LICENSE AGREEMENT
Between THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK, a not-for-
profit corporation of the State of New York ("Columbia"), THE SALK INSTITUTE FOR
BIOLOGICAL STUDIES, a not-for-profit institute of the State of California
("Salk"), and GENE-TRAK SYSTEMS ("GTS"), an Illinois Partnership.
WITNESSETH
WHEREAS, Columbia is the assignee of U.S. Patent Application Serial No.
614,350, entitled "Autocatalytic Replication of Recombinant RNA, "by Kramer,
Miele, and Xxxxx, including all related domestic continuations,
continuations-in-part, divisions, reissues, and reexaminations, and all patents
and related foreign counterpart application and patents issued thereon;
WHEREAS, Salk and Columbia are coassignees of U.S. Patent Application
Serial No. 852,692, entitled "Replicative RNA Reporter System", by Kramer, Chu,
Xxxxxxx, and Xxxxx, including all related foreign counterpart applications, all
domestic and foreign continuations, continuations-in-part, divisions, reissues,
and reexaminations, and all patents issued thereon; and
WHEREAS, Columbia and/or Salk are the assignees of additional patent
applications covering related subject matter; and
WHEREAS, Columbia, and Salk are willing to grant a license to GTS and GTS
is willing to accept a license under the following terms and conditions:
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NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants set forth below, GTS, Columbia, and Salk mutually agree as
follows:
1. DEFINITIONS.
a. "Affiliate" shall mean any corporation or other entity which
directly or indirectly controls, is controlled by, or is under
common control with GTS. Control means ownership or other
beneficial interest in 40% or more of the voting stock or other
voting interest corporation or other business entity.
b. "Effective Date" shall mean the date on which the last
of all parties shall have attached its authorized
signature hereto.
c. "Application 1" shall mean the Patent Application
filed May 25, 1984, in the United States Patent
and Trademark Office (USPTO) by Xxxxxx, Miele and
Xxxxx, U.S. Serial No. 614,350, entitled
"Autocatalytic Replication of Recombinant RNA"
including continuations, continuations-in-part,
divisions, reissues, and reexaminations and
related foreign counterpart applications on any
continuation-in-part applications.
d. "Application 2" shall mean the Patent Application
filed April 16, 1986, in the USPTO by Kramer, Chu,
Xxxxxxx and Xxxxx, U.S. Serial No. 852,692,
entitled "Replicative RNA Reporter Systems,"
including continuations, continuations-in-part
including without limitation USSN 191,450, filed
May 9, 1988, divisions, reissues, reexaminations,
and all foreign counterpart patent applications.
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e. "Application 3" shall mean the Patent Application filed September
8, 1988 in the USPTO by Chu et al., U.S. Serial No. 241,969,
entitled "Replicative RNA-based Amplification/Detection Systems",
including continuations, continuations-in-part, divisions,
reissues, reexaminations, and all foreign counterpart patent
applications.
f. "Application 4" shall mean the Patent Application filed September
8, 1988 in the USPTO by Chu et al., U.S. Serial No. 241,942,
entitled "Replicative RNA-based Amplification/Detection Systems",
including continuations, continuations-in-part, divisions,
reissues, reexaminations, and all foreign counterpart patent
applications.
g. "Application 5" shall mean the Patent Application filed September
8, 1988 in the USPTO by Xxxxxxx et al., U.S. Serial No. 241,624,
entitled "Replicative RNA-based Amplification/Detection Systems",
including continuations, continuations-in-part, divisions,
reissues, reexaminations, and all foreign counterpart patent
applications.
h. "Patent 1" shall mean any patent issuing on Application 1 and
all continuations, continuations-in-part, divisions, reissues,
and reexaminations and foreign counterpart applications on
continuations-in-part.
i. "Patent 2" shall mean any patent issuing on Application 2 and on
all continuations, continuations-in-part, divisions, reissues,
reexaminations, and foreign counterpart applications of
Application 2.
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j. "Patent 3" shall mean any patent issuing on Application 3 and all
continuations, continuations-in-part, divisions, reissues, and
reexaminations and foreign counterpart applications on
continuations-in-part.
k. "Patent 4" shall mean any patent issuing on Application 4 and all
continuations, continuations-in-part, divisions, reissues, and
reexaminations and foreign counterpart applications on
continuations-in-part.
l. "Patent 5" shall mean any patent issuing on Application 5 and all
continuations, continuations-in-part, divisions, reissues, and
reexaminations and foreign counterpart applications on
continuations-in-part.
