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Exhibit 10.30
LICENSE AND DEVELOPMENT AGREEMENT
This Agreement is entered as of March 24, 2000 (the "Effective Date") by
and between AccuMed International, Inc. ("AccuMed"), a Delaware corporation,
with a place of business at 000 X. Xxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 and
Ventana Medical Systems, Inc. ("Ventana"), a Delaware corporation, with a place
of business at 0000 X. Xxxxxxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000.
1. DEFINITIONS.
"AccuMed Imaging Assets" shall mean all the assets, properties,
rights, titles and interests of every kind and nature, whether tangible or
intangible, worldwide related to AccuMed's imaging products, systems, or
services, including but not limited to fixed assets, equipment, tooling,
intellectual property rights, designs, software, and rights existing under
agreements of any type (including but not limited to development and marketing
contracts).
"AccuMed Intellectual Property Rights" shall mean all
intellectual property rights now or hereafter owned, licensed, or controlled by
AccuMed or any of its Subsidiaries, including but not limited to AccuMed Patent
Rights and AccuMed Technical Information, and any other patent rights,
copyrights, trademarks, and trade secret rights of AccuMed.
"AccuMed Patent Rights" shall mean any patent rights (including
rights to issued patents and pending patent applications) now or hereafter
owned, licensed, or controlled by AccuMed or any of its Subsidiaries during the
term of this Agreement, including but not limited to rights to the patents and
patent applications listed in Exhibit 1-1 (along with any divisionals,
continuations, continuations-in-part, reissues, re-examinations,
re-registrations or extensions thereof).
"AccuMed Software" shall mean AccuMed's pre-existing and
later-developed software, tools, modules, products, and related documentation,
and any updates made thereto, in both object code and source code form including
but not limited to related Source Code owned by AccuMed. AccuMed Software
includes, but is not limited to, any AccuMed software or data incorporated into
any Software Products or other deliverables provided to Ventana under this
Agreement.
"AccuMed Technical Information" shall mean all of AccuMed's trade
secrets, information, and know-how, now or hereafter owned, licensed or
controlled by AccuMed or any of its Subsidiaries during the term of this
Agreement.
"Alpha Testing" shall mean the alpha testing of Engineering
Prototypes of the imaging hardware platform AccuMed will supply Ventana and of
each Software
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Product. Alpha Testing shall consist of Ventana's testing with assistance from
AccuMed of the performance of a product against a performance protocol to be
established by Ventana under this Agreement where such testing may be done
in-house at either Ventana's and/or AccuMed's facilities as Ventana may decide
in its sole discretion. A product shall be considered to have passed Alpha
Testing if it performs to the performance protocol as demonstrated to Ventana's
reasonable satisfaction.
"Basic Imaging and Report Generation Product" shall mean a
software product for capturing an image of tissue mounted on a microscope slide,
manipulating the image, and preparing a report to Ventana's specifications as
will be more fully described in the Marketing Specifications.
"Beta Testing" shall mean the beta testing of Manufacturing
Prototypes to a performance protocol established by Ventana in Ventana customer
labs as selected by Ventana for a period determined by Ventana in its sole
discretion. A product will be considered to have passed Beta Testing if it
performs to the performance protocol in all customer labs selected by Ventana
for Beta Testing.
"Breast Cancer Panel" shall mean [***]software products for
performing quantitated immunohistochemistry (QIHC) on patient breast cancer
slides stained for estrogen receptor, progesterone receptor, proliferation
receptor (as measured using either Ki-67 or MIB-1 antibodies) and her-2/neu
receptor as will be more fully described in the Marketing Specifications.
"Developed Software" shall mean all software and related
documentation developed by AccuMed for Ventana under this Agreement and any
updates made thereto.
"Development Plan" and "Development Schedule" will mean,
respectively, a plan and schedule designated as such in Section 6.1.
"Direct Costs" shall mean personnel, supplies, materials, and
contracted and outside services costs attributable to the materials or for the
production of an item.
"Effective Date" is defined in the preamble to the Agreement.
"Engineering Prototypes" shall mean fully developed hardware or
software products related to the Imaging System to be delivered to Ventana that
have not yet passed Alpha Testing.
"Excluded Field" shall mean but not limited to: [***] Excluded
Field shall not extend to Ventana's Medical Research Sales and Internal Research
and Development.
"FDA Approval" shall have the meaning specified in Section 9.1.6.
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"Field" [***] Field shall exclude the Excluded Field.
"Field Exclusivity" shall mean the rights granted to Ventana and
the restrictions on AccuMed as specified in Section 5.1.
"Foreground Technology" shall have the meaning specified in
Section 3.1.
"Functional Specifications" shall mean a detailed engineering
specification that is in accordance with the Marketing Specifications and which
will be used by software and hardware engineers to develop the Imaging System
and Software Products.
"Imaging System" shall mean an automated pathology imaging system
based on AccuMed's existing AcCell 2001 workstation and to be further developed
by AccuMed in conformance with the Functional Specifications and improvements
made thereto by either party during the term of this Agreement. The Imaging
System includes but is not limited to certain basic software used in the
operation of the Imaging System.
"Installations" shall have the meaning specified in Section 7.4.
"Internal Research and Development" shall mean the internal use
of Imaging Systems by employees and contractors of a party to this Agreement
only for research and development.
"Maintenance" shall have the meaning specified in Section 7.4.
"Manufacturing Prototypes" shall mean the initial manufacturing
prototypes of the Imaging System and each Software Product manufactured or made
by AccuMed to be delivered to Ventana for Beta Testing in Ventana customer labs.
"Manufactured Product" shall mean each Imaging System
manufactured and sold by AccuMed to Ventana hereunder.
"Marketing Specifications" shall mean a detailed specification of
the performance requirements for the Imaging System and the Software Products
prepared by Ventana and will be an expanded version of the specifications
contained in Exhibit 1-2.
