
Applications (as hereinafter defined). For purposes of this Agreement
a Sole License means, if HDC owns (defined by equity ownership of
more than fifty (50) percent of the total issued equity in the company) and
operates a commercial CLIA certified one or more laboratories (each, an “HDC
Lab”), then, subject to the requirements of Article II,B,
hereunder, such HDC Lab may utilize the Licensed Technology to
commercialize Services in the Licensed Territory. For the avoidance
of doubt, HDC may not license the Applications to any third party during the
term of this Agreement.
C. For
any Rejected Application, as hereinafter defined, the Sole License granted under
Paragraph B above shall be converted to a nonexclusive license.
ARTICLE III – ROLE OF THE
PARTIES
A. Role of
HDC
(1) HDC
will reimburse DCL commercially reasonable fees for services of the digital
scanning and imaging entities retained by DCL as specified in a trial protocol
to be completed and attached to this Agreement (the “Protocol”). DCL
will be responsible for contracting with third parties for such
services.
(2) HDC
will use commercially reasonable efforts to develop new image analysis-based
systems for analysis of digital images (the “Images”) provided by DCL, utilizing
the SVM Technology (the “Applications”).
(3) Upon
completion of the testing of the Applications, HDC will promptly report the
sensitivity and specificity results to DCL.
(4) HDC
will provide to DCL the results of analysis of a second set of Images using the
Applications to allow DCL to compare the performance of the Applications between
the results of the first set of Images and the second set of Images for
validation of the Applications.
(5) If
the results of the validation testing do not indicate acceptable performance as
determined by DCL, HDC will refine the Applications as needed to improve the
performance. If any Application fails to achieve acceptable performance within a
commercially reasonable time period, but in no event longer than ninety (90)
days, DCL shall have the option to terminate the Application upon thirty (30)
days’ prior written notice to HDC.
(6) HDC
will be responsible for preparation and submission of all documents, filings and
associated fees related regulatory requirements for intellectual property rights
and commercial distribution of the test as required by the U.S. Food and Drug
Administration.
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B. Role of
DCL
(1) DCL
will provide up to 400 deidentified, remnant cervical cytology slides that were
prepared using Cytyc Thin Prep Pap Test system. Such slides will be
processed in accordance with testing procedures required for scanning using an
Aperio ScanScope® or other similar cellular imaging system for conversion to
digital images. Should Cytyc ThinPrep Pap Test slides not conform to
Aperio requirements, the parties will work together to identify a suitable
cytology processing method.
(2) DCL
will provide up to 200 each of deidentified, remnant ovarian cancer and
endometrial cancer slides that were prepared using standard medically acceptable
anatomic pathology stains. Such slides will be utilized in accordance
with testing procedures required for scanning using an Aperio ScanScope® or
other similar cellular imaging system for conversion to digital
images. Should these slides not conform to Aperio requirements, the
parties will work together to identify a suitable processing
methods.
The deidentified remnant slides
(cervical cytology, ovarian and endometrial cancer) shall be referred to
collectively as the “Slides.”
(3) DCL
will cause the Slides to be independently screened by at least one certified
cytotechnologist and one cytopathologist in case of cervical cancer and anatomic
pathologist for ovarian and endometrial cancer. Concordance of the
independent review will be used to determine an accurate diagnosis. If the
independent diagnoses do not agree on a Slide, the Slide will be discarded, or
accepted as indicated by the Protocol.
(4) DCL
will cause the pre-screened Slides to be scanned to generate
Images. If scanning is not performed by DCL, the slides may be
submitted to a mutually-agreed third party, such as Aperio Digital Slide
Scanning Service.
(5) Within
sixty (60) days after the Effective Date, DCL will provide a first set of Images
to HDC along with deidentified clinical data associated with the Images
(“Clinical Data”) solely for use in the development of a new
Application.
