TABLE OF CONTENTS
ARTICLE PAGE
I. DEFINITIONS 1
II. RESEARCH PROGRAM 5
III. GRANTS, CONVERSION AND CANCELLATION 7
IV. SUBLICENSES 8
V. CONSIDERATION FOR WORK AND LICENSE AND RIGHTS 9
VI. ACCOUNTING 14
VII. INTELLECTUAL PROPERTY 15
VIII. CONFIDENTIALITY 21
IX. PATENT INFRINGEMENT 24
X. REPRESENTATIONS AND WARRANTIES 26
XI. INDEMNIFICATION AND INSURANCE 28
XII. MARKING 32
XIII. TERM AND TERMINATION 32
XIV. ASSIGNMENT 34
XV. FORCE MAJEURE 34
XVI. MISCELLANEOUS 34
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RESEARCH AND LICENSE AGREEMENT
THIS AGREEMENT, by and between the Public Health Research Institute of the
City of New York, Inc. (hereinafter referred to as "PHRI"), a not-for-profit
corporation of the state of New York and GENE-TRAK, Inc. (hereinafter referred
to as "GENE-TRAK"), a Delaware corporation,
WITNESSETH THAT:
WHEREAS, PHRI has the exclusive right to license the inventions which are the
subject of and may be claimed in U.S. Patent Applications Serial No. 08/004,993,
Serial No. 08/006,073 and Serial No. 08/005,893, all filed January 15, 1993, and
PHRI has disclosed such patent applications to GENE-TRAK for review and
evaluation for licensing them from PHRI;
WHEREAS, PHRI has certain obligations to the General Hospital Corporation doing
business as Massachusetts General Hospital (hereinafter referred to as "MGH")
regarding PHRI's license of the inventions which are the subject of and may be
claimed in U.S. Patent Application Serial No. 08/005,893, filed January 15,
1993;
WHEREAS, PHRI is willing to grant a license to GENE-TRAK under such patents and
patent applications and GENE-TRAK is willing to accept such a license under the
following terms and conditions;
WHEREAS, GENE-TRAK is willing to engage PHRI to do certain research and PHRI is
willing to do certain research under the following terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants set forth below, GENE-TRAK and PHRI mutually agree as follows:
ARTICLE I. DEFINITIONS
1.1 The terms PHRI, MGH and GENE-TRAK shall have the meanings as stated
above.
1.2 The term Affiliate shall mean any corporation or other entity which
directly or indirectly controls, is controlled by, or is under common
control with GENE-TRAK. Control means ownership or other beneficial
interest in 40% or more of the voting stock or other voting interest
of a corporation or other business activity.
1.3 The term Effective Date shall mean the date this Agreement is fully
executed.
1.4 The term Initial Patents shall mean the following:
(a) U.S. Serial No. 08/004,993 entitled Diagnostic Assays And Kits
For RNA Using RNA Binary Probes And A Protein That Is An
RNA-Directed RNA
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Ligase by Tyagi, filed January 15, 1993 and otherwise designated
as A37 by PHRI; and
(b) U.S. Serial No. 08/006,073 entitled Sensitive Nucleic Acid
Sandwich Hybridization Assays And Kits by Tyagi et al., filed
January 15, 1993 and otherwise designated as A38 by PHRI; and
(c) U.S. Serial No. 08/005,893 entitled Diagnostic Assays And Kits
For RNA Using RNA Binary Probes And A Ribozyme Ligase by Xxxxxxx
et al., filed January 15, 1993 and otherwise designated as A39 by
PHRI; and
(d) all continuation, divisional, reexamination, reissue and foreign
counterpart applications deriving therefrom; and
(e) those claims of all continuation-in-part applications and
continuation, divisional, reexamination, reissue and foreign
counterpart applications of such continuation-in-part
applications which claim the inventions disclosed in the
applications identified in subparagraphs (a) - (c) above; and
(f) all U.S., foreign and reissue patents issued from the
applications identified in subparagraphs 1.4(a) - (d), and the
pertinent claims of patents issuing from the applications of
subparagraph 1.4(e).
1.5 The term Research Program shall mean the research by PHRI which is
described in the work plan entitled, "Amplification Methods Using QB
Replicase" and attached hereto as Appendix I, and subsequent additions
and modifications thereto as mutually agreed to by the parties. To
the extent the work plans are inconsistent with this Agreement, the
provisions of this Agreement shall control.
1.6 The term Research Information shall mean all information, data,
inventions, equipment, instruments, methods and compositions conceived
or developed in the performance of the Research Program.
1.7 The term Research Patents shall mean the claims of all U.S. and
foreign patents and patent applications, including any reissues,
extensions, continuations, divisions and continuations-in-part based
on Research Information. It is understood that a continuation-in-part
application of an Initial Patent disclosing and claiming Research
Information shall also be considered a Research Patent as to the
Research Information claimed therein.
1.8 The term GENE-TRAK Information shall mean all information, data,
inventions, equipment, instruments, methods and compositions developed
by or for GENE-TRAK and provided to PHRI. GENE-TRAK Information shall
include sales and accounting information reported to or made available
to PHRI by GENE-TRAK as required
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herein but shall not include Research Information.
1.9 The term Post-Research Patents shall mean the claims of all U.S. and
foreign patents and patent applications, including any reissues,
extensions, continuations, divisions and continuations-in-part based
on inventions by employees or agents of PHRI utilizing non-public
GENE-TRAK Information and made following termination of the Research
Program but prior to the expiration of three (3) years after
termination of the Research Program.
1.10 (a) The term Royalty-Bearing Product shall mean generally:
(i) all products (except instruments):
(A) within the scope of one or more claims of a pending
patent application or an issued patent within Initial
Patents, Research Patents or Post-Research Patents, or
(B) used or expected to be used to perform a method or
process within the scope of one or more claims of a
pending patent application or an issued patent within
Initial Patents, Research Patents or Post-Research
Patents; and
(ii) a method or process within the scope of one or more claims
of a pending application or an issued patent within Initial
Patents, Research Patents or Post-Research Patents;
provided, however, that such one or more claims have not been
held invalid by a court of last resort and competent
jurisdiction.
(b) The status of a product or the performance of a method or process
as a Royalty-Bearing Product shall be determined regionally as
follows.
(i) In the event that an issued patent or pending application,
if issued, of Initial Patents, Research Patents or
Post-Research Patents has or would have legal effect toward
such product or performance, such issued patent or pending
application shall be used to determine whether such product
or performance is a Royalty-Bearing Product.
(ii) If no issued patent or pending application, if issued, of
Initial Patents Research Patents or Post-Research Patents
has or would have legal effect toward such product or
performance, the status of such product or performance as a
Royalty-Bearing Product shall be determined as follows.
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(A) Such products and the performance of such methods or
processes as are exploited commercially in Central,
South and North America shall be evaluated against the
Initial Patents, Research Patents and Post Research
Patents in the United States.
(B) Such products and performances as are exploited
commercially in Asia other than the countries of the
former Soviet Union shall be evaluated against the
Initial Patents, Research Patents and Post-Research
Patents in Japan.
(C) Such products and performances as are exploited
commercially in Western and Eastern Europe,
Scandinavia, the former Soviet Union, Africa and all
other countries shall be evaluated against the
applications for Initial Patents, Research Patents and
Post-Research Patents filed in the European Patent
Office and issued Initial Patents, Research Patents and
Post-Research Patents in Germany. However, in the
event such claims of a European national patent are
declared invalid by a court of competent jurisdiction
and last resort such products and/or performances shall
not be Royalty-Bearing Products unless subject to
another issued Initial Patent, Research Patent and
Post-Research Patent resulting from those filed in the
European Patent Office.
(c) Notwithstanding the foregoing, Royalty-Bearing Products shall not
include any instrument per se or the repair and parts of an
instrument.
1.11 The term Net Sales shall mean all fees, other payments or
consideration of any kind received or charged by GENE-TRAK or its
sublicensees or its Affiliates for Royalty-Bearing Products, less
credits for returns and customary trade discounts actually taken,
outbound freight, value added, sales or use taxes or custom duties.
Notwithstanding the foregoing, the value of Net Sales for sales to
those having a special course of dealing with GENE-TRAK or its
Affiliates shall be determined on the basis of sales to end users
without a special course of dealing, except in the case of sales of
Royalty-Bearing Products by an Affiliate in which case Net Sales shall
be based upon the greater of (i) the total fee and payment charged to
or received from the Affiliate or (ii) the total fee and payment
charged or received by the Affiliate. It is understood that the term
special course of dealing shall not include conventional distribution
arrangements with unrelated third party distributors and that as
applied to distribution arrangements Net Sales shall mean all fees,
other payments or consideration charged to or received by GENE-TRAK, a
sublicensee or an Affiliate from the unrelated third party
distributor.
1.12 The term First Commercial Sale shall mean the first date upon which
GENE-TRAK,
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a distributor, an Affiliate or sublicensee sells a Royalty-Bearing
Product to an independent third party in an arms-length transaction or
uses a Royalty-Bearing Product in a commercial manner.
ARTICLE II. RESEARCH PROGRAM
2.1 Subject to the terms and conditions set forth in this Agreement, PHRI
agrees to carry out the Research Program and shall provide PHRI owned
and available scientific equipment and laboratory and service
facilities as reasonably required to carry out the Research Program.
2.2 The Research Program shall be performed under the direction of
Dr. F. R. Xxxxxx who will serve as Principal Investigator. Xx. Xxxxxx
will apply approximately 40% of his professional time to the Research
Program.
2.3 In the event Xx. Xxxxxx is unable or unwilling to serve as Principal
Investigator on behalf of PHRI as required by Paragraph 2.2 herein, he
shall be replaced by an individual of at least equivalent capability.
Notwithstanding the foregoing, GENE-TRAK has the right to reject any
replacement proposed by PHRI and GENE-TRAK may terminate the Research
Program effective as of the next six (6) month anniversary of the
Effective Date.
2.4 Unless PHRI's obligation to perform work under this Agreement is
terminated early in accordance with the provisions of Paragraph 2.3 or
Article XIII herein, PHRI will perform work as follows:
(a) Commencing on the Effective Date, PHRI will perform the
procedures as described in Appendix II attached hereto in
GENE-TRAK laboratories using materials and reagents supplied by
PHRI (Appendix II is incorporated herein by reference);
(b) Also commencing on the Effective Date, PHRI will advise GENE-TRAK
as reasonably necessary to permit GENE-TRAK to execute the
procedures described in paragraphs 1-4 of Appendix II in GENE-TRAK
laboratories using materials and reagents supplied by GENE-TRAK;
(c) Upon the successful execution of the procedures described in
Paragraphs 1-4 of Appendix II by PHRI and GENE-TRAK as described
in Paragraphs 2.4(a) and 2.4(b) or upon GENE-TRAK's election in
writing to proceed, but not in any event later than July 15,
1994, GENE-TRAK will elect either to terminate the Agreement or
to have PHRI begin the Research Program for the initial six (6)
months from the Effective Date;
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(d) On or about five (5) months after the Effective Date but not
later than six (6) months after the Effective Date, GENE-TRAK
will elect to terminate the Research Program or to have the
Research Program continued by PHRI, provided that GENE-TRAK makes
the election in writing (such termination of the Research Program
by GENE-TRAK shall be subject to Paragraph 13.3(a));
(e) In the event GENE-TRAK so elects to have the Research Program
continued by PHRI, PHRI will carry out the Research Program
through three full years after the Effective Date;
(f) On or about eleven months after the Effective Date and on or
about that date each year thereafter for as long as PHRI will
conduct research under the Research Program, PHRI will develop a
work plan for the following year's research. The work plan will
be developed in collaboration with GENE-TRAK and be within the
field defined in Appendix I or such other field as the parties
agree in writing. Failure by the parties to agree on any
particular work plan shall not be considered a breach of this
Agreement;
(g) For as long as PHRI is conducting research under the Research
Program, on or about twenty-three months after the Effective
Date and on or about that date of each year thereafter GENE-TRAK
may elect to extend the term of the Research Program for an
additional year. GENE-TRAK's election shall be subject to
approval by PHRI, in writing and not later than the anniversary
of the Effective Date of the relevant calendar year. (In the
event GENE-TRAK and PHRI extend the Research program in this
manner, the period of committed research by and to PHRI will be
two years.)