"Master Validation Protocol" shall mean a master validation
protocol used by Ventana to seek FDA 510k approval from the U.S. Food and Drug
Administration for the Imaging System and Software Products.
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"Medical Research Sales" shall mean the sale by or under the
authority of a party to this Agreement of Imaging Systems to end customers only
for their internal medical research purposes, and expressly excludes the use or
sale of such Imaging Systems for: (i) any commercial use or gain by any such end
customers, (ii) any commercial use in the direct or indirect treatment of
patients, or (iii) any resale or further distribution by such end customers.
"Payment Report" shall mean a report designated as such in
Section 9.5.3.
"Ploidy Product" shall mean a software product to be developed by
AccuMed for Ventana for conducting DNA ploidy analysis as will be more fully
described in the Marketing Specifications.
"Product Exclusivity" shall mean the exclusivity of the licenses
granted to Ventana in Article 2.
"Products" shall mean any medical products and systems, including
but not limited to the [***] Products shall also include any subsequent hardware
and software products developed by AccuMed for Ventana under this Agreement.
"Proprietary Information" shall have the meaning specified in
Section 4.1.
"Rare Event Detection Product" shall mean a software product to
be developed by AccuMed for Ventana that will permit Ventana [***] The FDA
labeling that Ventana will be seeking and the protocol that will be required by
the FDA to obtain this label is referenced in Exhibit 1-4.
"Royalty Product" shall mean an Imaging System manufactured and
sold by or under the authority of Ventana. Royalty Product shall exclude any
Manufactured Product.
"Subsidiaries" shall mean any legal entity more than or equal to
fifty percent (50%) of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are,
now or hereafter, owned or controlled, directly or indirectly by a party.
"Software Products" shall mean any software product developed or
customized for Ventana under this Agreement, including but not limited to the
[***]
"Source Code" shall mean all source code and documentation for
the Software Products and any other software related to or used with any Imaging
System, and updates to all of the foregoing during the term of this Agreement.
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"Technology Transfer" shall mean the transfer of AccuMed
Intellectual Property Rights embodied in tangible form, including copies of any
issued patents and pending patent applications, to Ventana as set forth in
Article 8.
"Telepathology Product" shall mean[***]
2. Grant of LicenseS.
2.1 Subject to the terms and conditions of this Agreement, AccuMed
hereby grants to Ventana and its Subsidiaries a perpetual, irrevocable,
worldwide, royalty-free (except as otherwise provided to be royalty-bearing
hereunder) license under AccuMed Patent Rights and AccuMed Technical Information
to use, make, have made, import, offer to sell and sell Products and to practice
any process or method involved in the manufacture or use of Products. The
foregoing license shall be (i) exclusive in the Field (even as against AccuMed
except as provided in Section 2.4 below) and non-exclusive outside the Field,
provided that such non-exclusive license shall not extend to the Excluded Field;
and (ii) sublicensable with AccuMed's written approval, which shall not be
unreasonably withheld.
2.2 Subject to the terms and conditions of this Agreement, AccuMed
hereby grants to Ventana and its Subsidiaries a sublicensable, perpetual,
irrevocable, worldwide, royalty-free (except as otherwise provided to be
royalty-bearing hereunder) license under AccuMed Intellectual Property Rights to
use, reproduce, distribute (directly or indirectly through one or more levels of
distribution), modify, adapt, and create derivative works of the AccuMed
Software (including any modifications and derivative works thereof made by
Ventana) and to otherwise utilize the AccuMed Software in the manufacture, sale,
or design of Products; provided that the AccuMed Software and modifications and
derivative works thereof may be distributed only in source and object code form
integrated into or bundled with Products or as updates of the AccuMed Software
provided to end-user customers of Products. The foregoing license shall be (i)
exclusive in the Field (even as against AccuMed) and non-exclusive outside the
Field, provided that such non-exclusive license shall not extend to the Excluded
Field; and (ii) sublicensable with AccuMed's written approval, which shall not
be unreasonably withheld.
2.2.1 With respect only to Source Code owned by AccuMed, the
foregoing license shall be limited to the maintenance, support, and continued
development of the Software Products and any other software related to or useful
with the Imaging System.
2.3 License Grant-Back. Subject to the terms and conditions of this
Agreement and during the term hereof, Ventana hereby grants to AccuMed a
non-exclusive, worldwide, non-sublicensable, royalty-free license, but only
outside of the
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Field, to use, reproduce, distribute, modify, adapt, and create derivative works
of the Developed Software; provided that the Developed Software may be
distributed only in source and object code form under the terms of an End-User
Software License reasonably acceptable to and approved in advance in writing by
Ventana.
2.4 Reservation. The license granted in Section 2.1 above is subject to
a reserved worldwide non-exclusive license in the Field to AccuMed solely for
Internal Research and Development and Medical Research Sales, subject to
AccuMed's obtaining a written agreement from end customers of Medical Research
Sales that any Imaging Systems sold are not licensed for commercial use by
others in the direct or indirect treatment of patients and shall not be resold
or further distributed.
2.5 Improvements. Any AccuMed modifications or improvements to the
AccuMed Software or Imaging System made before the termination of this Agreement
shall be included in the licenses of this Article 2 without additional charge to
Ventana. AccuMed agrees to promptly disclose such modifications and
improvements. To assist in the transfer of modifications and improvements,
Ventana shall be entitled to have a development engineer observe the operations
of AccuMed related to the subject matter of the licenses of this Article 2 for
up to one month per year during the term of this Agreement.