(6) During
a ninety (90)-day period beginning with the date of execution of the parties’
Letter of Intent, DCL will make available a cytotechnologist, a cytopathologist
and anatomic pathologists to consult with HDC to provide detailed information
regarding characteristics of the Images and diagnoses associated with those
characteristics. DCL shall provide up to a total of two hundred-forty
(240) hours of technologist and pathologist time in said ninety (90)-day period.
For avoidance of doubt, the two hundred-forty (240) hours is the combined time
of the cytotechnologist and cytopathologist.
(7) Within
thirty (30) days after HDC has reported the results of the testing of the new
Application using the first set of Images per Article III.B(3), DCL will provide
a second set of up to 200 Images to HDC to be used for validation of the
Applications.
(8) DCL
will compare the results of HDC’s analysis of the second set of Images to
outcomes data determined by a cytopathologist in case of cervical cancer and an
anatomic pathologist in case of ovarian and endometrial cancer and will report
the results of that comparison to HDC.
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(9) DCL
will provide HDC with all data generated under the validation, clinical trial
protocols, and commercial use of the Application to HDC as required for HDC to
prepare any required regulatory submissions for commercial
distribution.
ARTICLE IV –
COMMERICALIZATION
A. Marketing and Profit
Sharing
(1) Upon
the validation of the new Application as determined by DCL, DCL will use
commercially reasonable efforts to initiate a commercial, laboratory-developed
screening service for analysis of Images of cervical cytology, and independently
for ovarian cancer and endometrial cancer slides (the “Services”), provided
that: (i) such Services are within DCL’s scope of test offerings;
(ii) there is an existing market for Services; (iii) there is a billable CPT
code for Services; and (iv) such Services are in compliance with applicable
governmental laws, rules and regulations.
(2) DCL
will be responsible for the marketing of the Services.
(3) In
the event DCL decides not to commercialize Services within six (6) months
following the validation of a new Application or ceases to commercialize the
Services for any of the Applications for a period of at least six months
(“Rejected Applications”), then in addition to HDC’s limited rights under
Article II.A., HDC shall have the right to commercialize any such Rejected
Application subject to the requirements of this Article IV.
(4) DCL
will pay to HDC fifty percent (50%) of profits from providing the
Services. The profits shall be based on total reimbursed amounts for
such Services by DCL, less direct costs of performing such Services to
include reagent, instrument, imaging costs, billing, direct labor,
and shipping costs (if applicable). Profits shall not be reduced by
non-employee corporate management and ownership expenses, , or marketing or
executive management bonus programs. Should the Service not have a billable CPT
code that generates revenue per test greater than reimbursement for a computer
assisted imaged cancer slide at the time of commercialization, DCL shall have no
obligation to commercialize the test, but shall use commercially reasonable
efforts to conduct a clinical utility study with specific commercial medical
practices to demonstrate the commercial utility of the Application and, where
possible, may prepare a manuscript for publication detailing the results of such
study.
(5) If HDC
commercializes an Application and offers Services as permitted in Article II,
B,_above, HDC will pay DCL twenty-five (25%) percent of profits from providing
the Services. The profits shall be based on total reimbursed amounts
for such Services by DCL, less direct costs of performing such Services to
include reagent, instrument, imaging costs, billing, direct labor,
and shipping costs (if applicable). Profits shall not be reduced by
non-employee corporate management and ownership expenses, , or marketing or
executive management bonus programs.
(6) In
the event HDC sells or licenses a Rejected Application to a third
party, HDC will pay to DCL twenty-five (25%) of HDC’s profits from
such a transaction. If such proceeds include a non-monetary component, such
component shall be appraised for its fair market value and paid at twenty-five
(25%) of the total cash equivalent.
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B.
Limitations on HDC’s
Liability
While it is expected that the Licensed
Technology will enable DCL to develop and carry out Services on a commercial
scale, HDC does not warrant or guarantee that such results will be obtained, and
HDC shall not be liable to DCL because of any failure in the operations of
DCL. Moreover, while it is believed that the ordinary and anticipated
use of Licensed Technology or Services based thereon, will not result in safety
or health hazards to workers or to purchasers of such Services, HDC does not
warrant or guarantee against health or safety hazards.