2.5 During the period of the Research Program set forth in Paragraph 2.4
herein, all significant information and data resulting from the
Research Program shall be reported to GENE-TRAK on a timely basis. In
addition, GENE-TRAK shall be provided with quarterly reports on or
about April 30, July 31, October 31 and January 31 of each calendar
year. Such quarterly reports shall set forth the significant
accomplishments and findings of the Research Program for the preceding
quarter. In addition, the quarterly report submitted on or about
April 30 will serve as an annual report and include the significant
accomplishments and findings for the preceding twelve months.
2.6 During the period of the Research Program, GENE-TRAK will provide at
no cost to PHRI reasonable amounts of such proprietary research
reagents as GENE-TRAK deems necessary for PHRI to carry out the
pending work plan.
2.7 During PHRI's performance of the Research Program, GENE-TRAK at its
option and expense may assign GENE-TRAK representatives to visit PHRI
facilities to observe research under the Research Program. All such
visits shall be conducted during
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mutually convenient and agreed upon times.
2.8 During the course of the Research Program, the Principal Investigator
and other PHRI agents, employees and representatives carrying out the
Research Program shall not undertake any research effort with any
commercial third party which conflicts with the Research Program or
prevents the Principle Investigator from carrying out his
responsibilities under the Research Program. PHRI will consult with
GENE-TRAK in the event of a possible conflict.
ARTICLE III. GRANTS, CONVERSION AND CANCELLATION
3.1 Subject to the terms and conditions of this Agreement, PHRI grants to
GENE-TRAK:
(a) Under Initial Patents and Research Patents, a worldwide exclusive
license, including the right to grant sublicenses, to make, have
made, use and sell or otherwise dispose of Royalty-Bearing
Products including the right to grant immunity from suit under
Initial Patents and Research Patents to authorized third parties
for the use and sale of such Royalty-Bearing Products hereunder;
(b) Under Post-Research Patents, a worldwide exclusive license,
including the right to grant sublicenses, to make, have made, use
and sell or otherwise dispose of Royalty-Bearing Products using
amplification by QB -replicase or a comparable enzyme including
the right to grant immunity from suit under Post-Research Patents
to authorized third parties for the use and sale of such
Royalty-Bearing Products hereunder;
(c) The right and option to convert the exclusive license and right
under one or more of Initial Patents, Research Patents and
Post-Research Patents granted in subparagraphs 3.1(a) and (b)
herein to a nonexclusive license and right under such patent(s).
GENE-TRAK shall be permitted to make such conversion at any time
following four (4) years after the Effective Date upon written
notification to PHRI;
(d) In the event GENE-TRAK converts its exclusive license and right
under Initial Patents to a nonexclusive license and right, and
PHRI grants an additional nonexclusive license and right under
Initial Patents to one or more third parties, GENE-TRAK shall be
permitted at its option to elect to substitute all terms of such
other nonexclusive license and right under Initial Patents for
the terms of its license and right hereunder; and
(e) The right and option to give up its license and right under
Initial Patents while retaining its license and right under
Research Patents and Post-Research Patents. GENE-TRAK shall be
permitted to give up such license and right
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under Initial Patents at any time during the term of this
Agreement. In the event GENE-TRAK gives up its license and
rights under Initial Patents as provided hereunder, GENE-TRAK
shall stand unlicensed under Initial Patents and, notwithstanding
any other license or right GENE-TRAK may have hereunder, PHRI
shall have the right to enforce Initial Patents against GENE-TRAK
under the patent laws of the United States and elsewhere.
3.2 Notwithstanding the foregoing:
(a) all license and rights granted by PHRI herein shall be subject to
rights reserved to itself by the United States Government and
agencies thereof in research grants used to fund research
underlying Initial Patents, Research Patents and Post-Research
Patents;
(b) for as long as GENE-TRAK retains an exclusive license to one or
more of Initial Patents, Research Patents and Post-Research
Patents, PHRI shall be permitted to use the information embodied
in such exclusively licensed Initial Patents, Research Patents or
Post-Research Patents for research, clinical and educational
purposes except that PHRI shall not be permitted to use the
information embodied in such exclusively licensed Initial Patent,
Research Patent or Post-Research Patent in any manner which
inures to the benefit of any other commercial third party; and
(c) for as long as GENE-TRAK retains an exclusive license to U.S.
Serial No. 08/005,893, MGH shall not use the information embodied
in U.S. Serial No. 08/005,893 except for research, clinical and
educational purposes.
ARTICLE IV. SUBLICENSES
4.1 GENE-TRAK shall have the exclusive right to grant sublicenses to
others directly or via a cross-license under such Initial Patents,
Research Patents and Post-Research Patents as GENE-TRAK retains
exclusive license and rights. The granting of such sublicenses shall
be at the discretion of GENE-TRAK and GENE-TRAK shall have the sole
power to determine whether or not to grant any such sublicense, the
identity of any sublicensee and the terms and conditions of such
sublicense including specification of royalty rate; provided however
that each such sublicense includes provisions between GENE-TRAK and
the sublicensee which correspond to Paragraphs 4.3, 4.4, Article VI,
8.10, 10.5(c), 11.4, 11.5, 12.1 and 13.4 herein between PHRI and
GENE-TRAK and paragraphs 11.6 - 11.13 between MGH and GENE-TRAK, and
that no such sublicense shall contain any provision inconsistent with
the provisions of this Agreement.
4.2 Within sixty (60) days after the grant by GENE-TRAK of any sublicense
hereunder,
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GENE-TRAK will provide PHRI with the identity of the sublicensee and a
copy of the sublicense agreement.
4.3 Upon the early termination of this agreement or the loss or
relinquishing by GENE-TRAK of any of its license and rights under
Initial Patents, Research Patents or Post-Research Patents, GENE-TRAK
will terminate the corresponding license and rights of its
sublicensees or assign them to PHRI. In the event GENE-TRAK elects to
assign such license and rights to PHRI, PHRI shall be permitted to
terminate such license and rights at PHRI's sole option.
4.4 Upon conversion by GENE-TRAK pursuant to Paragraph 3.1(c) of the
exclusive license and rights under Initial Patents to nonexclusive
license and rights, GENE-TRAK will terminate the corresponding license
and rights of its sublicensees or assign them to PHRI. In the event
GENE-TRAK elects to assign such license and rights to PHRI, PHRI shall
be permitted to terminate such license and rights at PHRI's sole
option.
4.5 As to any license and rights granted to GENE-TRAK hereunder which have
been sublicensed directly or by cross-license as provided hereunder
and which have not been terminated or assigned to PHRI, GENE-TRAK will
pay and account to PHRI under Articles V and VI as if the sublicensee
were GENE-TRAK under this Agreement.
ARTICLE V. CONSIDERATION FOR WORK AND LICENSE AND RIGHTS
5.1 In consideration of the execution of this Agreement and the other
rights and obligations described herein, GENE-TRAK agrees to pay
PHRI Fifty Thousand U.S. Dollars ($50,000). Such Fifty Thousand
Dollars shall be due and owing as of the Effective Date.
5.2 In consideration of the successful completion by PHRI and GENE-TRAK of
the procedures as described in Paragraphs 2.4(a) and (b) herein and
Paragraphs 1-4 of Appendix II, GENE-TRAK agrees to pay PHRI One
Hundred Thousand U.S. Dollars ($100,000). Such One Hundred Thousand
U.S. Dollars ($100,000) will be due and owing as of the successful
completion of the procedures by GENE-TRAK. Notwithstanding the
foregoing, if GENE-TRAK elects for PHRI to Initiate the Research
Program as provided in Paragraph 2.4(c) herein, then GENE-TRAK agrees
to pay the One Hundred Thousand U.S. Dollars ($100,000) to PHRI.
5.3 Upon election by GENE-TRAK under Paragraph 2.4(c) to have PHRI
initiate the Research Program and in consideration of the work
actually performed by PHRI through six (6) months after the Effective
Date, GENE-TRAK shall pay to PHRI Two Hundred Thousand U.S. Dollars
($200,000). Such Two Hundred Thousand Dollars
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will be due and owing as of the election by GENE-TRAK.
5.4 Upon election by GENE-TRAK for PHRI to continue the Research Program
beyond the first six (6) months after the Effective Date as provided
in Paragraph 2.4(d) herein and for work actually performed by PHRI,
GENE-TRAK will pay to PHRI:
(a) Two Hundred Thousand U.S. Dollars ($200,000) which will be due and
owing as of the election by GENE-TRAK for PHRI to continue the
Research Program;
(b) One Hundred Seventy-Five Thousand U.S. Dollars ($175,000) which
will be due and owing twelve (12) months following the Effective
Date;
(c) One Hundred Seventy-Five Thousand U.S. Dollars ($175,000) which
will be due and owing eighteen (18) months following the Effective
Date;
(d) One Hundred Seventy-Five Thousand U.S. Dollars ($175,000) which
will be due and owing twenty-four (24) months following the
Effective Date; and
(e) One Hundred Seventy-Five Thousand U.S. Dollars which will be due
and owing thirty (30) months following the Effective Date.
5.5 In consideration of the license and other rights and obligations
specified herein, GENE-TRAK agrees to pay PHRI a running royalty as
follows:
(a) 0.875% of Net Sales for the first One Hundred Million U.S. Dollars
($0 - $100,000,000) in Net Sales in any calendar year;
(b) 1.0% of Net Sales for the second One Hundred Million U.S. Dollars
($100,000,000 - $200,000,000) in Net Sales in any calendar year;
(c) 1.5% of Net Sales for the third One Hundred Million U.S. Dollars
($200,000,000 - $300,000,000) in Net Sales in any calendar year;
and
(d) 2.0% of Net Sales for all Net Sales in excess of Three Hundred
Million U.S. Dollars ($300,000,000) in any calendar year.
5.6 Notwithstanding the provisions of Paragraph 5.5 hereof, GENE-TRAK
agrees to pay PHRI the following minimum annual royalties in each year
after the Effective Date:
10
Year Minimum Royalty
---- ---------------
1 - 3 $ 0
4 $150,000
5 $250,000
6 $350,000
7 $450,000
8 $550,000
9 $650,000
10 $750,000
>10 0
Such minimum annual royalties shall be calculated and become due and
owing at the end of each full year following the Effective Date. No
additional minimum annual royalties are due for any year following the
tenth full year after the Effective Date.
5.7 In the event GENE-TRAK exercises either of (a) its right and option
granted in Paragraph 3.1(c) to convert its exclusive license and right
under all Initial Patents to a non-exclusive license and right, or (b)
its right and option granted in Paragraph 3.1(e) to give up its
license and right to Initial Patents, GENE-TRAK shall pay to PHRI a
minimum annual royalty on a pro rata basis for that part of the year
in which GENE-TRAK has retained the exclusive license under any of
Initial Patents. Thereafter, GENE-TRAK shall have no further
obligation to pay minimum annual royalties to PHRI. Notwithstanding
the foregoing, all minimum royalties which have accrued or have been
paid prior to exercise by GENE-TRAK of such right and option are not
refundable.
5.8 (a) In further consideration of the license and other rights granted
to GENE-TRAK by PHRI, GENE-TRAK agrees to pay or have paid each
of the following payments to PHRI upon the occurrence of the
corresponding milestone event:
Milestone Payment
--------- -------
(i) Election by GENE-TRAK under Paragraph 2.4(d) $250,000
to continue the Research Program
(ii) The Earlier of Commencement of Clinical Trials for $200,000
a Royalty-Bearing Product or July 15, 1996
(iii) The Earlier of an Application for FDA Approval $200,000
for a Royalty-Bearing Product or July 15, 1997
(iv) The First Commercial Sale of A Royalty-Bearing $400,000
Product
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(v) The First Commercial Sale of a Royalty-Bearing $500,000
Product within the Scope of One or More Valid
Claims of an Exclusively Licensed Issued U.S.
Initial Patent, Research Patent or Post-Research
Patent
(vi) The First Cumulative Net Sales of $ One Hundred $500,000
Million for Royalty-Bearing Product
(vii) The First $ One Hundred Million in Net Sales of $500,000
Royalty-Bearing Product in a Single Calendar year
(viii) The First $ Two Hundred Fifty Million in Net Sales $500,000
of Royalty-Bearing Product in a Single Calendar
year
The milestone events are separate and independent of one another and
each payment will be incurred notwithstanding that one or more
milestones result from the same event.