m. "Licensed Patents" shall mean Patent 1, Patent 2, Patent 3,
Patent 4, Patent 5, Application 1, Application 2, Application 3,
Application 4, Application 5, and any other patent applications
filed covering inventions which are conceived of by employees of
Salk and/or by Xx. X. Xxxxxx up to July 1, 1991, including
continuations, continuations-in-part, divisions, reissues,
reexaminations, and foreign counterpart applications thereof, and
any patents issuing thereon, which relate to RNA-based
amplification/detection systems which employ exponential
amplification of replicative RNA by QB Replicase or a related
enzyme, and which is owned or controlled by Columbia and/or Salk.
n. "Licensed Products" shall mean all assays, kits, compositions,
reagents used in assays, and Diagnostic
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Instruments for performing assays where GTS realizes a profit on
cumulative Net Sales of such Diagnostic Instruments, which relate
to RNA-based amplification/detection systems which employ
exponential amplification of replicative RNA by QB Replicase or a
related enzyme, whether or not used in or on Diagnostic
Instruments, and which are covered by a claim of a Licensed
Patent that has neither expired nor been declared invalid by a
court of last resort ("Issued Valid Claim"), or which use
Licensed Research Information. "Licensed Products" shall exclude
reusable physical structures such as, by way of example,
containment, filters, detection means, temperature control
elements, transport mechanisms, sonication means, mixing
elements, film software, computing hardware, manuals, recording
devices, paper and packing.
o. "Licensed Research Information" shall mean information developed,
owned or controlled by Columbia and/or Salk up to July 1, 1991,
which relates to RNA-based amplification/detection systems which
employ exponential amplification of replicative RNA by QB
Replicase or a related enzyme, but is not covered by a claim of a
Licensed Patent and is not published or part of the public
domain.
p. "Diagnostic Instrument" shall mean a manual, semi-automated or
automated instrument in which or with which Licensed Products may
be utilized and which is manufactured by or for GTS or a GTS
sublicensee.
q. "Net Sales" shall mean all fees or other payments charged by GTS
or an Affiliate for the use, sale, rental or lease of Licensed
Products, less credits for returns and customary trade discounts
actually taken, outbound
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freight, value added, sales or use taxes and custom duties. In
the case of sale, rental, lease or use of Licensed Products by an
Affiliate, Net Sales shall be based upon the greater of: i) the
total fee and payment per Licensed Product charged to an
Affiliate, or ii) the total fee or payment per Licensed Product
charged by the Affiliate to its customers.
r. "First Commercial Sale" shall mean the first date upon which GTS
or a GTS Affiliate or sublicensee shall sell a Licensed Product
to an independent third party in an arms-length transaction.
s. "Payment Year" shall mean a one-year period beginning with the
Effective Date hereof and a one-year period beginning upon each
annual anniversary thereafter; Payment Year One shall be the
first such year, Payment Year Two shall the second such year,
such series continuing thereafter and in like manner.
t. "Sublicensees" shall mean third parties to whom GTS has granted
sublicensees pursuant to this Agreement
2. LICENSE GRANT.
a. Columbia and Xxxx xxxxx to GTS, upon and subject to all terms and
conditions of this Agreement:
(i) a worldwide exclusive license under the Licensed Patents
to manufacture, have manufactured, use, sell, rent and
lease Licensed Products for the term provided under
Section 17 hereof;
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(ii) a worldwide exclusive license to use any Licensed Research
Information to manufacture, have manufactured, use, sell,
rent and lease Licensed Products for the term provided
under Section 17 hereof or until such time as such
information is published or otherwise publicly distributed
after which GTS shall have a fully paid up royalty free
license to such published information;
(iii) in the event GTS makes the election set forth in section
2(c), a worldwide non-exclusive license to use the
Licensed Patents to manufacture, have Manufactured, use,
sell, rent and lease Licensed Products for the term set
forth in Section 17 hereof, and a worldwide non-exclusive
license to use Licensed Research Information to
manufacture, have manufactured, use, sell, rent or lease
Licensed Products for the term set forth in Section 17
hereof or until such information is published or otherwise
publicly distributed after which GTS shall have a fully
paid up royalty free license to such published
information; and
(iv) For so long as GTS possesses an exclusive license under
this Agreement, a first right of refusal to a license
under Licensed Patents and/or Licensed Research
Information for application of technology covered thereby
which applications do not constitute Licensed Products
within the terms of this Agreement. Such license, which
may be exclusive or non-exclusive, shall not be offered to
any other party upon financial terms more
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favorable than those offered GTS without first providing
GTS a 60 day opportunity to accept such license with such
more favorable terms.