HDC
further expressly excludes any and all implied representations, conditions and
warranties that:
(i) the
Licensed Patents are valid or enforceable;
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(ii)
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any
manufacture, use, importation, sale, lease, or other disposal of Services
will not infringe any patent or other intellectual property not owned by
or licensed to HDC; and
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(iii)
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HDC
has any obligation to bring or prosecute actions or suits against third
parties for infringement of the Licensed
Patents.
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C. Indemnity
(1) HDC
shall indemnify and hold DCL harmless from: (1) any claim of infringement of any
intellectual property right of a third party connected with the Licensed
Technology and the Services based thereon, developed, manufactured, used or sold
by DCL that includes in whole or in part any of the Licensed Technology; (2) any
claim for injury, damages, or any other harm alleged to be caused to any third
party (“Claim”) by Services provided by HDC or its licensees unless such Claim
results from the negligence or willful misconduct of DCL. In
accordance with the foregoing, HDC shall be obligated to defend DCL in any cause
of action commenced against HDC, or in which HDC is named as a party, for a
Claim unless such Claim results from the negligence or willful misconduct of
HDC.
(2) DCL
shall indemnify and hold HDC harmless from any Claim
by Services provided by DCL unless such Claim results from
the negligence or willful misconduct of HDC. In accordance with the
foregoing, DCL shall be obligated to defend HDC in any cause of action commenced
against HDC, or in which HDC is named as a party, for a Claim unless such Claim
results from the negligence or willful misconduct of DCL.
(3) In
either case, the indemnity shall include all penalties, settlements, awards, and
judgments; all court and arbitration costs; attorneys’ fees; and other
reasonable out-of-pocket expenses and costs incurred by DCL or HDC, as the case
may be, in connection with such claims or causes of action. DCL or
HDC, as the case may be, shall have the right to control the defense of any such
litigation, and to settle or compromise all claims and lawsuits subject to its
indemnity, provided however, that DCL or HDC, as the case may be, may not settle
or compromise any such claim or lawsuit without the prior written consent of DCL
or HDC, as the case may be, which consent shall not be unreasonably withheld, if
any settlement or compromise (a) requires HDC or DCL, as the case may be, to
part with any right or to make any payment not indemnified, or (b) subjects HDC
or DCL, as the case may be, to any injunction. Subject to the
foregoing, HDC or DCL shall have the right, at its option and expense, but not
the obligation, to retain advisory counsel to represent its interests in
defending any such claim or lawsuit. The parties’ obligation to
indemnify and hold each other harmless shall survive the termination of this
Agreement for any reason.
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D. Confidentiality and Limited
Use Provisions
(1) DCL
shall have the right to use HDC’s Confidential Information only in connection
with performance under this Agreement, including without limitation the
development and commercialization of Services. Except as specifically
provided herein, prior to the fifteenth (15th) anniversary of the Effective Date
of this Agreement, which period is anticipated to be the useful life of HDC’s
Confidential Information transmitted to DCL hereunder, DCL shall not disclose
any Confidential Information of HDC to any party or furnish to any party any
equipment embodying any such Confidential Information; provided, however, that
either party may disclose the portion of the Confidential Information relevant
in a given situation to any government agency concerned with public health or
safety provided that:
(a) the
agency agrees to treat the disclosed portion of Confidential Information as
proprietary and confidential or failure to make the disclosure would
substantially adversely affect the ability of DCL to market or continue to sell
Services, and
(b) HDC is
informed in advance of the proposed disclosure.
(2) HDC
shall use the Slides, Images, Clinical Data and DCL Confidential Information
only in connection with the performance under this Agreement and will not
disclose such Slides, Images, Clinical Data or DCL Confidential Information to
any third party without DCL’s prior written consent, not unreasonably withheld
or delayed. Upon termination or expiration of the Agreement, HDC will
return to DCL or destroy any Slides, Images, Clinical Data or DCL Confidential
Information at the direction of DCL.