(b) Notwithstanding the foregoing, GENE-TRAK will not be required to
make milestone payments in excess of Five Hundred Thousand U.S.
Dollars ($500,000) in any six (6) month period. In the event more
than one milestone payment accrues within any six (6) month
period, GENE-TRAK will be permitted to defer payment of the
balance of milestone payments in excess of Five Hundred Thousand
U.S. Dollars ($500,000) to the next six (6) month period(s) until
such payments are complete.
(c) GENE-TRAK's obligation(s) to make payments for milestone events
will accrue upon the occurrence of the milestone and remain in
effect irrespective of any subsequent elections or actions by
GENE-TRAK. All milestone payments are non-refundable once made
by GENE-TRAK.
5.9 Notwithstanding the foregoing:
(a) As determined regionally pursuant to Paragraph 1.10.
(i) In the event that no claim has issued in an Initial
Patent in the United States, Japan or from the European
Patent Office within seven years of the initial filing
date in the United States, Japan and the European
Patent Office, respectively, for Initial Patents which
(i) covers a Royalty-Bearing Product and (ii) has not
been held invalid by a court of competent jurisdiction
and last resort, any running royalties specified in
Paragraph 5.5 which accrue for Initial Patents shall be
reduced by thirty-seven and one half percent (37.5%)
until such a claim issues
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from Initial Patents at which time the running royalties
shall be fully restored to the rate specified in
Paragraph 5.5.
(ii) In the event that no claim has issued in an Initial
Patent in the United States, Japan or from the European
Patent Office within nine years of the initial filing
date in the United States, Japan and the European
Patent Office, respectively, for Initial Patents which
(i) covers a Royalty-Bearing Product and (ii) has not
been held invalid by a court of competent jurisdiction
and last resort, any running royalties specified in
Paragraph 5.5 which accrue for Initial Patents shall be
reduced to zero percent (0%) until such a claim issues
from Initial Patents at which time the running
royalties shall be fully restored to the rate specified
in Paragraph 5.5.
(iii) As to any particular Research Patent filed in the
United States, Japan or the European Patent Office, in
the event that no claim has issued in the Research
Patent within seven (7) years after the date the
Research Patent is first filed in the United States,
Japan or the European Patent Office, respectively for
such Research Patent which claim (i) covers a
Royalty-Bearing Product and (ii) has not been held
invalid by a court of competent jurisdiction and last
resort, the running royalties specified in Paragraph
5.5 which accrue for the Research Patent shall be
reduced by thirty-seven and one half percent (37.5%)
until such a claim issues from the Research Patent at
which time the running royalties shall be fully
restored to the rate specified in Paragraph 5.5.
(iv) As to any particular Research Patent filed in the
United States, Japan or the European Patent Office, in
the event that no claim has issued in the Research
Patent within nine (9) years after the date the
Research Patent is first filed in the United States,
Japan or the European Patent Office, respectively, for
such Research Patent which claim (i) covers a
Royalty-Bearing Product and (ii) has not been held
invalid by a court of competent jurisdiction and last
resort, the running royalties specified in Paragraph
5.5 for the corresponding Research Patent shall be
reduced to zero percent (0%) until such a claim issues
from the corresponding Research Patent at which time
the running royalties shall be fully restored to the
rate specified in Paragraph 5.5.
(v) It is understood that a product or the performance of a
method or process may be a Royalty-Bearing Product due
to one or more of Initial Patents, Research Patents or
Post-Research Patents and that a single royalty
obligation will accrue whether such product or
performance is a Royalty-Bearing Product under one or
more of Initial Patents, Research
13
Patents or Post-Research Patents. It is further
understood that no corresponding reduction in the
running royalties due under Paragraph 5.5 for any
particular Royalty-Bearing Product shall result under
Subparagraphs (i)-(iv) above for a particular Initial
Patent, Research Patent or Post-Research Patent if such
Royalty-Bearing Product is subject to a higher royalty
under another Initial Patent, Research Patent or
Post-Research Patent.
(b) In the event (i) no claim has issued in an Initial Patent or (ii)
all such claims as have issued have been held invalid by a court
of competent jurisdiction and last resort; the minimum annual
royalties specified in Paragraph 5.6 herein shall be reduced by
thirty-seven and one half percent (37.5%) for years 7-10 as
specified in Paragraph 5.6 until such a claim issues from Initial
Patents in the United States at which time the running royalties
shall be fully restored to the rate specified in Paragraph 5.5.
ARTICLE VI. ACCOUNTING
6.1 Beginning with the earlier of (a) the First Commercial Sale of a
Royalty-Bearing Product or (b) the fourth year following the Effective
Date, GENE-TRAK shall deliver or cause to be delivered to PHRI, within
sixty (60) days after the end of each calendar quarter, a written
report (hereinafter referred to as a "Payment Report") for the
preceding calendar quarter. The Payment Reports shall include the
following:
(a) The Net Sales for each Royalty-Bearing Product and resulting
royalty obligations. The Payment Report shall provide such
information in sufficient detail to permit PHRI a reasonable
understanding of the Net Sales made and royalties due.
(b) Each Payment Report shall also identify in particular the Net
Sales for those Royalty-Bearing Products which:
(i) Are within the scope of one or more claims of U.S.
Serial No. 08/005,893 entitled, "Diagnostic Assays And
Kits For RNA Using RNA Binary Probes And A Ribozyme
Ligase" or foreign counterparts thereof; and
(ii) Are within the scope of one or more claims of U.S.
Serial No. 08/005,893 and any other U.S. Initial
Patent(s), Research Patents and Post-Research Patents
and the identity of such other U.S. Initial Patent(s),
Research Patents and Post-Research Patents.
14
6.2 Concurrently with the submission of each Payment Report, GENE-TRAK's
payment to PHRI of the accrued royalties specified in the Payment
Report shall be due and owing upon receipt by PHRI of the Payment
Report.
6.3 GENE-TRAK will keep or cause to be kept such detailed and accurate
records and books of account as will enable a determination of the
amounts payable hereunder to PHRI. GENE-TRAK further agrees to
permit such records and books of account to be examined once per year
during reasonable business hours for two (2) years following the end
of the particular quarter to which they pertain. Such inspection
shall be limited in purpose to the verification of the Payment Reports
provided PHRI pursuant to Paragraph 6.1 hereof. Such examination
shall be made by an independent auditor appointed by PHRI but
acceptable to GENE-TRAK, whose acceptance shall not be unreasonably
withheld. Such examination shall further be made at the expense of
PHRI unless such examination shows GENE-TRAK's payments have been
deficient by five percent (5%) or more, in which case the examination
will be at the expense of GENE-TRAK.
6.4 All payments made by GENE-TRAK under this Agreement shall be made
within thirty (30) days of coming due, be accompanied by a statement
explaining the reason for the payment and be made in the lawful money
of the United States of America.
6.5 In the event that a running royalty is based upon Net Sales or
sublicensing revenues made in a currency other than the lawful money
of the United States of America, the rate of exchange used in
calculating such royalty for each calendar quarter shall be the
arithmetic average of the selling prices for the currency in question
as quoted by leading banks of New York, New York and reported by the
Wall Street Journal at the end of business on the last business day of
such calendar quarter in which the Royalty-Bearing product was sold.
ARTICLE VII. INTELLECTUAL PROPERTY
7.1 Except as provided herein, GENE-TRAK Information is and shall remain
the exclusive property of GENE-TRAK and nothing shall create any
right, title or interest whatsoever in PHRI to GENE-TRAK Information.
7.2 Except as provided in Paragraph 7.3 herein, as between GENE-TRAK and
PHRI, PHRI shall have sole charge of and be solely responsible for the
prosecution and filing of Initial Patents and the maintenance of such
Letters Patents as issue therefrom. PHRI will bear all costs and
expenses in connection therewith.
7.3 (a) Notwithstanding the provisions of Paragraph 7.2 herein and for as
long as GENE-TRAK retains any license and rights under Initial
Patents, GENE-TRAK will have the right to require that PHRI
prosecute and maintain Initial
15
Patents in the U.S. and elsewhere, provided that GENE-TRAK
requests such from PHRI in writing. GENE-TRAK hereby requires
that PHRI prepare, file, maintain and prosecute applications for
each of Initial Patents in Japan and in the European Patent
Office. PHRI will (i) consult with and advise GENE-TRAK
regarding the preparation, maintenance and prosecution of
applications for Initial Patents including the choice of counsel
to prosecute such applications; (ii) provide GENE-TRAK with
copies of all relevant documentation regarding the prosecution of
such applications; and (iii) use all reasonable efforts to obtain
and maintain issued United States and foreign Letters Patents for
the inventions within Initial Patents as is requested by
GENE-TRAK.
(b) In the event GENE-TRAK elects to have the Research Program
continued as provided in Paragraph 2.4(d) herein, GENE-TRAK will
bear all reasonable costs and expenses in the preparation,
filing, maintenance and prosecution of such applications and
maintenance of such Initial Patents as GENE-TRAK requires PHRI to
prosecute and maintain. GENE-TRAK will reimburse PHRI for
out-of-pocket costs and expenses reasonably incurred by PHRI with
respect to (i) the preparation, filing, maintenance and
prosecution of Initial Patents prior to the Effective Date and
(ii) prosecution and maintenance of such applications thereafter
and maintenance of such patents as issue therefrom. GENE-TRAK
will be permitted to withdraw its request to have one or more
Initial Patents prosecuted and maintained in the United States,
Japan and the European Patent Office or European nations, as the
case may be, after three (3) years after the Effective Date. In
the event GENE-TRAK withdraws its request to have an application
for an Initial Patent prosecuted and maintained or patent
maintained in any country, GENE-TRAK shall have no obligation to
bear all further costs and expenses in connection therewith,
provided that GENE-TRAK withdraws its request in writing. It is
understood that PHRI may continue to have such application
prepared, maintained and prosecuted or such patent maintained at
its own expense and that GENE-TRAK shall stand unlicensed
thereunder.
(c) In the event GENE-TRAK elects to exercise its option under
Paragraph 3.1(c) to convert its exclusive license and rights
under Initial Patents to a non-exclusive license and right,
GENE-TRAK's obligation to reimburse PHRI for subsequent costs and
expenses for prosecution and maintenance of Initial Patents will
be reduced to fifty percent (50%) of those costs and expenses
reasonably incurred by PHRI. Further, in the event PHRI issues
additional licenses to Initial Patents, GENE-TRAK's obligation to
reimburse PHRI shall be further reduced such that the subsequent
costs and expenses shall be shared equally by GENE-TRAK, and the
licensees.
7.4 All inventions made by employees or agents of PHRI in the course of
the Research
16
Program shall be promptly and fully made known to GENE-TRAK.
7.5 As between GENE-TRAK and PHRI, all inventions made only by employees
or agents of PHRI in the course of the Research Program shall be the
property of PHRI and PHRI shall have the right to obtain and hold in
its own name United States and foreign Letters Patents (Research
Patents) relating thereto. Except as provided in Paragraph 7.6
herein, PHRI will have sole charge of and be solely responsible for
the preparation and filing of all applications for such Research
Patents and will bear all costs and expenses in connection therewith.
7.6 (a) Notwithstanding the provisions of Paragraph 7.5 herein, GENE-TRAK
will have the right to require that PHRI prepare, file, maintain
and prosecute applications for United States and foreign Research
Patents for any such invention resulting from the Research
Program and maintain such Research Patents as may issue
therefrom, provided that GENE-TRAK requests such from PHRI in
writing within ninety (90) days of PHRI's initial disclosure of
such invention to GENE-TRAK. PHRI will (i) consult with and
advise GENE-TRAK regarding the preparation, maintenance and
prosecution of such applications and the maintenance of such
Research Patents including the choice of counsel to prepare and
prosecute such applications for Research Patents; (ii) provide
GENE-TRAK with copies of all relevant documentation regarding the
prosecution of such applications; and (iii) use all reasonable
efforts to obtain and maintain issued United States and foreign
Research Patents for such subject matter as is requested by
GENE-TRAK.