b. Columbia and Xxxx xxxxx to GTS the right to provide standard
Uniform Commercial Code rights to customers during the term of
any licenses granted hereunder, and the right to sublicense third
parties so long as GTS retains an exclusive license under this
Agreement, provided that the terms and conditions of this
Agreement are met where applicable and that GTS obtains the
approval of Columbia and Salk of any proposed sublicense prior to
execution, which approval shall not be unreasonably withheld by
Columbia and Salk, and which shall be granted or denied within
thirty days of receipt of notice by Columbia and Salk of a
proposed sublicense and which shall be deemed granted if Columbia
and Salk do not respond to such notice. In the event GTS makes
the election set forth in Section 2(c), any sublicense granted by
GTS hereunder, excluding those to customers, shall be transferred
to Columbia and Salk, at the sole discretion of Columbia and
Salk.
c. GTS, at its sole exclusive option and upon thirty days written
notice to Columbia and Salk, may elect to transform the exclusive
license set forth in Section 2(a)(i) and (ii) to the non-
exclusive license set forth in Section 2(a)(iii) at any time
after the payments specified in Section 3(a) are made to
Columbia and Salk. In the event GTS elects to maintain a
non-exclusive license, GTS shall have no further obligation to
make payments under Sections 3(b), 3(c) and Section 4(b).
However, all payments made prior to such election shall be
non-refundable.
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d. All rights granted by Columbia and Salk to GTS under this Section
2 and under this Agreement are subject to the requirements of
Public Law 96-517, as amended, and implementing regulations.
3. LICENSE PAYMENTS.
a. In consideration of the licenses and rights granted under this
Agreement, GTS shall pay or cause to be paid $500,000 to
Columbia/Salk in the following manner:
(i) $100,000 upon the Effective Date of this Agreement;
(ii) $150,000 one hundred eighty days after the Effective Date
of this Agreement;
(iii) $250,000 one year after the Effective Date of this
Agreement.
b. In order to maintain an exclusive license hereunder, GTS shall
further pay or cause to be paid $500,000 to Columbia/Salk in the
following manner:
(i) $250,000 eighteen months after the Effective Date of this
Agreement;
(ii) $250,000 twenty-four months after the Effective Date of
this Agreement.
c. In order to maintain an exclusive license hereunder, GTS shall
make or cause to be made, in addition to the payments under
Sections 3(a) and 3(b), the milestone payments described below,
but not earlier than fourteen months after the Effective Date of
this Agreement:
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(i) $300,000 to Columbia/Salk upon the earlier of: (A) 30 days
after the First Commercial Sale of a Diagnostic
Instrument; or (B) December 31, 1991;
(ii) $200,000 to Columbia within 30 days of receipt of written
notice to GTS of the issuance of a patent on Patent
Application U.S. Serial No. 614,350, filed May 25, 1984 in
the USPTO by Xxxxxx, Miele and Xxxxx, entitled
"Autocatalytic Replication of Recombinant RNA."
(iii) $500,000 to Columbia/Salk within 30 days of receipt of
written notice to GTS of the issuance of a patent
Application U.S. Serial No. 852,692, filed April 16, 1986
in the USPTO by Kramer, Chu, Xxxxxxx and Xxxxx, entitled
"Replicative RNA Reporter Systems".
(iv) $500,000 to Columbia/Salk within 30 days of receipt of
written notice to GTS of the issuance of the foreign
counterpart of the patent described in subsection (iii)
above from the European Patent Office.
d. All license payments pursuant to Section 3(c) above shall be
fully creditable against future royalties payable under Section
4, and shall be rolled over quarter to quarter until fully
consumed.
e. If GTS does not make any payments in accordance with Sections
3(b) and 3(c) above, its exclusive license shall be converted to
a non-exclusive license, upon 30 days' written notice by Columbia
and Salk, provided such
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payment deficiency is not cured during such period, and
thereafter Columbia and Salk shall be free to grant other parties
a non-exclusive license to the Licensed Patents and Licensed
Research Information.
f. License payments pursuant to this Section 3 shall be paid to
Columbia's Office of Science and Technology Development, which
shall receive such payments on behalf of both Columbia and Salk.
4. ROYALTIES.
a. In further consideration of the licenses and rights hereunder,
GTS shall pay to Columbia/Salk a royalty as follows:
(i) Until July 1, 1991, a royalty of 4 1/2% shall be paid on
all Net Sales by GTS or an Affiliate of Licensed Product
regardless of whether such Licensed Product is covered by
an Issued Valid Claim of Patent 1 and/or Patent 2.
(ii) After July 1, 1991, a royalty of 4 1/2% shall be paid on
all Net Sales by GTS or an Affiliate of Licensed Product
provided such is covered by an Issued Valid Claim of a
patent within Licensed Patents in the country of sale or
manufacture.
(iii) After July 1, 1991, if no Issued Valid Claim of a patent
within Licensed Patents cover a Licensed Product in the
country of sale or manufacture, no royalty shall be paid
on Net Sales of such Licensed Product until such a claim
does issue regardless whether such Licensed Product
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incorporates Licensed Research Information, except as
provided in subsections (iv) and (v) below.