3. OWNERSHIP.
3.1 Ownership. Ventana shall exclusively own all right, title and
interest (including patent rights, copyrights, trade secret rights, mask work
rights and all other intellectual and industrial property rights of any sort
throughout the world) in any inventions, works of authorship, mask works, ideas
or information made or conceived or reduced to practice by AccuMed in the course
of performance under this Agreement (the "Foreground Technology"), which course
of performance shall include without limitation the initial and future
development of the Imaging System and Software Products or any maintenance
provided by AccuMed hereunder as part of this Agreement. However, Ventana shall
have no ownership of any Developer Stock. "Developer Stock" shall mean AccuMed's
preexisting software engines, development tools and routines, as well as
derivatives and modifications thereof; provided that if any such derivative or
modification is made in the course of performance under this Agreement, then it
will qualify as Developer Stock only if it (i) has substantially the same
functionality as other Developer Stock and (ii) has general applicability apart
from the Software Products.
3.1.1 AccuMed may use third party software in the software to be
delivered to Ventana under this Agreement; provided that (i) Ventana obtains the
rights from such third parties necessary to provide all rights granted to
Ventana under this Agreement and (ii) AccuMed obtains such third party software
at AccuMed's sole expense. Notwithstanding the foregoing, Ventana shall be
responsible for obtaining a license for the software to be used in the
Telepathology Product. If AccuMed uses Accumed or third party software or data
in any software or other materials to be delivered to Ventana under this
Agreement, AccuMed shall identify the software modules
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containing AccuMed Software and separately identify the modules containing third
party software at the time of delivery to Ventana.
3.2 AccuMed hereby makes and agrees to make any assignments necessary to
accomplish the foregoing ownership provisions. In interpreting such ownership
provisions anything made or conceived or reduced to practice by an employee or
contractor of AccuMed in the course of performance under this Agreement will be
deemed so made or conceived or reduced to practice by that party; AccuMed has
and will have appropriate agreements with all such employees and contractors
necessary to fully effect the provisions of this Article 3.
3.3 Ventana will have the exclusive right to, and, at Ventana's expense,
AccuMed agrees to assist Ventana in every proper way (including, without
limitation, becoming a nominal party) to, evidence, record and perfect the
foregoing assignments and to apply for and obtain recordation of and from time
to time enforce, maintain, and defend any proprietary right assigned to Ventana
under this Agreement. AccuMed will execute all documents Ventana may reasonably
request for such purposes.
3.4 Any assignment by AccuMed of copyright hereunder includes all rights
of paternity, integrity, disclosure and withdrawal and any other rights that may
be known as or referred to as "moral rights" (collectively "Moral Rights"). To
the extent such Moral Rights cannot be assigned under applicable law and to the
extent the following is allowed by the laws in the various countries where Moral
Rights exist, AccuMed hereby ratifies and consents to any action consistent with
the terms of this Agreement that would violate such Moral Rights in the absence
of such ratification/consent. AccuMed will confirm any such ratifications and
consents from time to time as requested by Ventana.
4. Confidential Information.
4.1 Confidentiality. Each party agrees that all inventions, processes,
materials, chemicals, know-how and ideas and all other business, technical and
financial information they obtain from the other are the confidential property
of the disclosing party ("Proprietary Information" of the disclosing party).
Except as expressly allowed in this Agreement, the receiving party will hold in
confidence and not use or disclose any Proprietary Information of the disclosing
party and shall similarly bind its employees in writing. The receiving party
shall not be obligated under this Section 4.1: (i) beyond five years after
termination of this Agreement or (ii) with respect to information the receiving
party can document:
(a) is or has become readily publicly available through no fault
of the receiving party or its employees or agents; or
(b) is received from a third party lawfully in possession of such
information and lawfully empowered to disclose such information and provided the
receiving party abides by all restrictions imposed by such third party; or
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(c) was rightfully in the possession of the receiving party prior
to its disclosure by the other party provided the receiving party abides by all
restrictions imposed on its possession of such information; or
(d) was independently developed by employees or consultants of
the receiving party without access to such Proprietary Information.
5. field Exclusivity.
5.1 Neither AccuMed nor any Subsidiary shall develop, manufacture,
purchase, distribute, or market anywhere worldwide during the term of this
Agreement (or have or enter into any agreement or arrangement with respect to)
any product or system: (i) competitive with or substantially similar to the
Imaging System or Software Products or (ii) in the Field.
5.2 Termination of Field Exclusivity shall have no effect on Product
Exclusivity under the licenses granted to Ventana under Article 2.
6. PRODUCT DEVELOPMENT.
6.1 Imaging System and Software Product Specifications. With respect to
the Imaging System and the Software Products, AccuMed shall, within [***]of
receiving the Marketing Specifications, complete the Functional Specifications
and a development plan and schedule consistent with the Marketing Specifications
("Development Plan" and "Development Schedule") for the Imaging System and the
Software Products. Ventana agrees to consult with and assist AccuMed in doing so
including but not limited to providing AccuMed's development engineers with
ongoing assistance by Ventana's medical experts as reasonably necessary to
develop the Software Products with functionality consistent with the Functional
Specifications and Ventana's intended customer markets. The completed Functional
Specifications and Development Plan and changes thereto are subject to the
approval of Ventana, which approval shall not be unreasonably withheld.
6.2 AccuMed's Development Obligations. For the Imaging System and
Software Products, AccuMed will perform the following activities consistent with
the Functional Specifications, Development Plan, and Development Schedule: (i)
undertake and complete development of the Imaging System and Software Products
as set forth in the completed Functional Specifications, including manufacturing
scale-up, (ii) prepare and provide Ventana with development information for the
Imaging System and Software Products as necessary or reasonably desirable for
any regulatory filings, (iii) assist with Alpha Testing and Beta Testing of the
Imaging System and Software Products as set forth herein, and (iv) deliver the
Engineering Prototypes and Manufacturing Prototypes to Ventana.