(b) It is further understood that GENE-TRAK will bear all reasonable
costs and expenses in the preparation, filing, maintaining and
prosecution of such applications and maintenance of such Research
Patents. GENE-TRAK will reimburse PHRI for out-of-pocket costs
and expenses reasonably incurred by PHRI with respect to the
preparation, filing, maintenance or prosecution of such
applications and maintenance of such Research Patents. In the
event PHRI has already incurred costs and expenses in connection
with the preparation, filing, maintenance and prosecution of an
application for a Research Patent before GENE-TRAK has required
PHRI to obtain such, GENE-TRAK will reimburse PHRI for such costs
and expenses as were reasonably incurred for such applications as
GENE-TRAK thereafter requires PHRI to prepare, file, maintain and
prosecute. If, however, GENE-TRAK withdraws its request to have
such an application prepared, maintained or prosecuted or
Research Patent maintained, GENE-TRAK shall have no obligation to
bear all further costs and expenses in connection therewith,
provided that GENE-TRAK withdraws its request in writing. It is
understood that PHRI may continue to have such application
prepared and prosecuted or such Research Patent maintained at its
own expense and that GENE-TRAK
17
shall stand unlicensed thereunder.
7.7 The parties contemplate that GENE-TRAK employees and agents will
collaborate with PHRI employees and agents during the Research Program
and that inventions may be made jointly by employees or agents of both
GENE-TRAK and PHRI. In the event that an invention is made jointly by
an employee or agent from each party:
(a) Each party shall promptly and fully insure that the invention is
made known to the other party;
(b) Such inventions shall be owned by PHRI, but subject to Paragraph
7.15 herein; and
(c) PHRI shall be permitted to elect to seek U.S. and foreign patents
for such inventions and GENE-TRAK shall be permitted to require
that PHRI seek U.S. and foreign patents for such inventions.
It is understood that such joint inventions are not intended to
include inventions which are made only by agents and employees of
GENE-TRAK and GENE-TRAK will be the sole owner of inventions made
solely by GENE-TRAK's agents and employees.
7.8 In the event PHRI elects to seek U.S. and foreign patents or GENE-TRAK
requires PHRI to seek U.S. and foreign patents for inventions made
jointly by employees or agents of both parties, such patents and
patent applications shall be Research Patents as described herein and
the preparation, filing and maintenance of such patents and patent
applications shall be subject to Paragraphs 7.5 and 7.6 hereof. In
addition, GENE-TRAK will execute such papers as are reasonably
necessary to evidence PHRI's ownership in the inventions.
7.9 For three full years following completion of the Research Program,
PHRI shall promptly and fully make known to GENE-TRAK any inventions
made by employees or agents of PHRI which utilize non-public GENE-TRAK
Information.
7.10 As between GENE-TRAK and PHRI, all inventions made by employees or
agents of PHRI in the first three years following completion of the
Research Program and utilizing non-public GENE-TRAK Information shall
be the property of PHRI and PHRI shall have the right to obtain and
hold in its own name United States and foreign Letters Patents
(Post-Research Patents) relating thereto. Except as provided in
Paragraph 7.11 herein, PHRI will have sole charge of and be solely
responsible for the preparation, filing, maintenance and prosecution
of all applications for such Post-Research Patents and will bear all
costs and expenses in connection therewith.
7.11 (a) Notwithstanding the provisions of Paragraph 7.10 herein,
GENE-TRAK will have the right to require that PHRI prepare, file
and prosecute applications for
18
United States and foreign Post-Research Patents for any such
invention made by employees or agents of PHRI in the first three
years following completion of the Research Program and utilizing
non-public GENE-TRAK Information and maintain such Post-Research
Patents as may issue therefrom, provided that GENE-TRAK requests
such from PHRI in writing within ninety (90) days of PHRI's
initial disclosure of such invention to GENE-TRAK. PHRI will (i)
consult with and advise GENE-TRAK regarding the preparation,
filing, maintenance and prosecution of such applications and the
maintenance of such patents including the choice of counsel to
prepare and prosecute such applications for Post-Research
Patents; (ii) provide GENE-TRAK with copies of all relevant
documentation regarding the prosection of such applications; and
(iii) use all reasonable efforts to obtain and maintain issued
United States and foreign Post-Research Patents for such subject
matter as is requested by GENE-TRAK.
(b) It is further understood that GENE-TRAK will bear all reasonable
costs and expenses in the preparation, filing, maintaining and
prosecution of such applications and maintenance of such
Post-Research Patents. GENE-TRAK will reimburse PHRI for
out-of-pocket costs and expenses reasonably incurred by PHRI with
respect to the preparation or prosecution of such applications
and maintenance of such patents. In the event PHRI has already
incurred costs and expenses in connection with the preparation,
filing and prosecution of an application for a Post-Research
Patent before GENE-TRAK has required PHRI to obtain such,
GENE-TRAK will reimburse PHRI for such costs and expenses as were
reasonably incurred for such applications as GENE-TRAK thereafter
requires PHRI to prepare and prosecute. If, however, GENE-TRAK
withdraws its request to have such an application prepared or
prosecuted or patent maintained, GENE-TRAK shall have no
obligation to bear all further costs and expenses in connection
therewith, provided that GENE-TRAK withdraws its request in
writing. It is understood that PHRI may continue to have such
application prepared, maintained and prosecuted or such patent
maintained at its own expense and that GENE-TRAK shall stand
unlicensed thereunder.
7.12 All literary, artistic, computational or other material (including
reports, computer programs, manuals, disks, listings and other
programming documentation) created or composed by employees or agents
of PHRI in connection with the Research Program shall be promptly and
fully made known to GENE-TRAK.
7.13 All literary, artistic, computational or other material (including
reports, computer programs, manuals, disks, listings and other
programming documentation) created or composed by employees or agents
of PHRI in connection with the Research Program shall be the property
of PHRI and PHRI shall have the right to obtain and hold in its own
name copyrights, trademarks, registrations or such other protection as
may be
19
appropriate. Except as provided in Paragraph 7.14 herein, PHRI will
have sole charge and be solely responsible for the preparation and
filing of all applications for such copyrights, trademarks,
registrations or other protection and will bear all costs and expenses
in connection therewith.
7.14 (a) Notwithstanding the provisions of Paragraph 7.13 herein,
GENE-TRAK shall have the right to require that PHRI obtain and
hold copyrights, trademarks, registrations or such other
protection as may be appropriate for all literary, artistic,
computational or other material (including reports, computer
programs, manuals, disks, listings and other reprogramming
documentation) created or composed by employees or agents of PHRI
in connection with PHRI's services hereunder, provided that
GENE-TRAK requests such from PHRI within ninety (90) days of
PHRI's initial disclosure of such literary, artistic,
computational or other material to GENE-TRAK. PHRI will (i)
consult with GENE-TRAK regarding the preparation and prosecution
of applications for such copyrights, trademarks, registrations or
other appropriate protection including the choice of counsel to
prepare and prosecute such applications; (ii) provide GENE-TRAK
with copies of all relevant documentation regarding the
prosection of such applications; and (iii) use all reasonable
efforts to obtain copyrights, trademarks, registrations or other
appropriate protection for such subject matter as requested by
GENE-TRAK.
(b) It is further understood that GENE-TRAK will bear all costs and
expenses in connection with the preparation and prosecution of
all such applications. In the event that PHRI has already
incurred costs and expenses in connection with the preparation
and prosecution of an application for copyright, trademark,
registration or other protection before GENE-TRAK has required
PHRI to obtain such, GENE-TRAK will reimburse PHRI for such costs
and expenses as were reasonably incurred by PHRI. If GENE-TRAK
withdraws its request to have such an application prepared or
prosecuted, GENE-TRAK shall have no obligation to bear all
further costs and expenses in connection therewith, provided that
GENE-TRAK withdraws its request in writing. It is understood
that PHRI may continue to have such application prepared and
prosecuted at its own expense.
7.15 Subject to the terms of this Agreement and PHRI's rights under the
patent laws of the United States and elsewhere, following termination
of the Research Program or this Agreement, there will be no
restriction to GENE-TRAK's right to use, disclose or otherwise deal
with any tangible form of information, data or inventions which may
result from the Research Program.
7.16 In the event GENE-TRAK elects to have the Research Program continued
as provided in Paragraph 2.4(d), PHRI will submit to GENE-TRAK an
invoice for patent expenses reimbursable by GENE-TRAK hereunder.
Thereafter, PHRI will submit
20
invoices to GENE-TRAK for reimbursable patent expenses approximately
quarterly. Payment by GENE-TRAK of such invoices shall be due and
owing upon receipt by GENE-TRAK of such invoices.
7.17 Notwithstanding the provisions of Paragraphs 7.3, 7.6 and 7.11, fifty
percent (50%) of all costs and expenses paid by GENE-TRAK for the
preparation, filing, prosecution and maintenance of Initial Patents,
Research Patents and Post-Research Patents shall accumulate and,
beginning in year four (4) after the Effective Date, be fully
creditable against royalties payable by GENE-TRAK in excess of the
minimum annual royalties payable by GENE-TRAK in each year pursuant to
Paragraph 5.6 herein.
ARTICLE VIII. CONFIDENTIALITY
8.1 All GENE-TRAK Information shall be treated as confidential by PHRI.
PHRI will not use GENE-TRAK Information except as and to the extent
necessary for the purposes of this Agreement. PHRI will limit access
to GENE-TRAK Information only to those:
(a) PHRI employees and agents who reasonably require such access for
the purposes of the Research Program or for determining
compliance with the Agreement, and who are obligated to treat
GENE-TRAK Information as confidential in the same manner and to
the same extent as provided herein; and
(b) Authorized MGH agents and employees who reasonably require such
access to permit MGH to determine its rights to royalties as
between PHRI and MGH, provided that such employees and agents of
MGH are obligated to treat GENE-TRAK Information as confidential
and not use GENE-TRAK information except for the purposes stated
in this Paragraph 8.1(b). Upon request by GENE-TRAK, MGH will
provide GENE-TRAK with written assurances that such authorized
employees and agents of MGH are obligated to treat GENE-TRAK
Information in such a confidential manner.
8.2 Notwithstanding the provisions of paragraphs 8.1 herein, PHRI, MGH and
their respective agents and employees shall have no obligation with
regard to GENE-TRAK Information that:
(a) can be demonstrated to have been in the public domain or publicly
known or available prior to the date of disclosure to PHRI or
MGH; or
(b) can be demonstrated to have been in PHRI's or MGH's possession or
made available to PHRI or MGH from another source prior to the
disclosure; or
21
(c) becomes part of the public domain or publicly known or available
not due to any unauthorized act or omission on the part of PHRI
or MGH; or
(d) can be demonstrated to be derived independently of GENE-TRAK
Information by PHRI or MGH or their Affiliates; or
(e) is rightfully received by PHRI or MGH from a third party.
8.3 PHRI will return to GENE-TRAK all papers, drawings, tapes, disks and
other tangible forms containing GENE-TRAK Information in its
possession upon completion or early termination of the Research
Program unless otherwise directed by GENE-TRAK in writing.
8.4 PHRI may publish or otherwise disclose Research Information to the
public or to any third party except that prior to such publication or
disclosure, PHRI shall notify GENE-TRAK of its intent to publish or
disclose and submit such Research Information to GENE-TRAK for
GENE-TRAK's review prior to such publication or disclosure.
GENE-TRAK will notify PHRI within thirty (30) days of receipt of such
Research Information of GENE-TRAK's objections, suggestions or
modifications to the publication or disclosure. GENE-TRAK may require
deletion of information that is or reveals GENE-TRAK Information but
PHRI shall make the final determination as to such other Research
Information to be included in the publication or disclosure.
GENE-TRAK may also request an additional delay up to a maximum of
sixty (60) days from GENE-TRAK's initial receipt in order to reach
agreement on suggested changes. PHRI agrees to withhold such
publication or disclosure for up to six (6) months from GENE-TRAK's
initial receipt in order to permit GENE-TRAK to investigate the
patentability of and, if GENE-TRAK so requests, to permit PHRI to
prepare and file application(s) for United States and foreign Letters
Patents for such Research Information, provided that GENE-TRAK
requests such withholding from PHRI in writing within sixty (60) days
of GENE-TRAK's initial receipt of the Research Information to be
published or disclosed.
8.5 All Research Information shall be treated as confidential by GENE-TRAK
during the course of the Research Program and during such time
GENE-TRAK will not use Research Information except as and to the
extent necessary for the purposes of this Agreement. GENE-TRAK will
limit access to Research Information only to those of its employees
and agents who reasonably require such access for the purposes of this
Agreement and who are obligated to treat Research Information as
confidential in the same manner and to the same extent as provided
herein.