(iv) Notwithstanding subsections (i) through (iii) above, if
GTS manufactures, has manufactured, uses, sells, rents or
leases a Licensed Product which is not covered by an
Issued Valid Claim of Patent l or Patent 2, but which uses
new technology comprising a new Licensed Patent defined
by the filing of Patent 3, Patent 4 or Patent 5 or
another patent application, covering technology not
previously disclosed in Patent Applications 1 or 2, then a
royalty of 4 1/2% on all Net Sales by GTS or an Affiliate
of such Licensed Product shall be paid for five years
following the initial filing of Patent 3, Patent 4, Patent
5 or such another patent application covering such new
technology.
(v) For five years following the First Commercial Sale on a
country-by-country basis, a royalty of 1% shall be paid on
all Net Sales of Licensed Product which, although not
covered by an Issued Valid Claim of a Licensed Patent,
uses Licensed Research Information.
(vi) Only a single royalty obligation under paragraphs 4a(i)
through 4a(v) shall be payable on Net Sales of any
individual Licensed Product.
(vii) If GTS exercises its option pursuant to Section 2(c) of
this Agreement to convert its exclusive license to a non-
exclusive license, GTS shall continue to pay the royalty
rates specified in
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this Section 4(a), but not the minimum royalties
specified in Section 4(b) below, until such time as
Columbia and/or Xxxx xxxxx a non-exclusive license for
commercial purposes to a third party, at which time the
royalty rates paid by GTS for a non-exclusive license
shall be the lower of:
(a) one-half the rates specified in this section 4(a), or
(b) the royalty rates specified in such commercial
third-party license.
b. In order to maintain an exclusive license hereunder and in lieu
of any best efforts obligation, GTS shall pay Columbia/Salk
minimum annual royalties within 60 days of the end of a Payment
Year as specified in Schedule A below. If royalties paid by GTS
under this Agreement plus supplemental payments made by GTS, in
any Payment Year do not equal or exceed the Minimum Annual
Royalty for such Payment Year as set forth in Schedule A, then
upon 30 days written notice by Columbia and Salk, such
circumstance shall be deemed an election by GTS under Section
2(c) to maintain a non-exclusive license unless such deficiency
shall be cured during such period.
SCHEDULE A
The schedule of minimum annual royalties payable at the end of a Payment
Year is as follows:
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Payment Year Royalty Minimum Annual
-------------------- --------------
4 100,000
5 200,000
6 300,000
7 400,000
8 500,000
9 600,000
10 and each year 700,000
thereafter in
which royalties
are paid under
Section 4(a)
c. In the event GTS exercises its option pursuant to Section 2c of
this Agreement to convert its exclusive license to a
non-exclusive license, the royalties payable under this Agreement
shall be solely as set forth in Section 4a and GTS shall have no
obligation to pay any minimum annual royalties.
d. In consideration of the right to sublicense third parties granted
under Section 2b, GTS shall pay to Columbia/Salk a total of 40%
of all royalties, license fees, and other payments or
consideration (including stock), received by GTS pursuant to its
sublicense, which payments shall constitute royalties paid under
this Agreement for purposes of GTS satisfying the requirements to
pay minimum annual royalties pursuant to Section 4b above.
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e. Royalties payable to Columbia/Salk under sections 4a-d shall be
reduced in any country, on a country-by-country-basis, where a
compulsory license is granted. The new royalty rate shall be the
royalty rate mandated by the compulsory license or the royalty
rate for a non exclusive license under Section 4a(vii), whichever
is lower.
5. REPORTS AND PAYMENTS.
a. Beginning with the earlier of (i) the First Commercial Sale of a
Licensed Product or (ii) the First Commercial Sale of a
Diagnostic Instrument, or (iii) Payment Year Four, GTS shall
deliver or cause to be delivered to Columbia and Salk, within 60
days after the end of each calendar quarter, a written report
with respect to the preceding calendar quarter (the "Payment
Report") stating:
(i) Net Sales of Licensed Products made by GTS and any
Affiliate during such quarter;
(ii) In the case of transfers or sales of Licensed Products by
GTS to an Affiliate for sale by the Affiliate, Net Sales
made by GTS to the Affiliate and by the Affiliate to its
customers during such quarters;
(iii) Amounts accruing to GTS from its Sublicensees under
section 4d during such quarter;
(iv) Net Sales made by Sublicensees during such quarter; and
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(v) A calculation under Section 4 of the amounts due to
Columbia, making reference to each subsection.