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6.2.1 Within [***] of the Effective Date, AccuMed shall deliver
to Ventana a first Engineering Prototype of the Imaging System and an
Engineering Prototype of the Rare Event Detection Product (each in a form
suitable for conducting FDA clinical trials).
6.2.2 Within [***] of the Effective Date, AccuMed shall deliver a
second Engineering Prototype of the Imaging System and Engineering Prototypes of
the [***].
6.2.3 Within [***] of the Effective Date, AccuMed shall deliver
the Engineering Prototype for the [***].
6.2.4 AccuMed shall deliver [***] Manufacturing Prototypes of the
Imaging System and [***] copies of each of the [***]
6.2.5 AccuMed shall deliver [***] Manufacturing Prototypes of the
[***] to Ventana for Beta Testing within 10 days of the completion of Alpha
Testing thereof.
6.2.6 Telepathology Product. AccuMed shall assist Ventana in its
search for and selection of a third party vendor for a software product suitable
for customization by AccuMed to deliver the Telepathology Product under this
Agreement. AccuMed or its contractors shall perform customization to such
vendor's product as necessary to ensure compliance with the Functional
Specifications and the compatibility and interoperability of the Telepathology
Product with the Imaging System and other Software Products and the manner of
Ventana's intended use thereof. AccuMed shall deliver an Engineering Prototype
and a Manufacturing Prototype of the Telepathology Product to Ventana on
reasonable successive dates consistent with other delivery dates hereunder and
as mutually agreed by the parties.
6.3 Ventana's Development Obligations.
6.3.1 Ventana shall provide AccuMed with the Marketing
Specifications within 15 days after the Effective Date for AccuMed's use in
preparing the Functional Specifications.
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6.3.2 Ventana shall complete Alpha Testing for the first
Engineering Prototype of the Imaging System and the Engineering Prototype of the
[***]to be delivered under Section 6.2.1 within [***]of the receipt thereof.
6.3.3 Ventana shall complete Alpha Testing for the second
Engineering Prototype of the Imaging System and the Engineering Prototypes of
the [***]to be delivered under Section 6.2.2 within [***]of the receipt thereof.
6.3.4 Ventana shall complete Beta Testing for the Manufacturing
Prototypes of the Imaging System, the [***]to be delivered under Section 6.2.4
within [***]of the receipt thereof.
6.3.5 Ventana shall complete Alpha Testing for the Engineering
Prototype of the [***]to be delivered under Section 6.2.3 within [***]of the
receipt thereof.
6.3.6 Ventana shall complete Beta Testing for the Manufacturing
Prototype of the [***]to be delivered under Section 6.2.5 within [***]of the
receipt thereof.
6.3.7 Ventana may in its sole discretion and at its expense
obtain any regulatory approvals necessary for Ventana's manufacturing, sales,
marketing, and service of the Imaging System, including but not limited to any
beta testing of the Manufacturing Prototypes by Ventana. Ventana's obligations
hereunder shall include, without limitation, all testing and other activity
necessary or useful to ensure compliance with applicable governmental or
administrative rules and regulations. Ventana shall be entitled to submit the
filings in its name.
6.3.8 Ventana shall commence FDA clinical trials for the Master
Validation Protocol within [***]after the completion of Alpha Testing for the
first Engineering Prototype of the Imaging System and the Engineering Prototype
of the [***]with an expectation of FDA clearance within [***]of the Effective
Date, assuming the Rare Event Detection Product is delivered by AccuMed on time
as provided hereunder and passes Alpha Testing within [***]of receipt by
Ventana.
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6.4 Acceptance.
6.4.1 Acceptance of Deliverables. All deliverables provided by
AccuMed under this Agreement shall be delivered for Ventana's acceptance testing
in accordance with the acceptance procedure set forth in Section 6.4.2 below.
Prior to each delivery, AccuMed shall have completed all required testing
applicable to such deliverables to ensure material compliance with the
applicable specifications hereunder.
6.4.2 Acceptance Testing.
(a) Acceptance Standards. Following receipt of each deliverable,
including but not limited to any deliverables intended for Alpha Testing or Beta
Testing, Ventana shall have the time period for testing as set forth under this
Agreement, or if not otherwise set forth herein for any deliverable, a time
period of 30 days (the "Verification Period") in which to use commercially
reasonable efforts to review, examine and verify such deliverable and notify
AccuMed of either: (a) any material failure thereof as determined by Ventana to
meet the applicable specifications, or (b) any other rejection for technical
reasons by Ventana as determined in its reasonable sole discretion (a
"Failure").
(b) Beta Testing. Any deliverable subject to Beta Testing
hereunder shall also be subject to technical acceptance by Ventana's selected
beta site customers. Such technical acceptance shall be determined by such
customer in its sole reasonable discretion. Such technical acceptance shall be
communicated to AccuMed by Ventana and shall be subject to the time limit for
the Verification Period above and the Acceptance Procedure set forth in
subsection (c) below.
(c) Acceptance Procedure. If Ventana discovers any Failure, it
shall promptly provide AccuMed with written notice of such Failure, including
all information reasonably available regarding such Failure. Upon receipt of
such notice, AccuMed shall use its best efforts, at AccuMed's sole cost and
expense, to correct any such Failure and to resubmit the corrected applicable
deliverables to Ventana as soon as commercially and technically practicable, but
in all events within 21 days following Ventana's notification of a Failure.
AccuMed shall repeat the process of correction and resubmission of the
applicable deliverable, subject to additional Verification Periods, until
Ventana's acceptance. The parties agree that any failure by Ventana to discover
and notify AccuMed of defects within any Verification Period shall not negate
any of AccuMed's representations or warranties, nor waive any of Ventana's
rights or remedies hereunder.