8.6 Notwithstanding the provisions of Paragraph 8.5 herein, GENE-TRAK may
publish or otherwise disclose Research Information to the public or to
any third party during the course of the Research Program except that
Prior to such publication or disclosure,
22
GENE-TRAK shall notify PHRI of its intent to publish or disclose and
submit such Research Information to PHRI for PHRI's review prior to
such publication or disclosure. PHRI will notify GENE-TRAK within
thirty (30) days of receipt of such Research Information of PHRI's
objections, suggestions or modifications to the publication or
disclosure but GENE-TRAK shall make the final determination as to such
Research Information to be included in the publication or disclosure.
PHRI may request an additional delay up to a maximum of sixty (60)
days from PHRI's initial receipt in order to reach agreement on
suggested changes. GENE-TRAK agrees to withhold such publication or
disclosure for up to (6) months from PHRI's initial receipt in order
to permit PHRI to investigate the patentability of and, if PHRI so
chooses to prepare and file application(s) for United States and
foreign Letters Patents for such Research Information provided that
PHRI requests such withholding from GENE-TRAK in writing within sixty
(60) days of PHRI's initial receipt of the Research Information to be
published or disclosed.
8.7 Notwithstanding the provisions of paragraphs 8.5 and 8.6 herein,
GENE-TRAK shall have no obligation with regard to Research Information
that:
(a) can be demonstrated to have been in the public domain or publicly
known or available prior to the date of disclosure; or
(b) can be demonstrated to have been in GENE-TRAK's possession or
available to GENE-TRAK from another source prior to the
disclosure; or
(c) becomes part of the public domain or publicly known or available
not due to any unauthorized act or omission on the part of
GENE-TRAK or its Affiliates; or
(d) can be demonstrated to be derived independently of Research
Information by GENE-TRAK or its Affiliates; or
(e) is rightfully received by GENE-TRAK from a third party.
8.8 PHRI may reference this Agreement and list GENE-TRAK as a source of
funding in its standard project award publications with the revised
title "Studies of Assay Methodologies" provided that no GENE-TRAK
Information of a confidential nature is made available as a result of
such notice.
8.9 Except as may be required to meet professional standards for
publication, upon timely request by GENE-TRAK, PHRI authors will to
the extent possible delete mention of GENE-TRAK's involvement in the
Research Program.
8.10 (a) GENE-TRAK will not use PHRI's name or the name of any member of
PHRI's project staff in any publicity, advertising or news
release without the prior written approval of PHRI.
23
(b) PHRI will not use GENE-TRAK's name or the name of any GENE-TRAK
employee in any publicity, advertising or news release without
the prior written approval of GENE-TRAK.
8.11 (a) GENE-TRAK will not use MGH's name or the name of any MGH inventor
named to U.S. Serial No. 08/005,893, or the name of any member of
MGH's professional staff in any publicity, advertising or news
release without the prior written approval of MGH.
(b) MGH will not use GENE- TRAK's name or the name of any GENE-TRAK
employee in any publicity, advertising or news release without
the prior written approval of GENE-TRAK.
ARTICLE IX. PATENT INFRINGEMENT
9.1 As between GENE-TRAK and PHRI, PHRI shall have the first right to
assert or defend Initial Patents, Research Patents and Post-Research
Patents against any third party PHRI perceives to be a challenger or
infringer of Initial Patents, Research Patents and Post-Research
Patents. In the event PHRI chooses of its own to assert one or more
of Initial Patents, Research Patents and Post-Research Patents, PHRI
shall do so at its own expense, have sole control over the prosecution
of any resulting patent litigation and related settlement discussions
and be the sole beneficiary of any settlement or judicial awards
resulting from its assertion of such Initial Patents, Research Patents
or Post-Research Patents. Notwithstanding the foregoing, in the event
GENE-TRAK retains an exclusive license and right under such Initial
Patents, Research Patents or Post-Research Patents as PHRI intends to
assert against a perceived infringer of same, PHRI will discuss its
intentions with GENE-TRAK before asserting such patents against the
perceived infringer.
9.2 Notwithstanding the provisions of Paragraph 9.1 herein and to the
extent that GENE-TRAK retains exclusive license and rights under one
or more of Initial Patents, Research Patents or Post-Research Patents:
(a) If (i) a third party seeks to invalidate one or more of such
exclusively licensed Initial Patents, Research Patents or
Post-Research Patents or (ii) GENE-TRAK provides to PHRI
reasonable evidence of commercial infringement of one or more of
such exclusively licensed Initial Patents, Research Patents or
Post-Research Patents by one or more unauthorized third parties,
and requests in writing that PHRI cause such allegedly infringing
activity to cease; then PHRI shall promptly advise GENE-TRAK of
PHRI's decision to take reasonable action to defend such patents
or stop such activity, or not to do so. If PHRI elects to defend
such patent or take action to cause such activity to cease, PHRI
shall do so pursuant to the terms of Paragraph 9.1 herein.
24
(b) (i) If, however:
(A) PHRI expressly declines to defend such patent or
take action to cause such allegedly infringing
activity to cease; or
(B) within one hundred eighty (180) days of a request
by GENE-TRAK to cause such allegedly infringing
activity to stop PHRI has not caused such activity
to stop or initiated patent infringement
litigation against at least one of said allegedly
infringing third parties;
(ii) then GENE-TRAK shall be permitted to:
(A) deduct from royalties due hereunder thirty percent
(30%) of its reasonable costs and legal fees
incurred to conduct such proceedings as are
undertaken by GENE-TRAK pursuant to subparagraph C
hereunder, but in no event shall royalty payments
be reduced by more than thirty percent (30%) of
the amount otherwise due in any royalty payment
period;
(B) postpone payment of thirty percent (30%) of any
such milestone payments as come due until such
alleged infringing activity has ceased or been
declared noninfringing by a court of competent
jurisdiction and last resort; and
(C) defend such patent or initiate and prosecute at
GENE-TRAK's expense patent infringement litigation
against one or more of such allegedly infringing
third parties as GENE-TRAK chooses. PHRI will
join such litigation to the extent required to
permit GENE-TRAK to continue such litigation.
GENE-TRAK will be permitted to seek any remedy
permitted by law and control such litigation
including the settlement thereof and the selection
of counsel therefore. Any settlement award or
other recovery from such litigation shall be used
first to reimburse GENE-TRAK for reasonable
remaining costs and legal fees incurred to conduct
such litigation; next be used to pay any amounts
withheld from PHRI during the pendency of the
litigation; next be used to pay PHRI an effective
royalty as though the infringing party were a
sublicensee and the infringing products were
Royalty-Bearing Products provided, however, that
such effective royalty is not to exceed
twenty-five percent (25%) of the settlement award
or other recovery remaining after the payments
named above; and the remainder to GENE-TRAK.
25
(c) As between GENE-TRAK and PHRI, as to any country in which
GENE-TRAK or one or more of its sublicensees reasonably
determines that it cannot make, use or sell inventions disclosed
and claimed in Initial Patents, Research Patents or Post-Research
Patents without infringing one or more issued patents held
adversely to GENE-TRAK and not licensed by GENE-TRAK as of the
Effective Date, GENE-TRAK shall be permitted to acquire license
and rights under such adversely held patents and deduct expenses
incurred per calendar year for such license and rights from
royalties due hereunder up to a maximum thirty percent 30% of the
running royalties due to PHRI for activities in that country
provided, however, that such running royalties shall not be
reduced below a minimum of 0.75% of the Net Sales in that
country.
9.3 As to issued Initial Patents, Research Patents or Post-Research
Patents under which GENE-TRAK holds a nonexclusive license and right,
in the event that GENE-TRAK: provides to PHRI reasonable evidence of
commercial infringement of one or more of such Initial Patents,
Research Patents or Post-Research Patents by one or more unauthorized
third parties and that such infringement places GENE-TRAK at a
competitive disadvantage with respect to one or more of such
unauthorized third parties; GENE-TRAK shall be permitted to postpone
payment of any running royalty due to PHRI for sales of
Royalty-Bearing Product in the country where such infringing activity
occurs until PHRI commences action to cause such infringement to
cease.
9.4 In the event either of GENE-TRAK or PHRI shall initiate and prosecute
patent litigation against a non-party, the other shall provide
reasonable cooperation with the party prosecuting the patent
litigation. Such cooperation shall include making relevant records,
papers, information, samples and the like reasonably available and
providing relevant employees for testimony on an appropriate basis.
The party seeking cooperation will reimburse the party providing
cooperation for all out-of-pocket expenses incurred by the party
providing cooperation.
ARTICLE X. REPRESENTATIONS AND WARRANTIES
10.1 PHRI represents and warrants that it has full legal power to extend
the rights granted to GENE-TRAK herein. Except as provided in
Paragraph 10.2 herein, PHRI is aware of no outstanding assignments,
grants, licenses, encumbrances, obligations or agreements, written or
oral, with respect to Initial Patents or that are inconsistent with
PHRI's obligations hereunder.
10.2 PHRI represents and warrants that PHRI and MGH have entered into an
Agreement effective December 10, 1993, a copy of which is attached
hereto as Appendix III and incorporated herein by reference, which
Agreement concerns the Initial Patent U.S. Patent Application Serial
No. 08/005,893 entitled Diagnostic Assays And Kits For
26
RNA Using RNA Binary Probes And A Ribozyme Ligase by Xxxxxxx et al.
and certain other pending patent applications relating to the use
of ribozymes (the latter are herein after collectively referred to as
the Ribozyme Applications). PHRI represents and warrants that upon
GENE-TRAK's reasonable showing to PHRI and MGH that one or more of the
MGH Ribozyme Applications significantly impairs the development or use
of the inventions which are the subject of Serial No. 08/005,893, MGH
will, at PHRI's request, use reasonable efforts to obtain for
GENE-TRAK a non-exclusive license or sublicense to such one or more
MGH Ribozyme Applications. PHRI further represents and warrants that
it will make such request of MGH upon GENE-TRAK's request for same and
GENE-TRAK's reasonable showing to PHRI and MGH.
10.3 As of the Effective Date, PHRI represents and warrants that it does
not own or have conveyable rights to pending patent applications or
issued patents directed to inventions which would preclude GENE-TRAK
from commercially utilizing the inventions which are the subject of
Initial Patents.
10.4 PHRI represents and warrants that:
(a) it is not aware of any inequitable or fraudulent conduct by its
employees, agents or the inventors of any Initial Patent which
would render any Initial Patent invalid or unenforceable; and
(b) prior to January 15, 1994, PHRI has prepared and filed a foreign
patent application under the Patent Cooperation Treaty for each
of Initial Patents designating Japan and the European Patent
Office and including at least, France, Germany, Italy, and the
United Kingdom.
10.5 Notwithstanding the foregoing, nothing contained in this Agreement
shall be construed as:
(a) a representation or warranty by PHRI that any invention described
in Initial Patents is patentable or that any patent issuing
therefrom will be valid;
(b) a representation or warranty by PHRI that anything made, used,
sold, or otherwise disposed of under any license granted in this
Agreement is or will be free from infringement of any patents
held by third parties;
(c) A REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, BY PHRI OR MGH
OF THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF
ANYTHING MADE, USED, SOLD OR OTHERWISE DISPOSED OF UNDER THIS
AGREEMENT;
(d) an obligation by either party to initiate or prosecute actions or
suits against any
27
third party for infringement of any patent licensed hereunder; or
(e) granting by implication, estoppel or otherwise any license or
rights under anything other than Initial Patents, Research
Patents and Post-Research Patents.
10.6 PHRI represents and warrants that all of its employees and agents
assigned to work on the Research Program will have entered into an
agreement with PHRI which is sufficient to enable PHRI to comply with
all terms of this Agreement.
10.7 GENE-TRAK represents and warrants that it is an Affiliate of Amoco
Corporation, an Indiana Corporation.
ARTICLE XI. INDEMNIFICATION AND INSURANCE
11.1 PHRI and GENE-TRAK are acting as independent contractors under this
Agreement and nothing contained herein shall make PHRI the agent,
partner, representative or employee of GENE-TRAK.
11.2 PHRI shall at all times exercise such precautions as may be reasonably
necessary for the safety of its employees and agents in carrying out
the Research Program.