All such royalty reports shall be treated as Confidential
Information subject to Section 14c and except to the extent
disclosure is required i) for audit purposes, ii) by contract,
or iii) by law.
b. Simultaneously with the submission of each Payment Report to
Columbia, GTS shall make payments to Columbia's Office of Science
and Technology Development of the amounts due for the calendar
quarter covered by the Payment Report, and Columbia shall receive
such payment on behalf of both Columbia and Salk.
c. GTS shall maintain usual books of account and records showing its
actions under this Agreement. Upon reasonable notice, but not
more frequently than once in each calendar year, such books and
records shall be open to inspection, and copying solely with
respect to the information required under Section 5a, at its
principal office, during usual business hours, by an independent
certified public accountant to whom GTS has no reasonable
objection, for two years after the calendar quarter to which they
pertain, for purposes of verifying the accuracy of the amount
paid by GTS under this Agreement. Said accountant shall not
disclose to Columbia, Salk or any other party any information
except that which should properly be contained in the royalty
report required under this Agreement.
d. Royalties on Net Sales of Licensed Products shall accrue and be
computed in the currency of the country in which such sales have
been made by GTS or its Affiliates and shall be paid to a
location or person designated by Salk
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and Columbia in the United States in United States Dollars, at
the rate of exchange quoted by the Wall Street Journal for the
last business day of the calendar quarter in which such royalties
were earned. If by law, regulations, or fiscal policy of a
particular country, conversion into or transfer to the United
States in United States Dollars is restricted or forbidden,
notice therefore in writing will be given to Salk and Columbia,
and no such royalties shall be paid until such conversion or
transfer can be made legally, at which time royalties shall be
paid in United States dollars at the rate of exchange as quoted
by the Wall Street Journal for the last business day of the
quarter during which the restriction on conversion was lifted.
However, Columbia and Salk shall have the right to have royalties
paid by GTS or its Affiliate in the blocked currency by
depositing the same in Columbia and Salk's name in a foreign bank
in any such country as designated by Columbia and Salk, at which
time the royalties shall be deemed paid. However, in the event
GTS chooses to use the earned royalty in the country from which
conversion or transfer cannot be made, GTS shall cause such
royalties to be paid to Columbia and Salk in U.S. dollars based
upon the last rate of exchange quoted (in the Wall Street Journal
or if not there in any other similar publication) or, if none is
available, at such other rate mutually agreed upon by the
parties.
6. USE FOR RESEARCH PURPOSES OF LICENSES GRANTED.
Columbia and Salk reserve the right to use the Licensed Patents and
Licensed Research Information for research purposes and to permit
other entities or individuals to use same for research purposes
provided such is without the
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payment of royalties, license fees, stock or other compensation.
Columbia and Salk shall obtain from all such entities or individuals
an agreement in writing not to use the Licensed Patents or Licensed
Research Information for commercial purposes and shall inform GTS of
the identity of such entities or individuals.
7. PROSECUTION.
a. Columbia and Salk shall with due diligence file, prosecute and
maintain patent applications and the Licensed Patents, when in
any party's judgment such action may be reasonable, proper and
justified. Columbia and Salk shall copy GTS on all patent office
related correspondence and provide GTS a reasonable opportunity
to comment thereon. Columbia and Salk shall reasonably confer
with GTS, at such times as is appropriate, upon the selection of
foreign countries for purposes of filing patent applications.
b. GTS will pay Columbia and Salk 50% of the expenses incurred after
the Effective Date in filing and prosecuting the Licensed Patents
including reasonable outside attorney's fees, taxes, annuities,
issue fees, working fees, maintenance fees, and renewal charges
(Patent Expenses), until such time as Columbia and/or Xxxx xxxxx
a non-exclusive license to a third party, whereupon GTS shall pay
Columbia and Salk its pro rata share of the Patent Expenses
incurred thereafter which pro-rata share shall be computed by
dividing the Patent Expenses by the number of third-party
licenses granted.
8. INFRINGEMENT.
a. Columbia and/or Salk shall have the first right to protect their
Licensed Patents from infringement and prosecute infringers at
their own expense when in their
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sole judgment such action may be reasonably necessary, proper
and justified.
b. If GTS shall have supplied Columbia and Salk with written
evidence demonstrating to Columbia's and Salk's reasonable
satisfaction prima facie infringement of a claim of a Licensed
Patent or misappropriation of Licensed Research Information by a
third party, GTS may by notice request Columbia and Salk to take
steps to protect the Licensed Patent or Licensed Research
Information. Unless Columbia and/or Salk shall within three
months of the receipt of such notice either (i) cause such
infringement to terminate or (ii) initiate and diligently pursue
legal proceedings against the infringer, GTS may upon notice to
Columbia and Salk initiate legal proceedings against the
infringer at GTS's expense and in Columbia and Salk's name if
appropriate. In such event GTS may deduct from payments due
hereunder to Columbia and Salk reasonable costs and legal fees
incurred to conduct such proceedings, but in no event shall any
such payments be reduced by more than 50 percent of the amount
otherwise due to Columbia and Salk hereunder. Any recovery by GTS
in such proceedings shall (i) first be used to reimburse GTS for
reasonable costs and legal fees incurred to conduct such
proceedings, (ii) next be used to pay any amounts withheld from
Columbia and Salk by GTS under this Section 8 during the pendency
of the proceedings, (iii) thereafter 40% of the remainder to
Columbia and Salk, until $500,000 shall have been paid to
Columbia and Salk, and (iv) finally, any remainder shall be kept
by GTS.