6.5 Future Development. AccuMed shall develop any improvements to the
Imaging System and Software Products as may be reasonably requested in writing
by Ventana from time to time during the term of this Agreement for Ventana's
continued expansion of its products sales and services and the continuing
introduction of new product features. Such requests may include but not be
limited to modifications to the
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initial Imaging System hardware platform, the development of a totally new,
higher throughput imaging system for larger labs, modifications to existing
software modules, and the development of completely new software modules for use
with existing or future imaging systems. Such development under this Section 6.5
shall be pursuant to specifications developed by Ventana with the cooperation of
AccuMed. Ventana shall pay AccuMed for such development work at an additional
development cost as mutually agreed by the parties.
7. SUPPLY AND MARKETING.
7.1 AccuMed's Supply Obligations. AccuMed shall manufacture and deliver
those quantities of Manufactured Product as specified below, FOB AccuMed's
plant. Manufactured Products delivered by AccuMed shall incorporate the latest
improvements to the Imaging System developed by AccuMed hereunder or otherwise
at no additional cost to Ventana, including but not limited to any such
improvements related to Maintenance. Each Manufactured Product shall include
without limitation all specified hardware and the Basic Imaging and Report
Generating Product.
7.2 Quantity.
7.2.1 AccuMed will manufacture and deliver [***] Manufactured
Products to Ventana with delivery at a rate of [***] Manufactured Products per
calendar quarter commencing with the first full calendar quarter following the
completion of Beta Testing for the Imaging System and all Software Products and
receipt by Ventana of FDA Approval. Delivery of such Manufactured Products may
be accelerated with mutual agreement. Each Manufactured Product will be
delivered with the AccuMed Software and/or Software Products as specified in
Ventana's sole discretion.
7.2.2 If AccuMed fails to ship at least 75% of the amount of any
Manufactured Product for a given calendar quarter as required above, (a "Supply
Deficiency"), Ventana may so notify AccuMed in writing whereby: (i) Technology
Transfer will be accelerated as necessary to permit the immediate manufacture of
Imaging Systems by Ventana, and (ii) AccuMed will promptly prepare a plan as to
how to remedy the situation (which may involve new or expanded production
facilities or a third party producer). AccuMed will use diligent efforts to
implement such plan and shall provide Ventana with quarterly reports on its
progress. If such plan is not substantially implemented within 2 months from
Ventana's notice (and it will not be substantially implemented in significantly
less time than Ventana could begin commercial production thereafter) (an
"Implementation Failure"), then AccuMed will provide Ventana with all technical
assistance reasonably necessary for Ventana to make and have made such
Manufactured Products to meet the portion of Ventana's requirements of that
Manufactured Product that AccuMed cannot supply hereunder, for which such
portion of Manufactured Products shall not be subject to a royalty as
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otherwise provided hereunder. In addition to the foregoing rights, in the event
of a Supply Deficiency, Ventana shall have the right to terminate any further
obligation to purchase Manufactured Products effective immediately upon
providing written notice to AccuMed.
7.3 Ventana's Marketing Obligations. Ventana represents, warrants and
agrees:
7.3.1 to comply with all export laws and restrictions and
regulations of the Department of Commerce or other United States or foreign
agency or authority, and not to export, or allow the export or reexport of any
Proprietary Information of AccuMed or any product thereof in violation of any
such restrictions, laws or regulations.
7.3.2 in addition to and without in any way limiting Ventana's
other obligations hereunder, to use all methods to protect the parties' rights
with respect to the Proprietary Information of AccuMed as it uses to protect its
own or any third party's confidential information or intellectual property
rights.
7.4 Maintenance. AccuMed shall provide maintenance services (including
but not limited to engineering and testing work) for the correction of defects
or errors and the development of improvements for all Manufactured Products and
Royalty Products or any other deliverables sold or provided to Ventana under
this Agreement (the "Maintenance"); provided that Ventana shall be responsible
for the actual installation and retrofitting (the "Installations") of software
upgrades or hardware improvements for any Manufactured Products and Royalty
Products that have been installed for use in a Ventana facility or purchased by
any other third party.
7.4.1. Maintenance shall include but not be limited to prompt
correction of any software errors and any hardware defects in any deliverables
provided to Ventana hereunder and AccuMed shall provide all personnel and bear
any and all expenses, travel or otherwise, as required as part of Maintenance
except for Installations. AccuMed shall commit at least one full-time equivalent
employee for providing Maintenance. Maintenance shall further include the
providing of all updates to any software and all improvements to any hardware
for any deliverables that have been provided to Ventana hereunder.
7.4.2 All software and hardware upgrades and improvements shall
be delivered to Ventana as part of Maintenance at no additional cost to Ventana,
except that Ventana shall pay AccuMed [***]for any hardware parts provided as
part of Maintenance that provide an improvement in performance other than due to
an error or defect correction.
7.4.3 During the term of this Agreement and as payment for the
Maintenance, Ventana shall pay AccuMed a maintenance fee of U.S. [***]with the
first
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Securities and Exchange Commission.
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such installment commencing on the first day of the first month of the first
full calendar quarter following receipt by Ventana of FDA Approval and
completion of Beta Testing for the Imaging System and all Software Products.
Ventana may discontinue Maintenance at any time with written 90-day notice.
7.5 Ventana shall purchase parts from AccuMed's current parts inventory:
(i) as required for the replacement of parts for the Manufactured Products
installed for end-use at any Ventana facility, and (ii) as needed by Ventana for
its manufacture of any Royalty Products; provided that the foregoing obligation
(a) shall only apply for those Manufactured Products or Royalty Products using
the AcCell 2001 hardware platform (and only for such parts that are usable), and
(b) shall not apply to any parts added to AccuMed's inventory after the
Effective Date. AccuMed shall provide a full written inventory list of such
parts and AccuMed's Direct Costs for each part to Ventana within 60 days of the
Effective Date. AccuMed shall internally identify and track such parts in its
inventory, and report such information to Ventana from time to time as
reasonably requested by Ventana, to assist Ventana in determining the extent of
its purchase obligation under this Section 7.5. Any parts purchased by Ventana
under this Section 7.5 shall be at AccuMed's[***]; provided that with respect to
parts purchased for Royalty Products, in no event will Ventana's total costs for
such parts per Royalty Product exceed $15,000. The obligations of this Section
7.5 shall not apply to any sublicensees of Ventana.