11.3 PHRI accepts full responsibility for any injury to or death of any
person or persons and any loss of or damage to the property of any
person or persons caused by or arising out of PHRI's negligence during
PHRI's performance of the Research Program.
11.4 Absent gross negligence or willful misconduct by PHRI, GENE-TRAK shall
at all times during the term of this Agreement and thereafter,
indemnify, defend and hold PHRI, its trustees, officers, directors and
employees harmless against all claims and expenses, including legal
expenses and reasonable attorney's fees, arising out of the death of
or injury to any person or persons, any damage to property or against
any other claim, proceeding, demand and liability resulting from the
production, manufacture, sale, use, lease or consumption of any
Royalty-Bearing Product or arising from the rights and license granted
herein to GENE-TRAK by PHRI provided, however, that PHRI shall (a)
notify GENE-TRAK promptly in writing after it receives notice of any
claim subject to this Paragraph 11.4, (b) permit GENE-TRAK, at its
option, to participate in and control the defense and trial of such
claim and related settlement negotiations; and (c) fully cooperate
with GENE-TRAK in the defense of any such claim. GENE-TRAK will keep
PHRI reasonably informed as to any defense undertaken by GENE-TRAK
hereunder.
11.5 (a) For as long as GENE-TRAK is an Affiliate of Amoco Corporation,
GENE-
28
TRAK shall be permitted to stand self-insured.
(b) In the event GENE-TRAK is no longer an Affiliate of Amoco
Corporation, PHRI shall be permitted to determine whether
GENE-TRAK shall obtain and maintain primary coverage
comprehensive general liability insurance and, upon the First
Commercial Sale, products liability insurance. In the event PHRI
so determines and notifies GENE-TRAK in writing, GENE-TRAK shall
obtain such insurance for minimum limits of Two Million U.S.
Dollars ($2,000,000) combined single limit for bodily injury and
property damage per occurrence and Ten Million U.S. Dollars
($10,000,000) in the aggregate. Such insurance shall include as
insureds PHRI, its officers, directors and employees; and The
General Hospital Corporation, its officers, directors and
employees.
11.6 The term "MGH Product" shall mean those Royalty Bearing Products which
are subject to those claims of Initial Patents which claim the
inventions which are the object of U.S. Serial No. 08/005,893 entitled
Diagnostic Assays And Kits For RNA Using RNA Binary Probes And A
Ribozyme Ligase by Xxxxxxx et al.
11.7 (a) GENE-TRAK shall indemnify, defend and hold harmless MGH and its
trustees, officers, medical and professional staff, employees and
agents, and their respective successors, heirs and assigns ("MGH
Indemnitees"), against any liability, damage, loss or expense,
including reasonable attorney's fees, and expenses of litigation,
incurred by or imposed upon the MGH Indemnitees or any one of
them in connection with any claims, suits, actions, demands or
judgments, whether or not rightly or wrongly brought, arising out
of any theory of product liability, including but not limited to
actions in the form of tort, warranty or strict liability,
concerning any MGH Product made, used or sold pursuant to any
right or license granted hereunder.
(b) GENE-TRAK further agrees to provide at its own expense attorneys
which are reasonably acceptable to MGH for the defense of any
claim, suit or action to be indemnified by GENE-TRAK hereunder
and to keep MGH reasonably informed of the progress in such
defense and the disposition of such claim, including all
decisions, appeals and settlements of such claim, suit or action.
11.8 In consideration for the indemnification and other benefits accruing
to MGH Indemnitees hereunder, MGH Indemnitees agree to:
(a) Promptly notify GENE-TRAK in writing of any claim, suit or
action, demand or judgment for which indemnification is sought
hereunder; and
(b) Allow GENE-TRAK to conduct and control such defense and
disposition of such claim, suit or action, including all
decisions relating to litigation, appeal and settlement; and
29
(c) Provide GENE-TRAK with reasonable cooperation in the defense of
such claim, suit or action.
GENE-TRAK shall have no obligation to indemnify an MGH Indemnitee who
has not performed as provided in this Paragraph 11.8. However,
GENE-TRAK will provide reasonable cooperation to such nonperforming
MGH Indemnitee to permit same to mitigate such liability, damage, loss
or expense as may result from such claim, suit or action.
11.9 Notwithstanding the provisions of Paragraphs 11.7 and 11.8 herein,
GENE-TRAK shall have no obligation to indemnify an MGH Indemnitee
hereunder for any liability, damage, loss or expense to the extent
that such is attributable to:
(a) The negligent activities, reckless misconduct, or intentional
misconduct of the MGH Indemnitee; or
(b) The settlement of a claim, suit, action or demand by the MGH
Indemnitee which has not been approved by GENE-TRAK in writing.
11.10 During the period that GENE-TRAK, an Affiliate, a sub-licensee or
agent of GENE-TRAK is commercially distributing or selling any MGH
Product pursuant to any license and right granted hereunder and for
three (3) years thereafter,
(a) GENE-TRAK shall at its sole cost and expense:
(i) Maintain self-insurance through its Affiliate Amoco
Corporation which is reasonably acceptable to MGH and
the Risk Management Foundation of the Harvard Medical
Institution, Inc. ("RMF"); or
(ii) Maintain or procure from third party insurers, product
and contractual liability insurance with limits of at
least $ Two Million per occurrence and at least
$ Two Million annual aggregate. The minimum amounts of
insurance coverage required under this Paragraph 11.10
shall not be construed to create a limit of GENE-TRAK's
liability with respect to its obligation of
indemnification under Paragraph 11.7 herein.
(b) In the event GENE-TRAK cancels, fails to renew or otherwise
materially changes its insurance provisions relative to
subparagraph (a) above:
(i) GENE-TRAK will provide MGH with written notice of its
cancellation, non-renewal or material change in the
insurance at least fifteen (15) days prior to such
cancellation, non-renewal or material change. In the
event GENE-TRAK does not obtain replacement insurance
providing comparable coverage prior to such
cancellation, non-renewal or
30
material change to its insurance, MGH shall have the
right to terminate the license and rights granted to
GENE-TRAK hereunder as to MGH's interests in the claims
of Initial Patents which claim the inventions which are
the object of U.S. Serial No. 08/005,893 entitled
Diagnostic Assays And Kits For RNA Using RNA Binary
Probes And A Ribozyme Ligase by Xxxxxxx et al.;
provided, however, that MGH shall notify GENE-TRAK of
such termination in writing.
(ii) Notwithstanding the foregoing, such license and right
which has been terminated by MGH will be reinstated if,
within sixty (60) days of receipt of MGH's notice of
termination, GENE-TRAK provides MGH with written
evidence that GENE-TRAK has obtained insurance as
provided in Paragraph 11.10 hereof and effective no
later than the end of said sixty (60) day period. The
reinstatement of such license and rights shall be
effective as of the effective date of the replacement
insurance. It is understood that GENE-TRAK's right of
reinstatement hereunder shall lapse if GENE-TRAK has
failed to provide MGH with evidence of replacement
insurance on or before expiration of the sixty (60) day
period specified herein.
11.11 Upon request by MGH, GENE-TRAK shall provide MGH with written evidence
of the self-insurance or third party insurance specified in Paragraph
11.10 hereof.
11.12 As between MGH and GENE-TRAK, MGH shall be permitted to enforce
separately and independently of PHRI those obligations incurred by
GENE-TRAK to MGH under this Agreement.
11.13. (a) As between GENE-TRAK and MGH:
(i) As to any controversy or dispute between them arising
out of or in connection with Paragraphs 11.6 through
Paragraph 11.13 herein, their interpretation of such
Paragraphs or the performance of MGH, GENE-TRAK or an
MGH Indemnitee thereunder which MGH and GENE-TRAK are
unable to resolve within a reasonable time and after
written notice by either of GENE-TRAK or MGH to the
other of the existence of such controversy or dispute,
such dispute or controversy may be submitted to
arbitration by either of GENE-TRAK or MGH. If so
submitted to arbitration, the controversy or dispute
shall be finally settled by arbitration conducted in
accordance with the rules of conciliation and
arbitration of the International Chamber of Commerce in
effect on the date of such notice. Any such
arbitration shall take place in the city of Boston,
Massachusetts of the United States of America. Such
arbitration shall be conducted in the English language
and shall apply the laws of the state of New York of
the United States
31
of America.
(ii) The decisions by the arbitrator(s) with respect to such
controversy or dispute shall be binding and conclusive
upon GENE-TRAK and MGH's successors and assigns and
they shall comply with such decision in good faith, and
each hereby submits to the jurisdiction of Boston,
Massachusetts, but only for the entry of judgment with
respect to the decisions of the arbitration hereunder.
Notwithstanding the foregoing, judgment upon such award
may be entered in any court in Boston, Massachusetts,
or any other court having jurisdiction.
(b) Notwithstanding the foregoing, as to any controversy or dispute
between GENE-TRAK and MGH regarding an alleged obligation of
GENE-TRAK under Paragraphs 11.7 and 11.8 herein and for which
MGH or GENE-TRAK has requested arbitration hereunder, GENE-TRAK
shall assume such obligation until a decision has been made to
the contrary by the arbitrator(s). At such time as the
arbitrators have decided that GENE-TRAK does not bear such
alleged obligation, GENE-TRAK and MGH shall arrange for the
orderly transfer of such obligation to MGH or its designee. In
addition, MGH shall reimburse GENE-TRAK for GENE-TRAK's expenses
reasonably incurred with respect to such obligation.
ARTICLE XII. MARKING
12.1 GENE-TRAK agrees to xxxx all Royalty-Bearing Products sold in the
United States of America under the license and rights granted by this
Agreement with the word "Patent" or "Patents" or the abbreviation
"Xxx." and the number of any applicable issued Initial Patent,
Research Patent or Post-Research Patent.
ARTICLE XIII. TERM AND TERMINATION
13.1 Unless previously terminated in accordance with the provisions of
Paragraphs 13.2 or 13.4 herein, this Agreement shall continue in full
force from the Effective Date until the expiration of the last to
expire of Initial Patents, Research Patents or Post-Research Patents
under which GENE-TRAK retains the license and rights provided
hereunder.
13.2 GENE-TRAK shall have the right to terminate this Agreement at any time
during the term of this Agreement upon written notice to PHRI,
provided that:
(a) In the event GENE-TRAK elects to terminate the Agreement within
six (6) months of the Effective Date, GENE-TRAK shall have no
further obligation to
32
pay PHRI as provided in Paragraph 5.4 herein and all existing
licenses shall terminate immediately.
(b) In the event GENE-TRAK elects to terminate the Agreement after
six (6) months after the Effective Date, PHRI will wind down and
stop the Research Program effective as of one year from the date
of such termination. GENE-TRAK will continue to pay for such
research pursuant to Paragraph 5.4 on a pro rata basis for work
performed by PHRI.
13.3 GENE-TRAK shall be permitted to terminate the Research Program as
follows:
(a) Except as provided in subparagraph (b) herein,
(i) During the first three years of this Agreement,
GENE-TRAK shall be permitted to terminate the Research
Program only with concurrent termination of its license
and rights under Initial Patents and in accordance with
Paragraph 13.2.
(ii) GENE-TRAK may terminate the Research Program after the
first three years of this Agreement by declining to
extend the Research Program as provided in Paragraph
2.4(g).
(b) In the event Xx. Xxxxxx is unable or unwilling to serve as
Principal Investigator on behalf of PHRI as required by Paragraph
2.2 herein, GENE-TRAK may terminate the Research Program as
provided in Paragraph 2.3 without affecting as to any of its
license and rights granted herein.
13.4 Should either party fail to fully and promptly perform any material
obligation hereunder, and fail to cure such failure within sixty (60)
days after receipt of written notice from the other party specifying
the nature of such failure, the other party may seek whatever other
relief to which it may be entitled and:
(a) terminate the Research Program effective immediately upon notice
to the party failing to perform without terminating any other
license and rights granted hereunder; or
(b) terminate the Agreement, including the Research Program,
effective immediately upon notice to the party failing to
perform.
13.5 Termination of the Research Program separately or in conjunction with
termination of this Agreement shall not relieve either party of its
obligations under Paragraphs 2.6 - 2.8 through completion of the
Research Program by PHRI.