c. In the event one party shall initiate or carry on legal
proceedings to enforce any Licensed Patent against an alleged
infringer, the other party shall use all
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reasonable efforts to fully cooperate with and shall
supply all assistance reasonably requested by the party
initiating or carrying on such proceedings. The party which
institutes any proceeding to protect or enforce a Licensed Patent
shall have sole control of that proceeding and shall bear the
reasonable expenses incurred by said other party in providing
such assistance and cooperation as is requested pursuant to this
paragraph.
d. In the event that the Licensed Patents cannot be practiced
without infringing an issued patent in the country where
practiced, GTS shall have the right, at GTS' sole election,
either:
(i) to stop use of Licensed Patents under this Agreement in
such country and to stop all royalty payment for such
country upon giving Columbia and Salk one month's notice;
or
(ii) to practice Licensed Patents directly or through its
sublicensees and to negotiate a license, the terms of
which shall be subject to Columbia/Salk's reasonable
approval (not to be unreasonably withheld or delayed),
and/or stand suit for patent infringement, in which case
GTS shall be permitted to deduct from 50% of the royalties
payable hereunder in such country, the costs of such
license or suit, and/or the royalty to which GTS and/or
any sublicense shall become obligated to pay to said third
party through negotiated agreement, settlement or final
order of a court of competent jurisdiction for the right
to continue to use Licensed Patents in that country free
from charges of infringement thereafter.
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e. If the cumulative royalties that GTS must pay to Columbia, Salk
and third parties to manufacture, use and sell Licensed Products
make such manufacturing use or sale commercially unattractive to
GTS, then, upon request by GTS, Columbia, Salk and GTS shall meet
and in good faith discuss whether royalties and payments due
hereunder can be reduced.
9. WARRANTY.
9.1 Nothing in this Agreement shall be construed as a warranty or
representation by any party as to the validity of any Licensed
Patent. Nothing in this Agreement shall be construed as a
warranty or representation by any party that anything made, used,
sold or otherwise disposed of under any license granted under
this Agreement is or will be free from infringement of domestic
or foreign patents of other parties.
9.2 Columbia and Salk hereby represent and warrant that:
(i) Columbia and/or Salk are the Assignees of Licensed Patents
and to the best of their knowledge that it (they) has
(have) good and complete valid title in and to Patent 1,
Patent 2, Patent 3, Patent 4, and Patent 5 and that it
(they) has (have) to the best of their knowledge the
complete and sole right to license same and Licensed
Research Information to GTS pursuant to the terms of this
Agreement;
(ii) Columbia and Salk are unaware of any patents owned by
others and any trade secret or proprietary rights of
others which would be infringed or violated by the use of
Licensed
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Patents or Licensed Research Information by GTS, its
Affiliates and/or sublicensees anywhere in the world;
(iii) to the best of their knowledge, there are no adverse
actions, suits or claims pending against Columbia or Salk
or any of their Affiliates in any court or by or before
any governmental body or agency with respect to Licensed
Patents or Licensed Research Information and no such
actions, suits or claims have been threatened;
(iv) for so long as the licenses granted to GTS pursuant to
this Agreement remain exclusive in favor of GTS, Columbia
and Salk, and any of their agents or anyone acting on
their behalf will not grant any licenses to Licensed
Patents and/or Licensed Research Information to third
parties other than as specified in Section 2(a)(iv) and
Section 6. If prior to July 1, 1991 Columbia and/or Salk
invents an alternative nucleic acid amplification
technology other than the Licensed Patents or Licensed
Research Information, Columbia and/or Salk, as the case
may be, shall not license such alternative technology to
any third party without first discussing the technology
with GTS, unless Columbia and/or Salk is contractually
prevented from making such disclosure.
10. PROHIBITION AGAINST USE OF NAME.
a) Neither party shall use the name, insignia, or symbols of any
other party, its faculties or departments, or any variation or
combination thereof, or the name of any trustee, faculty member,
other employee or student of any other party for any purpose
whatsoever without the prior written consent of such other party
whose name is sought to he used.