(3) If
DCL or HDC is compelled by law to disclose any portion of the Confidential
Information without a guarantee of confidentiality, the parties will notify each
other and consent to the other party’s intervention to the extent of
presenting arguments for the preservation of the confidentiality of the
Confidential Information.
(4) HDC agrees to comply with
all applicable laws, rules and regulations applicable to the use of the Slides
and Clinical Data including the Health Insurance Portability Act of 1996 as may
be amended from time to time (“HIPPA”).
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ARTICLE V – REPORTS,
REMITTANCES AND RECORDS
A. Reports and
Remittances
(1) DCL
shall report in writing to HDC within thirty (30) days after the end of each
calendar quarter the quantities of screening tests performed, associated
revenue, applicable expenses and the calculation of the fees thereon
during said quarter. With said report DCL shall pay to HDC the total
amount of the said fees. Reports, notices and other communications to
HDC hereunder shall be sent to:
Xxxxx X.
Xxxxxxxx, M.D.
0 Xxxx
Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Each
payment to HDC hereunder shall be made by wire transfer of immediately available
funds:
Bank of
America
Attn: Xxxxxxx
X. X’Xxxx
000 Xxxx
Xxxxxx
Xxxxxxxx,
XX 00000
(2)
In the event HDC: (a) sells Services through a HDC Lab as permitted
hereunder; or (b) licenses a Rejected Application to a third party, HDC shall
report in writing to DCL within thirty (30) days after the end of each calendar
quarter the performed, associated revenue, applicable expenses and the
calculation of the fees payable thereon during said quarter. of
.. With said report HDC shall pay to DCL the total amount of the said
fees. Reports, notices and other communications to DCL shall be
sent to: Xxxxxxx Xxxxxxx, Ph.D., President and CEO, 0000 Xxxxxxxxxx
Xx., Xxxxxxxxxxxx, XX 00000. Each payment to DCL hereunder shall be
made by check of immediately available funds to:
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DCL
Medical Laboratories
Attn: Xxx
Xxxxxx
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx,
XX 00000
B. Taxes
DCL shall pay all taxes and charges
imposed by any government or taxing authority (other than the United States or a
subdivision thereof) with respect to payments by DCL to HDC for transfer of the
Licensed Technology. To the extent DCL is required to withhold such
taxes or charges, the amounts due from DCL to HDC shall be recalculated so as to
yield to HDC, after deduction for such taxes or charges, the amounts otherwise
due.
C.
Late Payment and Right
to Offset Nonpayments
If any sum of money owed to either
party hereunder is not paid when due, the unpaid amount shall bear interest,
compounded annually, at an annual rate two (2) percentage points above the prime
rate quoted by the Bank of America on the day payment was due, until paid or
offset.
D. Records
(1) For
a period of three (3) years following the applicable reporting quarter, DCL
shall keep adequate records in sufficient detail to enable the fees due from DCL
hereunder to be determined, and permit said records to be inspected
upon commercially reasonable notice to DCL (but in no event, more than once per
calendar year), during regular business hours by an independent auditor
appointed by HDC and approved by DCL solely for this purpose, who shall report
to HDC only the amount of the fees due hereunder. Any such audit will be at the
expense of HDC unless a discrepancy of 5% or more is found, in which case DCL
shall pay for the audit.
(2)
For a period of three (3) years following the applicable reporting quarter, HDC
shall keep, and require each sublicensee to keep, adequate records in sufficient
detail to enable the fees due from HDC hereunder to be determined, and permit
said records to be inspected upon commercially reasonable notice to
HDC (but in no event, more than once per calendar year), during regular business
hours by an independent auditor appointed by DCL and approved by HDC solely for
this purpose, who shall report to DCL only the amount of the fees due
hereunder. Any such audit will be at the expense of DCL unless a
discrepancy of 5% or more is found, in which case HDC shall pay for the
audit.