8. TECHNOLOGY TRANSFER.
8.1 Transfer of Technology. To carry on the physical transfer of AccuMed
Technical Information from AccuMed to Ventana, AccuMed shall provide to Ventana
as soon as reasonably practicable after the Effective Date all AccuMed
Intellectual Property Rights embodied in tangible form as is reasonably
necessary for Ventana to be ready to begin manufacture and continue development
of the Imaging System and the Software Products (including but not limited to
the Source Code, all related object code and documentation, and any other
related information) beginning on the earlier of: (i) one year after the
Effective Date or (ii) the completion of delivery of [***] Manufactured Products
to Ventana.
8.1.1 AccuMed shall further promptly disclose and transfer to
AccuMed on a monthly basis all Foreground Technology.
8.2 Technical Assistance. During the term of this Agreement, AccuMed
shall provide ongoing technical assistance by qualified AccuMed employees at
Ventana's site as necessary to transfer manufacturing capability for
Manufactured Products to Ventana and to support Ventana's ongoing manufacturing
and development efforts related to the Imaging System. Ventana shall pay
reasonable travel and lodging expenses to AccuMed
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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for such technical assistance; provided such travel is approved in advance in
writing by Ventana.
8.3 Source Code. AccuMed shall deliver the Source Code to Ventana as
soon as reasonably practicable after the Effective Date and shall deliver
updates of the Source Code to Ventana on a quarterly basis thereafter.
9. PAYMENTS.
9.1 Development Funds. Ventana shall pay to AccuMed a total fee of U.S.
[***]for all development of the Imaging System and the delivery of the
Engineering Prototypes (including but not limited to all related software) under
this Agreement payable in installments as follows (the "Development Funds"):
9.1.1 Upon the execution of this Agreement by both parties,
Ventana shall pay [***] to AccuMed.
9.1.2 Upon completion of Alpha Testing and Ventana's acceptance
of the Engineering Prototypes for the Imaging System and the[***], Ventana shall
pay [***] to AccuMed.
9.1.3 Upon completion of Alpha Testing and Ventana's acceptance
of the Engineering Prototypes for the[***], Ventana shall pay [***] to AccuMed.
9.1.4 Upon completion of Beta Testing and acceptance by Ventana
and Ventana's beta site customers of the Engineering Prototypes for the Imaging
System, the[***], Ventana shall pay [***] to AccuMed.
9.1.5 Upon completion of Beta Testing and Ventana's acceptance of
the Engineering Prototype for the[***], Ventana shall pay [***] to AccuMed.
9.1.6 Upon the U.S. FDA issuing to Ventana a letter of
approvability of a Master Validation Protocol that is a 510k equivalent to that
obtained by [***]("FDA Approval"), Ventana shall pay [***] to AccuMed.
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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9.2 Use of Development Funds. AccuMed shall hold and use the Development
Funds solely for the purpose of applying to AccuMed's direct and indirect
development costs under this Agreement until the completion of Beta Testing,
after which the foregoing restriction shall no longer apply.
9.3 Manufacturing Prototype Pricing. In addition to the Development
Funds, Ventana shall pay AccuMed U.S. [***]for each Manufacturing Prototype of
the Imaging System delivered to and accepted by Ventana hereunder. No payment
shall be due for any Manufacturing Prototypes of the Software Products.
9.4 Manufactured Product Pricing. In connection with the supply of
Manufactured Products, Ventana shall pay AccuMed U.S. [***]for each Manufactured
Product of the Imaging System delivered to and accepted by Ventana hereunder.
Except as set forth in Section 9.5 below, no payment shall be due for any
Software Products delivered with a Manufactured Product.
9.5 Royalties. Ventana will pay a royalty to AccuMed on the sale of each
Royalty Product and those software products set forth below by or under the
authority of Ventana; provided that no royalty shall be due for any Manufactured
Product purchased from Ventana or any bona fide sample and clinical trial
products or copies of software.
9.5.1 Royalty Amounts. The royalty shall be U.S. [***]for each
Royalty Product sold.
9.5.2 Software Products. In addition to the payment of a royalty
for each Royalty Product, Ventana shall pay an additional royalty to
AccuMed for each of the following listed software products integrated
into or bundled with either: (i) a Manufactured Product purchased from
AccuMed, or (ii) a Royalty Product manufactured and sold by Ventana;
provided that in no event shall any royalty be due for any such software
product obtained or licensed by Ventana from a third party (including
but not limited to the Telepathology Product). No royalty shall be due
for other Software Products not listed below. The royalty rates for
software products under this Section 9.5.2 shall be as follows:
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PRODUCT ADDITIONAL ROYALTY PER
IMAGING SYSTEM
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[***] [***]
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[***] [***]
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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9.5.3 Payment Report. With each payment of royalties, Ventana
shall provide AccuMed with a report delineating: (a) the number and types of
Royalty Products sold during the applicable period, and (b) the calculation of
the amount due (the "Payment Report").
9.5.4 Payment Terms. Royalties for sales of Royalty Product will
be due within sixty (60) days of the end of each calendar quarter with respect
to sales of Royalty Product recognized or received in such period. Royalties for
software products under Section 9.5.2 above are due at the same time as
royalties for the corresponding Royalty Product in which such software products
have been installed or in the calendar quarter of installation, if installed
later.