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b) No party shall unreasonably withhold or delay its consent
requested pursuant to 10a to an announcement of the existence of
this Agreement or to such other announcement which in the opinion
of legal counsel to the party making such announcement is
required by law or practice to be made. The party making any
announcement shall give the party whose name is to be used, an
opportunity to review the form of the announcement before it is
made and comments from such reviewing party shall be reasonably
incorporated. It is presently anticipated that GTS will issue,
subject to review pursuant to this Section, a press release
regarding generally the licensure of Q-Beta replicase technology
to GTS. Routine oral references to this Agreement and the
arrangements hereunder without undue frequency and without
emphasis shall be allowed in the usual course of business
provided that notice of such use is given to the other party.
11. COMPLIANCE WITH GOVERNMENTAL OBLIGATIONS.
a. Notwithstanding any provisions in this agreement, Columbia and
Salk disclaim any obligations or liabilities arising under the
license provisions of this Agreement if GTS is charged in a
governmental action for not complying with or fails to comply
with governmental regulations in the course of taking effective
steps to bring any Licensed Product to a point of practical
application.
b. GTS shall comply upon reasonable notice from Columbia and/or Salk
with all governmental requests authorized by statute, regulation,
or judicial decree and directed to either Columbia, Salk, or GTS
and provide the necessary information and assistance to comply
with such governmental requests regarding this Agreement.
Page 23
c. GTS shall insure that research, development, and marketing under
this Agreement will comply with all government regulations in
force and effect including, but not limited to, Federal, State,
and Municipal legislation.
12. INDEMNITY AND INSURANCE.
a. GTS will indemnify and hold Columbia and Salk harmless against
any and all actions, suits, claims, demands, prosecutions,
liabilities, costs and expenses (including reasonable attorney's
fees) based on or arising out of this Agreement, including,
without limitation, the manufacture, packaging, use, sale, rental
or lease of Licensed Products or Licensed Research Information by
GTS, its Affiliates, its Sublicensees or its (or their) customers
and any representation made or warranty given by GTS, its
Affiliates or Sublicensees with respect to Licensed Products.
This indemnity does not apply to liabilities, costs and expenses
arising out of any action, suits, claims, demands or prosecutions
between the parties to this Agreement.
b. GTS shall maintain, during the term of this Agreement,
comprehensive general liability insurance, and beginning with the
First Commercial Sale further maintain products liability
insurance in the same or separate policy, with reputable and
financially secure insurance carriers, to cover the activities of
GTS and its Affiliates, for minimum limits of $2,000,000
combined single limit for bodily injury and property damage per
occurrence and in the aggregate. Any sublicensee(s) shall be
required to carry insurance of like character and amount. Such
insurance shall include Columbia, Salk, and the trustees,
directors, officers, employees, and agents of
Page 24
each, as additional insureds. GTS shall furnish a certificate of
insurance evidencing such coverage, within 30 days written notice
to Columbia and Salk of cancellation or material change.
The GTS insurance shall be primary coverage; any insurance
Columbia and Salk may purchase shall be excess and
non-contributory. Such insurance shall be written to cover claims
incurred, discovered, manifested, or made during or after the
expiration of this Agreement. GTS shall at all times comply with
all statutory workers' compensation and employers' liability
requirements covering its employees with respect to activities
performed under this Agreement.
13. MARKETING.
Prior to the issuance of patents GTS will, where feasible, xxxx
Licensed Products made, sold, or otherwise disposed of by it under the
license granted under Licensed Patents in the Agreement with the words
"Patent Pending" and following the issuance of one or more Licensed
Patents, with the numbers of such patent.
14. CONFIDENTIALITY.
a. GTS will treat as confidential all information, and materials
furnished hereunder which Columbia or Salk has designated as
"Confidential". For the term of this Agreement and for three
years following termination, GTS will not disclose or make
available such confidential information to any third party
without the prior written permission of the other parties.
b. Columbia and Salk may, but are not obligated to, receive
confidential information from GTS. Columbia and Salk will not
disclose or make available confidential information received from
GTS to third parties without
Page 25
GTS's written permission. Columbia's and Salk's obligations under
this paragraph apply only to information which GTS has designated
in writing as "Confidential" and which GTS submits so marked to
Columbia's Office of Science and Technology Development and to
Salk.
c. The obligations of confidentiality under this Section 14 do not
apply to any information which:
(i) was known to the party receiving the information prior to
receipt thereof from the other party;
(ii) was or becomes a matter of public information or publicity
available through no act or failure to act on the part of
the party receiving the information;
(iii) is acquired by the party receiving the information from a
third party entitled to disclose the information to it;
(iv) the receiving party develops independently;
(v) GTS must disclose in order to commercially exploit and/or
sublicense the licenses granted herein to GTS; or
(vi) GTS is reasonably required to disclose pursuant to
governmental regulation, statute or agency request.