33
13.6 Termination of this Agreement shall not relieve any party of its
continuing obligations under Articles VI, VII, VIII and XI and shall
not relieve GENE-TRAK of royalty and milestone obligations accrued
under Article V.
ARTICLE XIV. ASSIGNMENT
14.1 This Agreement is not assignable by GENE-TRAK without the prior
written consent of PHRI, which shall not be unreasonably withheld,
except that GENE-TRAK may assign or extend all of its rights and
obligations hereunder to any Affiliate or to the bona fide successor
to GENE-TRAK's ownership or control of substantially the entire
business of GENE-TRAK relating to the subject matter of Initial
Patents, Research Patents and Post-Research Patents without the prior
consent of PHRI provided that such Affiliate or bona fide successor
agrees to be bound to the terms and obligations hereunder. It is
understood that it would not be unreasonable for PHRI to withhold
consent to an assignment which would be reasonably construed as:
(a) harming PHRI's reputation; or
(b) raising an irreconcilable conflict of interest; or
(c) being to a party which does not agree to generally exploit the
inventions which are the subject of Initial Patents, Research
Patents and Post-Research Patents.
14.2 PHRI's obligation to perform research under the Research Program is
not assignable by PHRI without the prior written consent of GENE-TRAK.
ARTICLE XV. FORCE MAJEURE
Neither party shall be liable for failure to perform as required by
any provision of this Agreement where such failure results from a
force majeure beyond the party's control. In the event of any delay
attributable to a force majeure, the time for performance affected
thereby shall be extended for a period equal to the time lost by
reason of the delay.
ARTICLE XVI. MISCELLANEOUS
16.1 (a) Until otherwise specified by a party in writing, the mailing
addresses of the parties to this Agreement shall be as follows:
34
PHRI: Public Health Research Institute
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
GENE-TRAK: GENE-TRAK, Inc.
00 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Manager
Clinical Diagnostics
(b) Until otherwise specified by MGH in writing, the mailing address
of MGH shall be as follows:
MGH: The Massachusetts General Hospital
Office of Technology Affairs
Xxxx. 000, Suite 0000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Director
16.2 Any notice expressly provided for under this Agreement shall be in
writing and shall be deemed sufficiently given at the earlier of (a)
when received manually or by mail by the entity to be notified at its
address provided in Paragraph 16.1 or at such address as may from time
to time be designated in writing by the entity; or (b) four (4) full
business days after mailing or one (1) full day after delivery to a
commercial courier.
16.3 This Agreement constitutes the full understanding of the parties
hereto and a complete statement of the terms of their agreement in
respect to the subject matter hereof. This Agreement shall not be
subject to any change or modification except by an instrument of equal
formality signed by the duly authorized representatives of the
respective parties.
16.4 The waiver of a breach of any part of this Agreement by either party
shall in no event constitute a waiver as to any future breach, whether
similar or dissimilar in nature.
16.5 This Agreement shall be construed and the legal relations between the
parties determined in accordance with the laws of the state of New
York, excluding any choice of law rules which may direct the
application of the laws of any other jurisdiction. The parties agree
to the exclusive jurisdiction and venue of the United States District
Courts for the Southern District of New York in the city of New York.
35
In the event GENE-TRAK becomes or its successor to this Agreement is
resident in the State of New York, the exclusive jurisdiction and
venue shall include the Courts of the State of New York in the City of
New York.
16.6 Each party shall perform under this Agreement in compliance with
applicable laws and governmental regulations. Nothing in this
Agreement shall be construed to require either party to commit any act
contrary to law or governmental regulation; wherever there is any
conflict between a provision of this Agreement and a law or
governmental regulation the latter shall prevail and the affected
provision shall be limited only to the extent necessary to avoid the
conflict.
16.7. If any provision of this Agreement is held by a court of competent
jurisdiction and last resort to be unenforceable, the provision shall
be adjusted, if possible, rather than voided to achieve the intent of
the parties. In any event, all other provisions of this Agreement
shall be deemed valid and enforceable to the fullest extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized representatives as of the dates written below.
THE PUBLIC HEALTH RESEARCH
INSTITUTE OF THE CITY OF
NEW YORK, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Title: President
----------------------------------
Date: 7/14/94
-----------------------------------
GENE-TRAK, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Title: President
----------------------------------
Date: 7/14/94
-----------------------------------
/s/ [ILLEGIBLE] 7/14/94
36
As between PHRI and MGH and pursuant to the December 10, 1993 Agreement between
them attached hereto as Appendix III, MGH approves this Agreement. Further, in
consideration for the various benefits it receives hereunder, MGH accepts its
various obligations herein including those under Paragraphs 8.1, 8.2, 8.11 and
11.7 - 11.13.
THE GENERAL HOSPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Director
Office of Technology Affairs
---------------------------------------
Date: 7/15/94
----------------------------------------
Acknowledged and Agreed to:
/s/ Xxxx Xxxxxxx Xxxxxx / July 14, 1994
------------------------------------------------
Xxxx Xxxxxxx Xxxxxx Date
37
APPENDIX I
Research Program
Amplification Methods Using QB Replicase
Research will be conducted at PHRI in the field of diagnostic assays that
utilize QB amplification. The anticipated topics to be investigated are listed
below. These may be modified during the course of the Research Program, by PHRI
in collaboration with GENE-TRAK, taking into account experimental results
obtained during the course of the research and strategic decisions regarding the
development and commercialization of the technology made by GENE-TRAK.
PHRI's primary goals for the first 6 months of the Research Program will be
directed at identifying and exploring the critical performance parameters of the
binary probe ligation system described in US serial No. 08/004,993 by Tyagi to
assist GENE-TRAK in making its initial evaluation of the commercial viability of
the system. These are indicated by the designation, (*), on the list of "Likely
Research Topics," below. Goals for the second 6 months of the Research Program
will be defined following the initial commercial viability evaluation, but will
include the following general types of activities: 1) more detailed evaluation
of options for controlling and implementing critical assay steps, 2) evaluation
of the generalizability of the assay format, including the development of a
number of different model systems, and 3) optimization of a specific model assay
which may be used as the first commercial product utilizing the binary probe
ligation technology, and likely will include a number of the specific topics
listed below.
LIKELY RESEARCH TOPICS
1. Characterization of binary probes
a. Effect of different nucleotides at the ligation junction on ligation
efficiency
b. Effect of probe length on target specificity
c. Effect of mismatches at the ligation junction on the ability to detect
allelic differences
2. Improvements in binary probe synthesis
a. Synthesis of probes by transcription from cloned vectors *
b. Use of different nucleotides and dinucleotides as initiators of probe
transcription
1
(Appendix I, cont'd)
3. Analysis of assay design
a. Determination of the efficiency of each stop in the assay *
b. Determination of which assay parameters most affect background
reactions, such as replication of unligated probes, retention of
unhybridized probes and target-independent ligation *
c. Determination of the factors that govern the efficiency of release of
probe-target hybrids by digestion with ribonuclease H (e.g., geometry
of capture probes)
d. Determination of the effect of buffer concentration, nucleotide
concentration, replicase concentration, and magnesium ion
concentration on the rate of replication and the generation of
background signals
4. Determination of the effect of different sample matrices on the sensitivity
of the assay
a. Effect of lymphocytes on the HIV-1 assay
b. Effect of sputum on MYCOBACTERIUM TUBERCULOSIS assays
5. Development of a binary probe assay that determines the drug sensitivity of
M. TUBERCULOSIS from a sputum sample within 3 days
a. Preparation of probes against M. TUBERCULOSIS messenger RNAs that are
synthesized in response to cell division
b. Determination of the turnover rate of the messenger RNA targets
6. Preparation of binary probes (and capture probes) specific for pathogenic
viruses
a. XXX-0, XXX-0, XXXX-0, and HTLV-3
b. Hepatitis C virus
GENE-TRAK will provide to PHRI such proprietary reagents and equipment as
GENE-TRAK deems necessary to carry out the Research Program and which are
generally unavailable from commercial sources. Such reagents will include QB
replicase enzyme and may include various GENE-TRAK proprietary buffers. Such
equipment will include a magnetic separation device.
2
(Appendix I, cont'd)
Budget And Personnel
1st 6 mo. 2nd 6 mo. 2nd year
--------- --------- --------
Xxxx Xxxxxx, Ph.D. (50%)
Xxxxxx Xxxxx, Ph.D. (50%)
Mounssef Tazi, M.S. (50%)
Xxxxx Xxxxx, M.D., Ph.D. (100%)
Summer Student
Benefits
Supplies
Equipment
Travel
Miscellaneous
Indirect Costs
Renovation of Lab
Debt Repayment
Carryover
Total $ $ $
The budget for the 3rd year of the Research Program will total $_________ as
provided for in paragrah 5.4 of the Research and License Agreement and will be
developed, along with the work plan as specified in paragraph 2.4(f) of the
Research and License Agremeent, prior to initiating the third year of the
Research Program.
3
APPENDIX II
REPLICATION OF PHRI RESULTS
AND
TRANSFER OF LICENSED TECHNOLOGY TO GENE-TRAK
The objectives of this series of experiments is to verify the replicatability of
the binary probe ligation methods described in US Serial No. 08/004,993 by
Tyagi, and to transfer the technology to GENE-TRAK personnel so that they may
expeditiously initiate an evaluation of the commercial viability of the
technology. This appendix also specifies the criteria to be used in judging the
successful outcome of the procedures referred to in the attached RESEARCH AND
LICENSE AGREEMENT at Paragraphs 2.4(a) and (b) and 5.2.
1. As soon as practical after the Effective Date, Xxxxxx Xxxxx and Xxxxxxxx
Xxxx of PHRI and designated GENE-TRAK scientists will carry out, in
parallel or in succession, a set of experiments at GENE-TRAK that are based
on experiments originally carried out at PHRI. These experiments,
utilizing binary probes specific for HIV-1 RNA, are designed to demonstrate
that an assay can be carried out that is able to detect as few as 100
molecules of HIV-1 RNA and that, in the absence of HIV-1 RNA, the assay
gives no signal (background).
Assays will be run against at least 24 different samples containing 100
molecules of HIV-1 RNA transcript, at least 24 different samples containing
1,000 molecules of HIV-1 RNA transcript, and at least 24 different samples
containing no (zero) molecules of HIV-1 RNA transcript.
2. Immediately after the Effective Date, Xx. Xxxxx will give GENE-TRAK
scientists written protocols that will enable them to prepare or purchase
their own binary probes, capture probes, target transcripts, enzymes,
reagents, and buffer solutions required to carry out the experiments
described in Paragraph 1. Xx. Xxxxx also will provide such oral
instructions and guidance as he deems necessary to enable GENE-TRAK
scientists to successfully perform these experiments.
3. GENE-TRAK will pay the travel, room and board expenses reasonably incurred
by Xx. Xxxxx and Xx. Xxxx in carrying out these experiments upon receipt of
a written expense report specifying such expenses.
1
(Appendix II, cont'd)
4. Successful performance of the experiments shall be based on the outcome of
the experiments carried out by GENE-TRAK scientists with GENE-TRAK reagents
and shall mean:
a) that at least 18 of 24 (75%) samples containing 100 target molecules
give a positive signal within a 30 minute amplification period, and
b) that at least 22 of 24 (92%) samples containing 1,000 target molecules
give a positive signal within 30 minute amplification period, and
c) that no more than 2 of the 24 (8%) samples containing no target
molecules give a positive signal within a 30 minute amplification
period.
All amplification reactions yielding a signal will be subjected to gel
analysis to determine whether the amplification product arises from
replication of the ligated probe. Experiments will be deemed 'failed
attempts' if more than 20% of no-target controls run without reporter probe
fragments (no-probe controls) produce signal. An experiment will be deemed
a 'successful attempt' (as distinct from a successful outcome) if less than
20% of such no-probe controls produce signal. In the case of less than 20%
contamination, the frequency of such contamination in no-probe controls may
be subtracted from the frequency of false-positives (no-target controls
with probe) to meet the criteria of successful performance established
above in 4.c. In the event of a 'failed attempt' due to contamination, the
experiment shall be repeated with new reagents and/or equipment and/or in a
different location (within GENE-TRAK) as deemed appropriate.
5. GENE-TRAK and PHRI will utilize their best efforts to successfully perform
the experiments as described in Paragraph 1 and 4 as soon as possible.