9.5.5 Records and Audit Rights. Ventana shall keep complete and
accurate records reflecting all information necessary or useful in verifying the
accuracy of each Payment Report. AccuMed shall have the right to hire an
independent certified public accountant to inspect all such records so required
to be kept by Ventana (which accountant shall agree in writing to keep all
information confidential except as needed to disclose any discovered
discrepancies to AccuMed); provided such audit: (i) is conducted during normal
business hours, (ii) is conducted no more often then once per year (unless a
discrepancy is discovered in favor of AccuMed), and (iii) is conducted only
after AccuMed has given thirty days prior written notice. AccuMed shall bear the
full cost and expense of such audit, unless AccuMed discovers a discrepancy of
more than 1% in which case such cost and expense shall be equally shared.
9.6 Up-Front License Fee Payments. Upon the execution of this Agreement
by both parties and as partial consideration for the license grants hereunder,
Ventana shall pay AccuMed: (i) an up-front non-creditable fee of[***], and (ii)
an additional up-front fee of [***] to be creditable against future royalties
due hereunder by Ventana.
10. LIMITED LIABILITY.
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER
PARTY WILL BE LIABLE TO THE OTHER WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES.
11. TERM AND TERMINATION.
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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11.1 Term. This Agreement will remain in effect for [***] years with
automatic [***]-year renewals unless either party gives written notice 180 days
prior to the end of the then current term not to renew or unless terminated
pursuant to Section 11.2.
11.2 Termination. This Agreement may be terminated in its entirety by a
party for cause immediately upon the occurrence of any of the following events:
(a) If the other ceases to do business, or otherwise terminates
its business operations;
(b) If the other materially breaches any provision of this
Agreement and fails to cure such breach within sixty (60) days of written notice
describing the breach; or
(c) If the other shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other (and not
dismissed within one hundred and twenty (120) days).
11.3 Liability Disclaimer. Neither party shall incur any liability
whatsoever for any damage, loss or expenses of any kind suffered or incurred by
the other (or for any compensation to the other) arising from or incident to any
termination of this Agreement by such party which complies with the terms of the
Agreement whether or not such party is aware of any such damage, loss or
expenses.
11.4 Effect of Termination. For any expiration or termination of this
Agreement, the following provisions shall survive: Sections 2.1, 2.2, 2.3, 2.4,
3, 4, 9.5, 10, 12, 13, and 15 and any other Sections as necessary for Ventana to
fully exploit its licenses under Article 2. Remedies for breaches will also
survive. Each party will promptly return all Proprietary Information of the
other (and all copies and abstracts thereof) that it is not entitled to use
under the surviving terms of this Agreement; provided that Ventana may retain
all Source Code and object code and documentation for the Software Products, all
information transferred by AccuMed as part of Technology Transfer, and any other
information received by Ventana hereunder that Ventana reasonably believes
necessary or desirable for exploitation of its licenses under Article 2.
11.5 Termination Not Sole Remedy. Termination is not the sole remedy
under this Agreement and, whether or not termination is effected, all other
remedies will remain available.
12. WARRANTY AND WARRANTY DISCLAIMERS.
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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12.1 AccuMed hereby represents, warrants, and covenants to Ventana as
follows:
12.1.1 The Engineering Prototypes, the Manufacturing Prototypes,
and the Manufactured Products and the Software Products will conform to the
applicable Functional Specifications, as then in effect, and any published
AccuMed documentation related thereto. Such warranty does not apply to units
that have been mishandled or mistreated.
12.1.2 AccuMed and its Subsidiaries are the sole owner of the
patents and patent applications listed in Exhibit 1-1 and there are no other
patents issued and no other patent applications filed in any country worldwide,
in each case owned or filed by or specifically licensed to AccuMed or any of its
Subsidiaries relating to the Imaging System or the Software Products or methods
of use or the manufacture thereof.
12.1.3 AccuMed has not granted any third party any rights or
interests to any AccuMed Intellectual Property Rights relating to the Imaging
System or the Software Products.
12.1.4 AccuMed is not aware of any actual or potential violation,
infringement or misappropriation of any third party's rights (or any claim or
potential claim thereof) by any of the deliverables to be provided by AccuMed
hereunder (or inherent in the development, use or production thereof).
12.1.5 AccuMed has full power and authority to enter into and
perform this Agreement.
12.1.6 Neither AccuMed's entering nor performing this Agreement
will violate any right of or breach any obligation to any third party under any
agreement or arrangement between AccuMed and such third party.
12.2 EXCEPT FOR THE FOREGOING WARRANTY OF SECTION 12.1.1, ACCUMED DOES
NOT WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY UNITS
DELIVERED TO VENTANA UNDER THIS AGREEMENT.
13. INDEMNITY. AccuMed shall hold Ventana and its officers, directors, agents
and employees harmless from liability resulting from infringement by the Imaging
System, the Software Products, or any other Products using parts, software, or
technical information provided by AccuMed of any patent, copyright, trade
secret, or other intellectual property right, provided AccuMed is promptly
notified of any and all threats, claims and proceedings related thereto and
given reasonable assistance and the opportunity to assume sole control over the
defense and all negotiations for a settlement or compromise; AccuMed will not be
responsible for any settlement it does not approve in writing. The foregoing
obligation of AccuMed does not apply with respect to any parts, software, or
technical information: (i) not supplied by AccuMed, (ii) to the extent
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such infringement arises from Ventana's specifications, (iii) which are modified
by Ventana after shipment by AccuMed, to the extent the alleged infringement
relates to such modification, (iv) combined, processed or used with other
products, processes or materials where the alleged infringement relates to such
combination, process or use, or (v) where the infringement is incident to use of
the Product but does not result primarily from the Product.