ARTICLE VI – INTELLECTUAL
PROPERTY
A. HDC
shall retain exclusive ownership rights in the intellectual property relating to
any methods, discoveries or products derived from development work initiated by
HDC prior to the Effective Date.
B. DCL
shall retain exclusive ownership rights in the Slides, Clinical Data, and DCL’s
intellectual property relating to any methods, discoveries or products derived
from development work initiated by DCL prior to the Effective Date. DCL owns the
Slides and Clinical Data as of the Effective Date.
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C. HDC
shall own and have the right to use the intellectual property relating to any
Application and new mathematical or other tools developed during the course this
License and Development Agreement, subject to the terms and conditions
hereunder.
D. To
the extent that the development, sale, manufacture, offer for sale, importation
or use of the Service infringes any existing intellectual property rights owned
or controlled by HDC, HDC hereby grants to DCL a royalty-free license to such
intellectual property for use in the development, manufacture, offer for sale,
sale, use and importation of Services.
ARTICLE VII –
TERMINATION
A. Normal
Termination
Unless terminated earlier as
hereinafter provided, and subject to the provisions of paragraph (B) of this
Article, this Agreement shall terminate on the fifteenth (15th) anniversary of
its Effective Date or
upon the expiration of the last of the patents licensed hereunder, whichever
date shall later occur.
B.
Surviving
Obligations
(1) The
termination of this Agreement shall not relieve either party of (a) any
obligation hereunder to keep records, (b) to make payment of any sum due under
this Agreement and (c) to furnish written reports as provided
herein.
(2) The
termination of this Agreement shall not relieve DCL of any liability hereunder
for damages to HDC resulting from the unauthorized disclosure or use of any
Confidential HDC Information by any engineering firm, equipment manufacturing
firm or other party or person; or
(3) The
termination of this Agreement shall not relieve HDC of any obligation hereunder
to maintain the confidentiality of DCL’s Confidential Information, including
without limitation, Slides, and Clinical Data, and of any liability hereunder
for damages to DCL resulting from the unauthorized disclosure or use of DCL
Confidential Information, including without limitation, Slides, and Clinical
Data, and to return or destroy such Slides, Images and Clinical Data as directed
by DCL.
(4) The
termination of this Agreement shall not terminate either party’s rights under
Article IV.
C.
Termination for
Breach
In the event that any stipulation or
provision of this Agreement is breached by a party, the non-breaching party may
terminate this Agreement upon sixty (60) days’ written notice to the other
party. However, if such breach is corrected within the sixty (60)-day
period, and there are no unreimbursed damages resulting from the breach, this
Agreement shall continue in force.
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D.
Insolvency
Should a party (1) become insolvent or
unable to pay its debts as they mature, or (2) make an assignment for the
benefit of creditors, or (3) permit or procure the appointment of a receiver for
its assets, or (4) become the subject of any bankruptcy, insolvency or similar
proceeding, then the other party may at any time thereafter on written notice to
the first party, effective forthwith, cancel this Agreement.
E.
Effect of Early
Termination
Should this Agreement be terminated
prior to the fifteenth (15th) anniversary of the Effective Date of this
Agreement, then neither party shall neither use or disclose any Confidential
Information of the other party or furnish to any party any equipment embodying
the same, until after said fifteenth (15th) anniversary. Furthermore,
each party shall return to the other party all
Confidential Information provided pursuant to this Agreement, together with all
reproductions thereof, and all copies of notebooks, reports, manuals,
blueprints, drawings and the like embodying any Confidential Information in the
possession of the respective party .
E.
Termination by
DCL
DCL may terminate an Application upon
thirty (30) days’ written notice to HDC in the event an Application is not
validated within twelve (12) months after the Effective Date.