6. While at GENE-TRAK, Xx. Xxxxx and Xx. Xxxx also will perform binary probe
ligation assays demonstrating: 1) the capability of the HIV-1 to detect
HIV-1 RNA in the presence of uninfected human lymphocytes, and 2) the
capability of the MYCOBACTERIUM TUBERCULOSIS assay to detect MYCOBACTERIUM
TUBERCULOSIS rRNA. These assays shall not be considered replication
experiments for purposes of the RESEARCH AND LICENSE AGREEMENT.
2
APPENDIX III
AGREEMENT
This Agreement, effective the day last executed by either party, is between
THE GENERAL HOSPITAL CORPORATION doing business as MASSACHUSETTS GENERAL
HOSPITAL (hereinafter "MGH") AND THE PUBLIC HEALTH RESEARCH INSTITUTE OF THE
CITY OF NEW YORK, INC. (hereinafter "PHRI").
WHEREAS, PHRI and MGH have pursued research directed to improved nucleic
acid hybridization assays;
WHEREAS, most of that research has been performed solely at PHRI, but some
has been performed by Xxxx Xxxxxxx and Xxxx Xxxxxxx at MGH under a consortium
arrangement between PHRI and MGH that was supported by a National Institutes of
Health grant to Xxxx Xxxxxx at PHRI;
WHEREAS, such research has led to inventions claimed in three patent
applications, recently filed, one of which is jointly owned by MGH and PHRI;
WHEREAS, PHRI desires to be able to offer its rights in the inventions
claimed in the patent applications and any patents issuing thereon, to potential
licensees, including a potential exclusive licensee, and MGH desires to be able
to offer its rights in the jointly owned patent application and patents(s)
issuing thereon; and
WHEREAS, PHRI and MGH desire to share income from the jointly owned
invention, and patents thereon, if any, in an equitable manner.
NOW, THEREFORE, the parties agree as follows:
1. The jointly owned invention (hereinafter "the A39 invention") is the
subject of a U.S. patent application, USSN 08/005,893, filed January 15, 1993 by
PHRI's patent attorneys, Davis, Hoxie, Faithful and Xxxxxxx. The inventors of
the A39 invention are Xxxx Xxxxxxx, Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxx Xxxxxx and
Xxxx Xxxxxxx.
1
2. The A39 invention is or will be jointly assigned to PHRI and MGH as
follows: Tyagi, Landegren and Xxxxxx will assign their interests to PHRI;
Xxxxxxx will assign his interest to MGH; and Xxxxxxx will assign 50% of his
interest to PHRI and 50% of his interest to MGH.
3. MGH appoints PHRI its sole and exclusive agent to prosecute U.S.
application 08/005,893, claiming the A39 invention and any foreign counterparts,
including continuations, division or extensions, and to maintain any and all
patents issuing therefrom. MGH will be consulted on all prosecution matters.
Should PHRI elect at any time not to file, prosecute or maintain any U.S. or
foreign application or patent, MGH may do so at its own expense and for its own
account, subject to pre-existing licenses, and PHRI will assign its interest in
said application or patent to MGH.
4. MGH and PHRI represent that they have the right and ability to grant
an exclusive worldwide license to their respective rights in the A39 invention.
MGH has identified three pending U.S. patent applications, assigned in whole or
in part to MGH, believed to be the only U.S. applications assigned to MGH,
besides the A39 application, pertaining to the use of ribozymes (hereinafter
"the MGH Ribozyme Applications"). MGH requested an opinion from patent counsel
as to whether the A39 invention can be practiced without infringing the claims
of any of the MGH Ribozyme Applications, and patent counsel has advised MGH
that the A39 invention can be practiced without infringing the MGH Ribozyme
Applications. MGH therefore represents to the best of its knowledge and belief
that the MGH Ribozyme Applications will not impair significantly the commercial
development or use of the A39 invention by a licensee who does not have a
license to the MGH Ribozyme Applications. MGH agrees that, if a licensee shows
to MGH's reasonable satisfaction that development or use of the A39 invention is
significantly impaired by one or more of the MGH Ribozyme Applications, MGH
will, at PHRI's request, use reasonable efforts to obtain for the licensee a
non-exclusive license or sub-license to any such MGH Ribozyme Application,
subject to existing obligations to third party licensees or sponsors of research
at MGH.
5. MGH appoints PHRI its sole and exclusive licensing agent for the A39
invention, including applications and patents thereon.
2
6. The parties intend that the A39 invention be successfully and
diligently commercially developed and used to the good of humankind. To that
end the parties agree to share patenting expenses and licensing income, as
follows:
a. PHRI will file, prosecute and maintain U.S. and foreign
applications for the A39 invention and patents issuing thereon subject to
paragraph 3 above. Unreimbursed patent expenses of either party for the A39
invention shall be equally shared by the parties.
b. PHRI will seek to license the A39 invention and applications and
patents claiming the A39 invention. The invention may be licensed individually
or in combination with other PHRI owned inventions, exclusively or
non-exclusively. Any license agreement or amendment thereto that includes the
A39 invention or any application or patent thereon shall be approved by MGH,
such approval not to be unreasonably withheld.
c. License income shall be apportioned and shared between PHRI and
MGH as follows:
(1) First, to reimburse PHRI's and MGH's out-of-pocket
patenting and licensing expenses, which shall not include
internal expenses or institutional overhead; then as follows
in (2) and (3) as appropriate.
(2) If license income is attributable to a specific product
which, but for the license of the A39 invention, would
infringe a pending or issued claim covering the A39
invention by its manufacture, use, or sale, (an "A39
product") the portion of such license income attributable to
the A39 invention shall be shared 50% PHRI and 50% MGH.
Unless otherwise agreed, if the manufacture, use or sale of
an A39 product would, but for the licenses granted under a
particular license agreement, infringe more than one patent
or patent application licensed therein, each shall be
assumed to be of equal value.
3
(3) If license income is not attributable to a specific
product but rather results from a license agreement which
covers several patents or patent applications, one of which
is the patent or patent application claiming the A39
invention, then the portion of such non-product specific
license income attributable to the A39 invention shall be
shared 50% PHRI and 50% MGH. Unless otherwise agreed, if
more than one patent or patent application is included in a
particular license agreement, each shall be assumed to be of
equal value.
d. The parties will consult with one another regarding defense of
patent rights and prosecution of infringes, to the extent these matters are
not covered by a license to a third party. If the parties agree to proceed
with a defense or prosecution, expenses and recovery will be shared 50% by
PHRI and 50% MGH. If the parties do not agree, the party wishing to defend
or proceed (hereinafter "the Paying Party") will decide the course of action,
and will proceed at its own expense. The Paying Party shall keep the other
party informed of the progress of such proceedings and said other party shall
be entitled to counsel in such proceedings at its own expense. Any award
paid by third parties as the result of such proceedings (whether by way of
settlement or otherwise) shall first be applied to reimbursement of the
unreimbursed legal fees and expenses incurred by either party and then the
remainder shall be divided between the parties as follows: seventy-five
percent (75%) to the Paying Party and twenty-five percent (25%) to the other
party. Each party agrees to cooperate with the other in defense or
prosecution proceedings whether or not such party agrees to share the cost of
such proceedings.
7. PHRI will account to MGH under this Agreement on a quarterly
basis, with a report, any invoice for expenses, and payment of any royalty share
to be submitted, within 30 days after each quarter. MGH will reimburse PHRI for
expenses invoiced within 60 days of receipt of an invoice.
8. Each party will share its income under this Agreement with its
inventors and/or their laboratories according to its own policy. For purposes
of this paragraph 0 Xxxxxx, Xxxxxxx, Xxxxx, Xxxxxxxxx and all other PHRI
employees
4
will be considered PHRI inventors only, and Xxxxxxx and all other MGH employees
will be considered MGH inventors only.
9. This Agreement will continue until the last-to-expire of any patent
claiming the A39 invention or the last to terminate of any license thereon,
whichever is later.
10. If a licensee of a patent or patent application claiming the A39
invention wishes to enter into a research agreement with either party or a
consulting agreement with any individual inventor named in said patent or patent
application, that shall be separate and apart from this Agreement, and no
payment thereunder will be considered revenue from licensing or otherwise
subject to sharing under this Agreement.
11. Any notice required under this Agreement will be considered given one
day after such notice, properly addressed and shipped overnight service, is sent
by either party.
Copies of all correspondence related to this Agreement will be sent by either
party, properly addressed and mailed, to the parties listed below.
PHRI:
The Public Health Research Institute
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: President
MGH:
Massachusetts General Hospital
Office of Technology Affairs
13th Street, Bldg. 149
Xxxxxxxxxxx, XX 00000
Attn.: Director
12. This Agreement constitutes the entire agreement between the parties
regarding the subject hereof. It may be amended only by written agreement
signed by both parties.
13. This Agreement will be interpreted in and according to the laws of the
State of New York.
5
14. The provisions of this Agreement are separable, and in the event that
any of its provisions are determined to be invalid or unenforceable by a court
of competent jurisdiction, such validity or unenforceability shall not effect
the validity or enforceability of the remaining provisions.
IN WITNESS WHEREOF, the parties have hereto set their hands on the date(s)
given below, and each signer warrants that he is empowered and authorized to
execute this Agreement.
THE GENERAL HOSPITAL CORPORATION THE PUBLIC HEALTH RESEARCH
INSTITUTE OF THE CITY OF NEW
YORK, INC.
Date: 12/10/93 Date: 12/2/93
----------------------- ----------------------
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------- --------------------------------
Xxxxxx X. Xxxxxxx
Director
Title: Office of Technology Affairs Title: President
----------------------------- -----------------------------
6
EXHIBIT 10.10a
July 18, 1994
Public Health Research Institute The Massachusetts General Hospital
000 Xxxxx Xxxxxx Office of Technology Affairs
Xxx Xxxx, Xxx Xxxx 00000 Xxxx. 000, Xxxxx 0000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxx: President Xxxxxxxxxxx, XX 00000
Attention: Director
Research And License Agreement
Between GENE-TRAK, Inc., PHRI and MGH
-------------------------------------
Gentlemen:
Following execution of the subject agreement on July 14, 1994 by GENE-TRAK,
Inc., the Public Health Research Institute (PHRI) and The Massachusetts General
Hospital (MGH), it has been brought to our attention that Subparagraph 5.9(b)
incorrectly refers to running royalties and Paragraph 5.5 instead of minimum
annual royalties and Paragraph 5.6 as was intended by the parties and as is
necessary to make Subparagraph 5.9(b) truly meaningful. Accordingly, in
consideration for the benefit all parties will obtain in replacing the present
Subparagraph 5.9(b) with Subparagraph 5.9(b) as it was intended to be, we
propose the following:
Subparagraph 5.9(b) of the Research And License Agreement between the parties
executed July 14, 1994 shall be deleted in its entirety and replaced by the
following new Subparagraph 5.9(b):
(b) In the event (i) no claim has issued in an Initial Patent or (ii) all
such claims as have issued have been held invalid by a court of
competent jurisdiction and last resort; the minimum annual royalties
specified in Paragraph 5.6 herein shall be reduced by thirty-seven and
one half percent (37.5%) for years 7-10 as specified in Paragraph 5.6
until such a claim issues from Initial Patents in the United
States at which time minimum annual royalties shall be fully restored
to the rate specified in Paragraph 5.6.
Public Health Research Institute The Massachusetts General Hospital
July 18, 1994
Page 2
If PHRI and MGH are agreeable to the new Subparagraph 5.9(b) proposed herein,
please arrange for an appropriate person from each organization to signify its
agreement by executing this letter agreement and the duplicates enclosed
herewith.
Very truly yours,
GENE-TRAK, INC.
By: Xxxxxxx Xxxxxxx
------------------------------------
Title: Vice President & General Manager
---------------------------------
Date: 8/1/94
----------------------------------
I hereby confirm agreement to the foregoing:
PUBLIC HEALTH RESEARCH INSTITUTE
By: Xxxxx X Xxxxxxxxx
----------------------------------
Title: President
----------------------------------
Date: 8/3/94
----------------------------------
THE MASSACHUSETTS GENERAL HOSPITAL
By: Xxxxxx Xxxxxxx
----------------------------------
Title: Vice President, Patents, Licensing & Sponsored Research
---------------------------------------------------------
Date: 8/12/94
----------------------------------