14. RIGHT OF NOTIFICATION. AccuMed shall notify Ventana in writing within 3 days
following the date on which any of the following occur: (i) AccuMed receives
from any person or entity a bona fide solicitation, proposal or offer with
respect to the merger or consolidation, purchase of common stock or securities
convertible into common stock of AccuMed exceeding 10% of AccuMed's then
outstanding common stock (on a fully diluted basis), or acquisition of assets
(other than inventory and excluding the license of assets) outside the ordinary
course of business, or similar transaction or business combination involving
AccuMed, or (ii) AccuMed determines (through its board of directors or
otherwise) to solicit, initiate, or participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate or facilitate in any other manner any effort or attempt by any other
person to do or seek any of the transactions described in subsection (i) above.
During the 20 day period beginning on the date of any such notice to Ventana,
AccuMed shall not enter into binding agreement to complete such transaction, and
shall not enter into any no-shop or standstill agreements with any person with
respect to such transaction.
15. GENERAL.
15.1 Amendment and Waiver. Except as otherwise expressly provided
herein, any provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or in any particular
instance and either retroactively or prospectively) only with the written
consent of the parties. However, it is the intention of the parties that this
Agreement be controlling over additional or different terms of any purchase
order, confirmation, invoice or similar document, even if accepted in writing by
both parties, and that waivers and amendments shall be effective only if made by
non-pre-printed agreements clearly understood by both parties to be an amendment
or waiver. The failure of either party to enforce its rights under this
Agreement at any time for any period shall not be construed as a waiver of such
rights.
15.2. Governing Law and Legal Actions. This Agreement shall be governed
by and construed under the laws of the State of Arizona without regard to
conflicts of laws provisions thereof and without regard to the United Nations
Convention on Contracts for the International Sale of Goods. Unless otherwise
elected by Ventana in writing for a particular instance (which Ventana may do at
its option), the sole jurisdiction and venue for actions related to the subject
matter hereof initiated by Ventana shall be the Arizona state and U.S. federal
courts having within their jurisdiction the location of Ventana's place of
business in Arizona. The sole jurisdiction and venue for actions related to the
subject matter hereof initiated by AccuMed shall be the Illinois state and U.S.
federal courts having within their jurisdiction the location of AccuMed's place
of business in
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Illinois. Both parties consent to the jurisdiction of such courts and agree that
process may be served in the manner provided herein for giving of notices or
otherwise as allowed by Arizona or Illinois state, as is applicable, or U.S.
federal law. In any action or proceeding to enforce rights under this Agreement,
the prevailing party shall be entitled to recover costs and attorneys' fees.
15.3 Headings. Headings and captions are for convenience only and are
not to be used in the interpretation of this Agreement.
15.4 Notices. Notices under this Agreement shall be sufficient only if
personally delivered, delivered by a major commercial rapid delivery courier
service or mailed by certified or registered mail, return receipt requested to a
party at its addresses first set forth herein or as amended by notice pursuant
to this subsection, to the attention of the Chief Executive Officer in the case
of AccuMed and to the attention of the Chief Financial Officer in the case of
Ventana. Any notice sent by AccuMed hereunder shall further require sending a
copy of such notice to: Ventana Medical Systems, Inc., 0000 X. Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxx, XX 00000, Attention: Legal Dept. If not received sooner, notice
by mail shall be deemed received 5 days after deposit in the U.S. mails.
15.5 Entire Agreement. This Agreement supersedes all proposals, oral or
written, all negotiations, conversations, or discussions between or among
parties relating to the subject matter of this Agreement and all past dealing or
industry custom.
15.6 Severability. If any provision of this Agreement is held to be
illegal or unenforceable, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
15.7 Basis of Bargain. Each party recognizes and agrees that the
warranty disclaimers and liability and remedy limitations in this Agreement are
material bargained for bases of this Agreement and that they have been taken
into account and reflected in determining the consideration to be given by each
party under this Agreement and in the decision by each party to enter into this
Agreement.
15.8 Relationship of Parties. The parties hereto expressly understand
and agree that the other is an independent contractor in the performance of each
and every part of this Agreement, is solely responsible for all of its employees
and agents and its labor costs and expenses arising in connection therewith.
15.9 Assignment. This Agreement and the rights and obligations hereunder
are not transferable or assignable without the prior written consent of the
parties hereto, except for rights to payment and except to a person or entity
who acquires all or substantially all of the assets or business of a party,
whether by sale, merger or otherwise.
15.10 Publicity and Press Releases. Except to the extent necessary under
applicable laws, the parties agree that no press releases or other publicity
relating to the
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substance of the matters contained herein will be made without joint approval. A
press release announcing this Agreement will be jointly developed and released
by the parties.
15.11 Force Majeure. No liability or loss of rights hereunder shall
result to either party from delay or failure in performance (other than payment)
caused by force majeure, that is, circumstances beyond the reasonable control of
the party affected thereby, including, without limitation, acts of God, fire,
flood, war, government action, compliance with laws or regulations (including,
without limitation, those related to infringement), strikes, lockouts or other
serious labor disputes, or shortage of or inability to obtain material or
equipment.
15.12 Remedies. Except as otherwise expressly stated in this Agreement,
the rights and remedies of a party set forth herein with respect to failure of
the other to comply with the terms of this Agreement (including, without
limitation, rights of full termination of this Agreement) are not exclusive, the
exercise thereof shall not constitute an election of remedies and the aggrieved
party shall in all events be entitled to seek whatever additional remedies may
be available in law or in equity.
15.13 Nonsolicitation. Neither party will encourage or solicit any
employee or consultant to leave the employ of the other; provided that the
foregoing (i) does not prohibit mass media advertising not specifically directed
towards employees or consultants of a party and (ii) will not apply after any
termination or expiration of this Agreement.
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ACCUMED VENTANA
By: /s/ XXXX XXXXXXXX By: /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx
Title: Chairman and CEO Title: Vice Chairman
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