15. FREEDOM OF PUBLICATION.
GTS acknowledges that Columbia and Salk are each dedicated to a free
scholarly exchange and to public dissemination of the
Page 26
results of their scholarly activity. Regarding Licensed Patents and
Licensed Research Information, Salk agrees, that up to July 1, 1991,
it shall provide to GTS a copy of any invention memorandum, manuscript
accepted for publication or anything regarding oral disclosures,
received by the Patent Administration at the Salk Institute of
Biological Studies, whenever possible at least 60 days in advance of
such public dissemination or publication in order to allow GTS the
opportunity to review same in order to ensure the filing of
appropriate patent application(s) prior to publication or
dissemination. Except as set forth in Section 14 and this section
nothing in this agreement shall restrict the right of Columbia or
Salk, or the faculty, employees and students of each, to publish,
disseminate or otherwise disclose information relating to their
research activities, however, when they do so, such no longer
qualifies as Licensed Research Information.
16. BREACH AND CURE.
a. In addition to applicable legal standards, GTS shall be
considered to be in material breach of this Agreement for (i)
failure to comply with governmental requests pursuant to Section
11b.
b. Any party shall have the right to cure its material breach. The
cure shall be effected within a reasonable period of time but in
no event later than thirty days after notice of any breach given
by the party alleging the breach.
17. TERM OF AGREEMENT.
a. This Agreement shall be effective as of the Effective Date and
shall continue in full force and effect until its expiration or
termination in accordance with this Section 17.
Page 27
b. Unless terminated earlier under any provision of this Agreement,
the term of the exclusive license granted under the Licensed
Patents and Licensed Research Information shall extend until the
expiration of the last to expire of the Licensed Patents after
which GTS shall have a fully paid up, royalty free license
thereto.
c. The license granted under this Agreement may be terminated (i) by
either GTS or Columbia and Salk upon 30 days written notice to
the other party of its material breach of the Agreement and such
party fails to cure such material breach; or (ii) by Columbia and
Salk should GTS commit any act of bankruptcy or insolvency act.;
or (iii) after one year after the Effective Date hereof, by GTS
upon ninety days written notice to Columbia and Salk.
d. Upon any termination of this Agreement pursuant to Section 17c
(i), all sublicenses granted by GTS shall be assigned to Columbia
and Salk.
18. NOTICES.
Any notice required under this Agreement shall be sufficient if sent
by certified mail (return receipt requested), postage prepaid.
If to Columbia, to: Office of Science and
Technology Development
Columbia University
000 Xxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
copy to: General Counsel
Columbia University
000 Xxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Page 28
If to Salk, to: The Salk Institute For
Biological Studies
00000 Xxxxx Xxxxxx Xxxxx Xx.
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxx
Patent Administrator
copy to: Xx. Xxxxxx Xxxxx
Fitch, Even, Tabin & Xxxxxxxx
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to GTS, to: GENE-TRAK Systems
00 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
President
Copies to: Amoco Technology Co.
Xxxxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
and: Integrated Genetics
Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Chief Patent Counsel
or to such other address as a party may specify by notice hereunder
19. ASSIGNMENT.
This Agreement may not be assigned without the written consent of the
other parties, provided, however, that GTS may assign, upon prior
written notice to Columbia and Salk, its rights and obligations to an
Affiliate or to an assignee or purchaser acquiring all or
substantially all of GTS's business assets to which this Agreement
pertains.
Page 29
20. AMENDMENTS.
This Agreement may be amended only by an instrument in writing duly
executed on behalf of each of the parties.
21. GOVERNING LAW.
This Agreement shall be governed by New York law applicable to
agreements made to be performed in New York.
22. WAIVER.
The waiver by any of the parties of this Agreement or any provision
hereof by another party shall not be construed to be a waiver of any
succeeding breach of any such provision or a waiver of the provision
itself.
23. 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 such 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
24. REPRESENTATIONS.
a. All parties are acting as independent contractors and nothing
contained herein shall be construed as making Columbia, Salk or
GTS the agent, representative or employee of the other.
b. Each party hereto acknowledges and agrees:
Page 30
(i) that this Agreement is not being entered into on the basis
of, or in reliance on, any promise or representation,
expressed or implied, covering the subject matter hereof,
other than those which are set forth expressly in this
Agreement; and
(ii) that each party has had the opportunity to be represented
by counsel of its own choice in this matter, including
negotiations which preceded the execution of this
Agreement.
IN WITNESS THEREOF, Columbia, Salk and GTS have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
written above.
THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Title: Director, Office of Science
----------------------------
and Technology Development
----------------------------
Date: October 7, 1988
----------------------------
THE SALK INSTITUTE FOR BIOLOGICAL
STUDIES
By: /s/ Dilbert X. Xxxxx
--------------------------------
Title: Vice President Operations
----------------------------
Date: October 7, 1988
----------------------------
GENE-TRAK SYSTEMS
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Title: President
----------------------------
Date: October 8, 1988
----------------------------
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