ARTICLE VIII -
ASSIGNABILITY
Neither this Agreement nor the rights
or licenses granted hereunder shall be assignable or otherwise transferable by
either party; provided, however that (a) in the event of the acquisition of the
business and assets of DCL, payment of the fees under the Rejected Application
provisions in Article VI of this Agreement shall continue and inure to the
benefit of any successor of DCL in connection with a merger, consolidation, or
sale or transfer of all or substantially all of DCL’s assets or that portion of
its business pertaining to the subject matter of this Agreement without the
prior written consent of the other party and (b) in the event of the acquisition
of the business and assets of HDC, the assignee or successor shall retain all of
the rights HDC acquired under this Agreement. In either case, the
acquiring party shall assume all of the obligations of the acquired party under
this Agreement. For the avoidance of doubt, license rights granted to DCL under
Article II of this Agreement shall not be assignable to any successor in
connection with a merger, consolidation, or sale or transfer of all or
substantially all of its assets or that portion of its business pertaining to
the subject matter of this Agreement without the express prior written consent
of HDC.
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ARTICLE IX - APPLICABLE
LAW
This Agreement is acknowledged to have
been made in and shall be construed in accordance with the laws of the State of
Delaware without regard to the principles thereof relating to the conflict of
laws, provided that all questions concerning the construction or effect of
patent applications and patents shall be decided in accordance with the laws of
the country in which the particular patent application or patent concerned has
been filed or granted, as the case may be.
ARTICLE X - FORCE
MAJEURE
Neither party shall be responsible to
the other for delay or failure in performance of any of the obligations imposed
by this Agreement, provided such delay or failure shall be occasioned by a cause
beyond the control of and without the fault or negligence of such
party, including fire, flood, explosion, lightning, windstorm,
earthquake, subsidence of soil, failure of machinery or equipment or supply of
materials, discontinuity in the supply of power, court order or governmental
interference, civil commotion, riot, war, terrorism or terroristic threats,
strikes, labor disturbances, transportation difficulties or labor
shortage. Notwithstanding the aforesaid, if either party fails to a
substantial extent for at least three (3) months to fulfill any of its
obligations under this Agreement, the other party may terminate the
Agreement.
ARTICLE XI – DISPUTE
RESOLUTION
In the event that a dispute arises
between the parties, the following procedures shall be followed:
A. Negotiations
In the event that any dispute may
arise, the parties shall first seek to resolve any disputes by negotiation among
senior executives who have authority to settle the controversy, as
follows:
(1) Notification. When
a party believes there is a dispute relating to the Agreement, the party will
give the other party written notice of the dispute.
(2) Meeting
Among Senior Executives. The senior executives shall meet at a
mutually acceptable time and place within thirty (30) days after the date of the
notice to exchange relevant information and to attempt to resolve the
dispute.
(3) Confidentiality. All
negotiations are confidential and shall be treated as compromise and settlement
negotiations under the United States Federal Rules of Evidence.
B. Mediation
If the
dispute has not been resolved within thirty (30) days after the date of the
notice of a dispute, or if the party receiving such notice fails or refuses to
meet within such time period, either party may initiate mediation of the dispute
by sending the other party a written request that the dispute be
mediated. The party receiving such a written request will promptly
respond to the requesting party so that all parties can jointly select a neutral
and impartial mediator and schedule the mediation session. The
parties shall mediate the dispute before a neutral, third-party mediator within
thirty (30) days after the date of the written request for
mediation.
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C. Arbitration
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Arbitration
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(1) Any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, and not settled as
described in Article XII (A) or (B) that is not an “Excluded Claim”, shall be
settled by binding arbitration in accordance with the Commercial Arbitration
Rules and Supplementary Procedures for Large Complex Disputes of the American
Arbitration Association, and judgment on the arbitration award may be entered in
any Court having jurisdiction thereof.
(2) The arbitration shall be conducted
by a panel of three (3) persons experienced in the clinical laboratory,
biotechnology or diagnostics business. Within thirty (30) days after
initiation of arbitration, each party shall select one person to act as
arbitrator and the two party-selected arbitrators shall select a third
arbitrator within thirty (30) days of their appointment. If the
arbitrators selected by the parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the AAA. The
place of arbitration shall be New York, New York, and all proceedings and
communications shall be in English.
(3) Either party may apply to the
arbitrators for interim injunctive relief until the arbitration award is
rendered or the controversy is otherwise resolved. Either party also
may, without waiving any remedy under this Agreement, seek from any court having
jurisdiction any injunctive or provisional relief necessary to protect the
rights or property of that party pending the arbitration award. The
arbitrators shall have no authority to award punitive or any other type of
damages not measured by a party’s compensatory damages. Each party
shall bear its own costs and expenses and attorneys’ fees and an equal share of
the arbitrators’ and any administrative fees of arbitration.
(4) Except to the extent
necessary to confirm an award or as may be required by law, neither a party nor
an arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both parties. In no event shall
arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred
by the applicable Delaware statute of limitations.
(5) As
used in this Article, the term “Excluded Claim” shall mean a dispute,
controversy or claim that concerns (a) the validity or infringement of a patent;
or (b) any antitrust, anti-monopoly or competition law or regulation, whether or
not statutory.
13
ARTICLE XII – MISCELLANEOUS
PROVISIONS
A.
HDC and DCL each has all necessary corporate power to enter into and perform its
obligations under this Agreement and has taken all necessary corporate action
pursuant to its certificate of incorporation and by-laws to authorize the
execution and consummation of this Agreement.
B.
The use and disclosure of technical information acquired pursuant to this
Agreement and the exercise of the rights granted by this Agreement shall be
subject to the export, assets and financial control regulations of the United
States of America and (country), including restrictions under regulations of the
United States that may be applicable to direct or indirect
reexportation.
C.
No license or right is granted by implication or otherwise with respect to any
patent application, patent, trademark or copyright except as specifically set
forth herein. No right is granted by this Agreement to use any
registered or unregistered trademark or trade name of either party.
D.
The rights and remedies provided in this Agreement are cumulative and not
exclusive of any rights or remedies provided by law or in equity.
E.
Unless required by law or in accordance with any obligation to a governmental
authority, neither HDC nor DCL shall make any public statement or other
disclosure of the existence or terms of this Agreement or the License without
the express prior written consent of the other party as to the nature and
substance of such statement or other disclosure. However, it is the expectation
of the parties that they will issue a joint press release announcing this
Agreement and the License granted hereunder promptly after the Effective
Date.
F.
This Agreement embodies the entire understanding of the parties and shall
supersede all previous communications, representations, undertakings, letters of
intent or agreements, specifically the Letter of Intent executed by the parties
effective [_________]between them, either verbal or written, relating to the
subject matter hereof. No modifications, extensions or waiver of any
provision hereof or release of any right hereunder will be valid unless the same
is in writing and consented to by both parties. This Agreement may be
amended only by a written agreement signed by both parties.
G.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and upon their respective successors, and permitted
assignees.
H.
It is expressly agreed that HDC and DCL shall be independent contractors and
that the relationship between the two parties shall not constitute a
partnership, joint venture or agency. Neither HDC nor DCL shall have
the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other party, without
the prior written consent of the other party.
14
IN WITNESS WHEREOF, the parties have
executed this Agreement and have entered the effective date on the first page
hereof.
HEALTH DISCOVERY CORPORATION | |||
By
|
/s/ Xxxxxxx X. Xxxxxxxx, M.D. | ||
Name
|
Xxxxxxx X. Xxxxxxxx,
M.D.
|
||
Title
|
CEO | ||
Date
|
7-14-08 | ||
DCL MEDICAL LABORATORIES, LLC | |||
By
|
/s/ Xxxxxxx Xxxxxxx | ||
Name
|
Xxxxxxx
Xxxxxxx
|
||
Title
|
President | ||
Date
|
7-14-08 |
15
SCHEDULE
A
Normal
|
||
Country
|
Patent
No.
|
Expiry
Date
|
(Patent Application
No.)
|
(Filing
Date)
|
16